You have spent your working lifetime saving. Putting money away into your pension and an extra few quid when you had the money. By being frugal and living below your means, you have accumulated a substantial amount of money and you have reached the financial planners holy grail…you are financially independent.
You are now in a position where you are working because you want to and not because you have to. So you decide that it is time to give up your job and pursuing other interests that you have.
But old habits die hard. After spending a lifetime as a saver, it isn’t easy to suddenly start spending all that money that you have watched grow over the decades. Let me tell you something, this is the moment that you have been saving for and it is time to spend.
But you are not alone in having difficulty in switching from a saver to a spender. A study carried out by the Employee Benefit Research Institute (EBRI) found that 60% of those surveyed don’t want to spend down their assets in retirement.
As we can see, the physiological comfort of having money is a big factor, be it for either keeping it for unforeseen expenses or just the security of having money. This is especially through when the security blanket of that regular pay cheque has stopped once you have stopped working.
By the way, the survey also found that those least satisfied with retirement were those with too much debt. This reinforces our belief that carrying debt into retirement is the biggest mistake that retirees can make.
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31 May 2021