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While it may seem as though there can be no harm in living frugally, Fellowes and other finance experts say both seniors and the economy can suffer when spending declines.
Shift of income in retirement. For workers who have earned a paycheck for decades, the shift to using income from retirement accounts can be difficult. "When people start paying themselves, they get scared," says Dolph Janis, founder and owner of Clear Income Strategies Group in Charlotte, North Carolina.
After spending a lifetime saving money, it can feel unsettling to begin pulling cash from accounts that were previously off-limits. "It's a psychological issue," says Nancy Skeans, CEO of Schneider Downs Wealth Management Advisors in Pittsburgh. It's something even her more affluent clients experience. "They are really apprehensive about spending $30,000 or $40,000 for a new car," she says, even when they can clearly afford it.
lol oy vey
having too much money is a problem, having not enough is a problem.
My wife and I are both over 70, and we own our home and all of our "things " are paid for.
Both of us contributed during our working years to the Canada Pension Plan, and in addition to employer pension plans. Mine is military ( 30 years service in the Canadian Forces retiring as the equivalent of a US E 8 ). My wife s is from a number of positions at various Universities over the years.
The CPP pension is based on your earnings per pay period ( gross ) and a equal contribution from the employer. I contributed from the start of the program in 1964, to 2003. My monthly CPP payment is about $1300 as is my wife's, add on two other pension payments and our monthly income is about $ 4500 a month.
We are not big spenders but we do live well. Today my Wife is in The Bahamas ( where she was born ) to attend a reunion of her College. We visit her family twice a year, and travel across Canada as well as Europe. We make contributions to our favourite charities and hold memberships in the local museums, symphony orchestra and the Art Gallery of Ontario.
Proper future wealth management is the key to our secure life now. Starting in our 20's.
It was extremely difficult to let go of our 'saving' mentality after retiring. I still socked away half of my pension check despite high balances in our 401s, IRAs and 457s. And regular savings (we cashed out of DC-Metro large home). We retired early....ages 50 and 51 and I believed all the CNBC, etc. commentators that we would need millions in savings.
Now we are 64 and 65 and we can see that we need to spend down and enjoy at a much faster rate. Our current retirement accounts and savings are larger now than when we retired! If I didn't have this generous pension (70% of my last salary with small COLAs), maybe I'd feel differently.
lol but do you want to reach 90 and be the richest man in the grave yard??
one of the philosophical arguments.
I balance my income (leaving the principle) between what I have to do and what I want to do. If a want is more than my income from investments, then I wait a few months until I have saved enough. Once my principle reaches preset levels that I am comfortable with I give myself a raise - and of course most of that goes toward entertainment. So far I have not suffered deprivation, and at the same time, I do not have a desire or need to spend every day.
Getting to the end with most of my principle intact doesn't bother me because those funds will go to my family. In fact, I am considering creating a trust or some such entity that will continue to benefit my family for years/decades/centuries... How much I have after I die will be $0.
Last edited by blktoptrvl; 11-03-2017 at 10:04 AM..
lol but do you want to reach 90 and be the richest man in the grave yard??
Why not? The money doesn't generally get buried with the corpse. It ends up being redistributed to other people (who then generally go on to spend it).
Why not? The money doesn't generally get buried with the corpse. It ends up being redistributed to other people (who then generally go on to spend it).
Well it could. One big honking hole and "I AM taking everything with me"
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