When you die, you cannot take your possessions or money with you.
But on the flip side of the coin…..
When you retire you no longer have an income. It’s stressful. It can be scary. It gets hard to spend your money once you are retired.
Most people are worried- you are not the only one.
What if I run out of money? What if I become a burden to my kids? What if I end up working at Walmart at age 95?
I bet there is also something deep inside of you saying, “I’ve worked hard and saved my money all these years. When do I get to enjoy it?! Sure, it would be nice to leave a little to the kids. But this is MY money.”
Hold on to your hats. The government statistics on retiree finances are shocking.
- On average, retirees are dying with 60% more money than they had on the day they retired. (source)
- 80% of retirees are spending less money than what comes in each month. (source)
So, what does all this mean?
If you don’t start thinking about what your money is FOR, you could very well end up like 80% of the country who underlives and oversaves.
Once you retire (if you have $250,000 or more in savings), you need to start spending some of your retirement savings immediately.
How much should you start spending? We will cover that in future articles. But generally speaking: Once you retire it is okay to start spending the money that your money is making.
If your CD is paying 1%. Spend the 1%. I suggest taking 5% per year if invested in a balanced and diversified portfolio (with at least half of the money in stocks).
Does that make sense? Does it make sense to at least spend the money the money is making? I hope so. Why? Because whenever I sit down with retirees in their 80’s and 90’s, do you know what most of them say to me, “Why did I wait so long to spend my savings? I have more than ever. Dave, why didn’t we have this conversation with you twenty years ago?!”
Regret. Needless worry. Oversaving. Underliving.
But this is not your destiny. You are going to take time to learn the facts. You are going to open yourself up to the idea that maybe there is a better way to handle retirement planning. You are going to find the perfect balance between spending and saving. You might end up living a much richer retirement than you realized.
Be Blessed,
Dave