Spending in Retirement

You spent decades stockpiling savings for retirement. After years of frugality and budgeting, however, flipping the switch to then spend those hard-earned dollars isn’t for the faint of (penny pinching) hearts.

Your income plan might be the most vital part of your retirement plan. However, when it comes to spending, the majority of financial planning tools don’t capture the reality of how flexible your income needs could be (if needed) as you move through retirement.

Your money mannerisms can reveal detailed aspects of your character and values, which is why the concept of money is so personal.

For many retirees, saving can be the easy part, but spending is a different story. A frugal mindset is something you can carry with you for life, and it might make enjoying the fruits of your labor during retirement feel difficult at times.

One of the top financial concerns of today’s retirees is having enough income to last a lifetime; however, recent studies show there’s also another issue at bay: Leaving behind too much of that income.

Knowing how much money you need to sustain a comfortable retirement begins with having a firm understanding of how much you spend, and there is a simple way to figure that out.

What if our ride to the finish line isn’t smooth? Complex risks including extended longevity and health issues can create a large financial burden on retirees, and as such, recent research from De Nardi shows that Americans are now saving well into their 80s and beyond.

We are experiencing a variety of unique factors that affect our economy today. And, while you might think these areas produce undependable data in the realm of retirement planning, that’s not always the case when it comes to making long-term decisions, specifically in regard to your income strategy.

Between the depletion of pensions, surging inflation and extended longevity, it might feel more complicated than ever before to know how to responsibly spend your savings, not to mention extend your income to potential decades down the road.

If one of your major financial concerns relates to spending changes in retirement, you will find encouraging news here; on average, retirees spend less as years pass.

While the four percent rule might be a well-known standard, a recent Morningstar panel determined that in today’s economic climate, a 3.3 percent withdrawal rate might fare better for a conservative portfolio.