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If well-off retirees are more frugal than necessary, they end up denying themselves the fruits of a lifetime of hard work. Their heirs eventually benefit, but the vitality of the American economy suffers. “Wealth is getting more and more concentrated among households that are averse to spending it,” says Matt Fellowes, a former Brookings Institution fellow who’s founder and chief executive officer of United Income, a retirement planning startup. “It’s trillions and trillions of wealth that is not benefiting anyone except asset managers.”
I wonder how much Matt Fellowes has saved
And frankly how I spend my money is MY business
The idea that people are “denying” themselves the fruits of a lifetime of hard work sounds so supportive but really it means spend more than you are comfortable with because a “guesstimate” says you won’t need it for the rest of your lifetime
OR I can sell you a product to help provide for your heirs if you turn loose of some of that saved up trillion...
The problem would be solved if we could only know the date of our impending death. If you might live until 100, you should hang onto your money for your future years....you aren't denying yourself the fruits of your labors, you're being smart. OTH, if you are going to die at 65, you could spend all that money now. But nobody knows.
It's common sense to hang onto it in case you have a longer life than you thought...it's security.
Soon there will be a blood test for date of death
Then spend spend spend
I wish to die broke
I'm frugal by nature but try to loosen up a bit as I age. My biggest luxury is eating prepared meals - thank goodness there's a business in town preparing healthy food bowls for take out. Food trucks and restaurants can be a bit hard on the waistline. I like when that money is going to local businesses.
I like to travel but get a kick out for finding the best deals - even if they aren't the bottom dollar cheapest. I use Air bnb a lot - also I actually like to camp, but not for more than 1 or 2 days in a row.
My latest in indulgence is spending a lot of money on clothes that pack down to nothing. I just spent $53 on a button shirt that weighs less than 3 oz. My last trip I carried a long sleeve base layer that was so light I'd forget it was in my little backpack until the wind blew and I needed to put it on. But those are made in Indonesia and Sri Lanka so not much help for the local economy here.
The assisted living where my dad is runs about $3K for basic service for 1 person added assistance might add $4-600. So I figure I've got that covered. They try to keep patients in house and don't ship them off to SNFs until absolutely necessary.
Soon there will be a blood test for date of death
Then spend spend spend
I wish to die broke
Please believe me when I say it's your money that you worked hard for and if that is your desire then 100% go for it. But for me it's like you are writing in a foreign language. I just don't comprehend the concept of "spending everything before I die and having the check to the funeral home bounce" as I have seen the sentiment stated here a few times. Again, it's your money and I wish you the best.
As the OP a few points of clarification regarding the article linked. It is not about the normal spending and reserves most are talking about. The article is based on financial advisors who have told their clients that they have more than enough reserves to cover health care overage ( often estimated to be over 250k for a couple). In addition having LTCi or adequate reserves for long term health are. In Addition money for home repairs and other expenditures etc etc etc. They are talking about large reserves in excess of long and short term possible expenditures including legacy money.
And I still state that there is no such thing as excess reserves.
Just today, coincidentally, I got hit with an expense of $1500 for my MIL air conditioner repairs, and also found out that she'll have a special condo assessment (which I'll have to pay) of between $2000 and $3000 due by the end of October for roof replacement. So the "excess reserves" can come in handy, I don't know how many more liabilities will be out there in the near future.
MIL believed that you should spend everything and enjoy your money, and when you are very elderly and broke the Government would take care of you. Well, she wasn't exactly right there.
Yes, we had an emergency plumbing repair a couple of weeks ago. Pipes blocked with tree roots. Plumbers there four days on and off , cost about $US 4,000.00. Ouch! One very grouchy husband that week.
If I knew what those years was going to cost us above our income and savings...
If I knew if either of us would need caregivers or long term health places...
Then YES I would definitely plan better and take nicer and more vacations, upgrade my furniture, buy a new vehicle, have someone else do the landscaping and paint the house and clean the shingles.
I'm still looking for the crystal ball which will tell me how much I can spend. In the mean time I will continue to be frugal, just. In. Case.
I'm living in a senior Mobile home co-op in Tucson, and I decided to head up an Art Fund Drive to put some art work/statues, sculptures in our artless community plaza. I kicked it off with a $250 donation, and I requested that 200 individuals in the park contribute $10 each.
It's been 6 months now and the fund is barely over $400, not enough $$ to buy anything decent. The office assistant said that you have to remember there's people barely scraping by here, and $10 is a lot of $$.
Ok! I asked for too much! Then how about $5 each and that would bring the fund up to $1250.
I was in accounting for 10 years and I have a keen nose for those scraping by and those that could write a check for $1000 or $5000 and not miss it the next day. One theory of mine is seniors are living under a veil of fear, fearful SS will run out some day, along with Medicare and better not spend it.
I ran into a man walking his dog the other night. He told me he just spent $6000 on an operation for his dog, and $1000 to remove 5 teeth. And not even $5 for the art fund? Scraping by?
I've grown so disgusted with it all I'm now going to request the Board refund the donations to the donees and close it down.
I had put together a nice catalog of potential works of art, for people to look at, and I added that anyone giving to the art fund would be able to vote on which art work they prefer for the plaza.
Invite the amateur artists who live there to produce some works and put them on display. You might be surprised how good some of them might be.
My DW and I are probably too frugal - but with a lifetime of practice, we are probably not going to change that much. I get joy in finding a good deal even if don't need to.
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