What is your experience with the law of diminishing returns ?

No experience my returns are all great.

You have to reconcile whether to spend big bucks on new speakers et al if you're 65 years old...  

In order for a question of this nature to have any meaning, reference points will have to be established; at least one well known reference point is the "Stereophile rating". I have subscribed to "Stereophile" for years, and I consider their rating system to be valid; for example a component that's rated "Class A" will sound pretty good, that I guarantee.

I try to buy the cheapest component that's rated Class A; I believe components that cost more are entering the land of diminishing returns.

In order to confirm this, I would need to buy more expensive components; until that happens, I can only guess whether or not this is valid.

Inna, if I was rolling in dough, I wouldn't buy a 10K power cord, and since I'm scientifically inclined, I would not even buy a 1K power cord; where's the science?

I spent $13,850 on new speakers, and I was born when Truman was President. No problem. In fact the best new purchase I ever made to improve the quality of my listening experience with added small tweaks. (and some of those expensive yes.)   
I also agree..Once you have a high end system, the little tweaks can add plenty to the final sound. When I had $1K to $2K a pop bits, hard to tell what a cable did, what a power cord did. Even at $5,000 a pop not so easy. Now.. wow, I can change the sound moving a power cord from a Furutech GTX-D Gold duplex, to the neighboring Furutech GTX-D NCF Rhodium duplex. easy to hear the difference.