Retirees, Is Fear Holding You Back?
A financial advisor can give you permission to spend.
You’ve worked hard to enjoy retirement. Don’t keep your savings under lock and key. (Dreamstime)
It’s a huge shift to go from saving to spending in retirement, and some retirees avoid the psychological and financial leap. They don’t touch their retirement accounts until they turn 73 and have to take required minimum distributions. Notably, it’s not only the rich taking this approach: Vanguard studied retirees who had $1 million or less in retirement savings and found that four in 10 left their accounts alone until Uncle Sam made them take withdrawals.
Is this a problem? It depends. If fear is holding you back from enjoying retirement to the fullest, then yes.
If that’s the case, a financial advisor can help alleviate anxiety by designing a sustainable withdrawal strategy, factoring in unknowns like a potential market crash or long-term care needs. Savvy do-it-yourself investors can still benefit from guidance in the “decumulation phase” — the process of tapping your accumulated assets—even if that help is simply giving you permission to spend.
Retirement
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Regular people reach savings goals by living below their means, and your money mindset won’t change just because you’ve stopped working. If anything, the lack of a regular paycheck could cause you to become more frugal.
The key is to avoid regret. If you have modest needs and get peace of mind from protecting your principal, that’s fine—as long as you won’t get old and wish you’d taken that trip or indulged in that hobby when you had the energy for it.
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