Spending: When It’s Time To Dip Into That Retirement Account
Posted by Richard on November 2, 2023
Let’s take this fancy vacation. It’s time.
We can’t spend that much money!
Why not? We have enough. It’s time.
A variation on that conversation happens with every retired couple. It’s part of the surprisingly difficult transition from saver to spender.
After all, you spent decades building up the nest egg and paying off the house, and that habit is not easy to break. According to a study by Black Rock, the majority of retirees still have about 80 percent of their savings after two decades in retirement.
But, at some point, retirees have to admit they won’t live forever.
Quoted in CNN Business, one financial planner says retirees have to remember their money is working, so they don’t have to work now.
But they should still plan.
During retirement, the future is a guess. You don’t know how long you will live, or what you will need for health, family or economic emergencies.
However, you can know your expected expenses and your fixed income. The difference is what you need to draw from your savings over time. The hard part is subtracting what you want to do from savings.
Financial advisors say maintaining an emergency fund is crucial. You still need to plan for expenses so you don’t fall into debt.
But you may be able to take that vacation. It’s time!