Retirement Spending: What to do with the Money You’ve Saved

While there are some of us who have little to no hope of ever enjoying a normal retirement (although we do hope we’ll still be employable in our golden years) there are many who have planned wisely, saved money appropriately and toiled endlessly to enjoy a comfortable third act.

It is at this point that some people wind up with a money problem vastly different from the one they’d faced in previous years. For the first time in their lives, they have enough money, and maybe even more than enough, and they’ve got time to spend it.

With a windfall from retirement savings, there can be a tendency for some retirees to get a little reckless in their spending, thinking the “tomorrow” they’d always saved for has finally arrived and it’s time to celebrate accordingly. Or they might think it’s necessary to disburse funds to immediately reduce or eliminate debt completely. This may be smart in some cases, but it is always best to consult with a financial expert before making any big lump-sum payments.

While some kind of reward (in addition to retirement itself) may certainly be called for, folks should take care when handling their new-found disposable income. There are a lot of good reasons to do the right thing, but one rationale for sensible retirement spending stands head and shoulders above all others.

A Fidelity Research Institute report said that in this day and age, a 65-year old woman has a 56 percent chance of living until she’s 85 and a 35 percent chance to make 90; a man of the same age has a 46 percent expectation to reach 85 and a 24 percent chance to turn 90.

Yes, we’re living longer, and while we might pay less for housing, we’ll most likely pay for more health care, so it’s a good idea to continue to be prudent with cash. For the most part, at this point there’s no turning back, and what money you’ve saved will be the lion’s share of what you will need to live off of (part-time work not withstanding).

Retirement is something most of us aspire to, and a comfortable retirement – where all of our “needs” and many of our “wants” are covered – is the best way to enjoy the sunset years. Don’t let a rash decision at the onset of your retirement have a negative effect on the rest of your life. We’ve all worked too hard for that.