Hello;
Why do certain retirees struggle to spend money? Their fear of depleting their savings.1 (There’s 1 big reason millions of US retirees struggle – and it’s not because they don’t have enough money, Maurie Backman Aug. ’24)
Achieving financial security in retirement isn’t just a matter of saving money. It comes down to spending those funds wisely to ensure it lasts.
A tough change in mindset
- Lifetime of habits of discipline and prudence aren’t easily dismissed just because you reach what you’re told is a different “stage” of life
- Habits are part of our identity and each of us defends our identity fiercely
- Once strong savers reach retirement age, many are struggling to actually spend their nest eggs
- A ’24 US study found that 63% of Americans worry more about running out of money than death
How to get more comfortable with spending money
- If you’re worried about running out of money, your solution may be simply to spend as little as possible. But this may lead to a less fulfilling lifestyle
- One way to feel at ease with retirement spending is to sit down and devise a strategy and budget
- Consider a “safe withdrawal” rate based on daily needs and retirement goals
- A financial advisor can help you manage your savings to lower your risk of running out, only you can change the way you feel about money
- If you are hesitant to dip into your savings, think about how much satisfaction you’ll get from spending more of your money. If dining out a few extra times a week lends to a better quality of life, then it’s worth doing
- One takeaway – spend your money for a year and see what happens. You may find that your nest egg is in better shape than expected because it’s still invested for growth
Sincerely,
Mike Busby (01-Oct-24)
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