Go and spend some money


Every client is different, and therefore every conversation is different, but there are also a number of similarities. A couple of meetings I had last week demonstrate how similar our conversations can be at times. In two separate meetings with two separate longtime clients, I had the same piece of advice: “Go spend some money” was my message to both.

That advice might sound funny coming from someone who makes a living by trying to get clients to save and invest for their future. But in these two cases, the advice was certainly appropriate. And based upon the report “Living Too Frugally? Economic Sentiment & Spending Among Older Americans,” by Matt Fellowes, CEO of United Income, it’s probably appropriate for a lot more people.

Both meetings I am referring to involved at least one spouse who is more than 80 years old. They are both still healthy, although both admit to starting to slow down a bit. The other thing they have in common is, both couples were very good savers through their working years and are very comfortable financially. Not rich, but comfortable. Both couples have nice-sized individual retirement accounts. And both are taking just enough from each to barely satisfy their required minimum distributions.

More from Advisor Insight:
The bad things good people do with 401(k) balances
Beyond health, home and auto, do you know what kind of insurance you need?
Dog eats cash, man makes stink … and Treasury pays up

My advice to go spend some money is based on my philosophy that because we get to go around only once in this life, we should limit the “I wish we would have …” thoughts before it’s too late. A financial life-planning approach should aim to limit the regrets they may have at the end of life. “I wish we would have taken more family vacations,” “I wish we would have traveled more,” and “I wish we would have given more” are all examples of regrets.

I certainly understand the desire to keep a healthy level of funds available in the event of a long-term-care need. In fact, I support it. The time bomb ticking inside of anyone’s financial plan is the potential for a long stay in a nursing home. So I’m not advocating they go on some wild spending spree. But I don’t want them so concerned about a potential need that they miss out on what life has to offer.

The research report I mentioned earlier confirms that my clients are not unique in this regard. It suggests retirees are not spending enough in retirement to live out their lifelong dreams. The report indicates that, for a lot of seniors, a lack of confidence in future economic growth and their own financial well-being keeps them sitting on large portfolios.

Source link

Products You May Like

Articles You May Like

The Netflix naysayers were wrong
If you win the Mega Millions jackpot, here’s how to maintain some privacy
Trump opportunity zones popular with investors, but might offer less for voters
Powerball, Mega Millions are a combined $1B; The odds of winning both are astronomical
Sealed Air falls after weak preliminary Q3 earnings

Leave a Reply

Your email address will not be published. Required fields are marked *