Jacob Schroeder at Kiplinger wrote about the beginner's mind that retirement demands of high achievers: after a career of being the expert, retirement asks people to be new at things again. He included a second skill retirees have to learn from scratch, and asked me about it. That skill is spending.
After decades of trying to get a number to go up, saving more, deferring gratification, watching the balance grow, retirement flips the relationship. My observation: retirement is arguably the first time in a person's adult life that being a beginner is financially safe. Most people have never practiced it.
Many never get comfortable. Morningstar's research shows retirees who follow typical safe strategies, spending only dividends and interest, taking only required minimums, or sticking to a 3.9% withdrawal rate, tend to finish 30-year retirements with large balances left over. That is money that was never enjoyed.
I see it constantly. One client with more than $2 million in investable assets called me in a near-panic after buying a $4,000 piece of furniture. He had done nothing wrong. But the number went down, and that felt like failure. The money was built as a score, not a tool.
Part of my job in the first years of a client's retirement is helping them relearn what the money was for. The plan says they can spend it. The habit says they cannot. The plan is right.
Read the full article at Kiplinger →
