Part 3/8:
A critical observation is that the utility of money—the incremental unit of happiness that each dollar can provide—declines with age. As people grow older, their overall health tends to decline, and their desires evolve. Studies show that older adults, including those with substantial net worth, tend to spend significantly less than they did during their youthful years. The understandable reason for this is the reduction in desires and needs: older individuals often find contentment in simple activities such as watching television or taking leisurely naps, which do not require significant spending.