HOWTO SPENDWISELY IN RETIREMENT
Make Your Savings Last
When it comes to retirement and finances, there’s enough material about saving to fill a library. You see commercials on TV showing one tiny domino gradually becoming a massive tower, you hear advice from coworkers and family members, and you read books and articles on the topic. Much less attention, however, is paid to how to spend those savings once you’re actually retired, even though it’s a significant part of the equation. After all, it doesn’t matter how much you save if you blow it all in a year. Here are a few considerations to keep in mind as you begin chipping away at that nest egg. HOW MUCH TO SPEND The easiest way to budget for your retirement is with a level spending plan. In this system, you simply estimate how many years your retirement will last and divide your savings by that number. It’s better to make a generous estimate rather than a conservative one. A survey of financial planners conducted by the American Institute of Certified Public Accountants (AICPA) found that outliving savings is the No. 1 concern of those approaching retirement. Underestimating your life span is an easy way for this fear to come true. Of course, a level spending plan assumes that your financial needs won’t change over the course of your retirement. If you’re the type Client Spotlight
in weightlifting competitions. The level of dedication Colleen puts into her relationships and her sports endeavors is inspiring to watch. Brian’s commitment is also something behold. As a police officer, he somehow manages to balance the more serious aspects of his job with genuine compassion for human beings. He is a perfect example of someone who fully comprehends and enforces the law but who also understands the innate human capacity for making mistakes. In addition to his compassion, he is always working to be a better policeman. In fact, he ended up going back to college to gain more knowledge and move up higher in his department. It’s been nearly two whole decades since I started working with Brian and Colleen — several years longer than I’ve owned Libman Tax Strategies. I am grateful for their friendship and the work they provide for the community, both in terms of being a great representation of a fun-loving family dynamic but also in the ways that Brian protects and serves as an officer. Especially with the recent fires that horribly affected families all across the state, I am cognizant now more than ever of the brave sacrifices of all police officers, firefighters, and first responders. To Brian and to all the other people out there helping with the fire, I’m keeping you in my heart. of person who regularly meets and exceeds your budgeting goals, you can probably make it work. If not, you may want to consider a plan that allocates more money with each passing year of retirement. In the event of increased medical costs or other later-life expenses, an escalating plan provides a financial safety net. WHAT TO SPEND ON Some of your spending choices will come down to personal preference and interests, but you might be surprised to learn that one category of spending consistently proves more fulfilling than others. Professor Michael Finke of The American College surveyed nearly 1,500 retirees and found that spending money on leisure activities and experiences caused the lowest rate of regret. Finke calls this “social spending” and surmises that it’s favored because it encourages older adults to get out into the world and enjoy their retirements. There is no perfect plan for how to spend your savings during retirement. But there is one very wrong way to go about it, and that’s mindlessly. However you choose to spend your savings, make sure you have a plan.
Meet Brian and Colleen!
In our modern, fast-paced world that keeps people searching for the next best thing, finding relationships or friendships that withstand the test of time is rare. When I first met Brian and Colleen McLane, my first impression of them was that they had to be the cutest couple I’d ever met. As individuals, they
are both phenomenal people, and as a couple, they have this fun and playful dynamic. In the 18 years I’ve known them, while they’ve had a lot of different work and family changes, their team dynamic hasn’t seemed to waver at all.
Colleen is one of the most awesome women I know. In addition to being a mother to three amazing children, she competes
2 • www.AdamLibman.com • Pay Less Taxes by Implementing Tax Reduction Strategies
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