Podcast Episode 230: Spending Your Money With Confidence

Today’s Wisdom:

When you think ahead to retirement, do you worry at all about how much of your hard-earned money you’ll be able to spend? The entire goal of financial planning is to provide you the confidence to spend your money without fear that you’ll run out. Let’s discuss the reasons why retirees lack confidence and share a few stories about how we help clients overcome those concerns.

Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.

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What You’ll Learn:

The last thing a retiree needs to be worrying about in retirement is running out of money. Having that fear – justified or not – will keep you from fully enjoying everything you have been working towards.

But the reality is many people do lack the confidence to spend their money in retirement because they can’t overcome that concern. On this episode of the podcast, we want to dive into this issue and discuss why it happens and what you can do to change your outlook.

When we come across this from someone that meets with us, the driving force behind the worry is a lack of planning. It can seem like a cliché answer but it’s so true. The entire reason you build a plan is to replace that doubt with confidence. And part of the planning process is formulating an income plan that will ensure you have enough money to last your entire requirement.

The other reason people often lack confidence is a little more difficult to get rid of. Whatever the reason(s), people often have a psychological barrier to spending because of how they’ve always approached finances. Those habits might always be there, but we can build a retirement plan that lays out a clear picture of your income and expenses so that you know how much you’ll be able to withdraw every month.

When people try to plan for retirement on their own, they often get too focused on maximizing the rate of return that they’re getting on their money. But the truth is that you don’t have to get the best rate of return to guarantee yourself enough money in retirement. It’s about smoothing out those returns over time much like a pension fund would do.  

To help you get a clearer picture on how this works with our clients, Joel will share a couple examples on the podcast of people that he’s worked with to build a plan to overcome these challenges. As always, a great place to start if you are lacking confidence is our Money Map Retirement Review, which you can contact us about now.

[0:41] – Fun Fact of the Week  

[2:31] – Why do we lack confidence

[4:37]1 – Figuring out a rate of return on your money  

[6:53] – Example of giving a client confidence in their retirement spending

[9:13] – When you have to talk to someone about lowering spending

[11:59] – Money Map Retirement Review process  

Thanks for listening to this episode. We’ll be back again next week for another show.

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Final Thoughts:

“Everyone wants to hear how you can buy Bitcoin and make a fortune or buy Tesla stock. Everybody wants to talk about that but very few people want to be told that they have to curtail their spending.”

– Joel Johnson

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