Accumulate or Spend?

27/07/16 2:05 pm | Comments (0) | Posted By:

When is it time to retire? Is it some set age such as when social security or medicare benefits are available? It’s different for everyone. And people are continuing to work later in life. Why? Maybe because they need to (haven’t saved enough – the recession hit them hard) or maybe because they want to (enjoy what they are doing).

The toughest decision to make for many is “when do I have enough?” “When can I stop accumulating and be okay with spending?” It’s a difficult mindset to get around. During our careers we are constantly accumulating. It’s tough for some to flip that switch and say “ok, I’ll be okay. I’ll be able to continue living in the lifestyle I want.”

Lisa Du, in her article “Golden Years Redefined as Older Americans Buck Trend and Work“, provides some real life examples of why people are continuing to work:

  1. Using dollars for discretionary spending, i.e. vacations.
  2. Wanting to maintain their lifestyle.
  3. Worried their lifespan will outpace their wealth.

There are other reasons for continuing to work other than just financial. Some want to keep their mental skills sharp and working is an opportunity to do this. They want to feel they are contributing and have a purpose. This is especially true for owners when they sell their business. They have worked long and hard and kicking back in the rocking chair doesn’t appeal to them.

I recommend that you think through what you want to do during your “retirement” years. Determine what you need to accomplish that. Evaluate what you have. Develop a timeline that fits. Be flexible. You may move it. This is your life plan. Make it happen.

There are many financial planning tools and advisors that can assist you. Utilize them. We have assisted clients with determining if it is “ok” to flip that switch. Feel free to give us a call.

 

 

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