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Post-Retirement Spending: Don’t Panic. Make a Plan.

Post-Retirement Spending: Don’t Panic. Make a Plan.

June 21, 2022

When most people think about retirement, they think about saving for it. But there’s a second phase that many people often don’t consider: actually being in retirement.

Most people only focus on accumulating wealth and the strategies used to save and grow their money.  It takes a completely different mindset to develop and follow a plan designed to make sure your income can last a lifetime.

Here are a couple of situations I’ve seen people get themselves into:

  1. Some people want to continue trying to hit home runs after they retire without taking into consideration how devastating a strikeout can be to their nest egg and future income.
  2. Others develop a strategy born out of fear and are not aggressive enough or try to time the ups and downs that occur in the stock market. This strategy usually causes them to miss out on the return necessary to make sure their money can grow to keep pace with inflation and last their lifetime.

3 Post-Retirement Topics to Consider

Dream Retirement

When we meet with a client about their retirement plan, there are some key questions we ask:

  • When do you want to retire and what do you want to be doing during retirement, or where would you like to be doing it?
  • How much income will you need to make your dreams come true?
  • If I could wave a magic wand and grant you three wishes, what would they be?
  • What financial plan do you have to make this happen?

Income Streams

We discuss the different income streams they might be able to tap into during retirement so that we know exactly what they have coming in. These might include:

  • Pension
  • Social security
  • Investment income
  • Part-time employment income
  • Spouse’s income if they continue to work

It is critical to design a proven retirement income strategy and investment allocation that can help their assets continue to grow at a reasonable return with reasonable risk.

Unexpected Expenses

Part of successful financial planning is creating a plan to deal with unexpected emergencies. Unfortunately, some situations can get even more expensive as you get older. Here’s what we’re taking into account so that the client’s retirement plan doesn’t get derailed:

  • Health insurance, healthcare needs, illness, long term care expenses
  • Caring for elderly parents
  • Providing additional financial support for children or relatives in need
  • Temporary price increases from inflation that require additional income (or more than originally anticipated)

Don’t Panic - Plan.

I realize that some of this sounds a little doom and gloom – that’s not the intent. It’s important to know all the facts about post-retirement spending so that you can plan accordingly and stay as in control of your finances as possible. Unfortunately, when it comes to retirement, there are no do-overs.

It is critical that you not make an investment mistake, especially in the five years before and after retirement.  We use proven investment strategies designed to minimize or eliminate the risks associated with stock market crashes or prolonged economic downturns. 

By looking at all potential sources of retirement income we can design a plan that will allow you to live your ideal life, while putting the necessary safeguards in place to ensure your retirement income lasts a lifetime.