Last week we started our discussion of common retirement regrets. It’s our hope at Miramontes Capital that you who may be in the middle or just beginning the retirement planning process can learn from others who went through the transition.
This week’s regret may come as a surprise to those who read last week’s regret of not having saved enough. We’re going to visit the other end of the spectrum this week.
- I wish I’d enjoyed my savings while I still had the energy.
Spend it while you have it.
A common hurdle (some!) retirees need to overcome is the compulsive thought that more money later is better. This is the mindset you’ve had to cultivate in yourself throughout your working years, which can be why it’s hard to combat: it makes sense to be cautious.
Following this mindset through after retirement, however, can lead to an absurd situation. That savings plan you cultivated throughout your working years was intended to provide you with a comfortable retirement that offers you plenty of room to branch out. Not branching out when the time comes would be unfortunate.
Now believe me, this is a good problem to have, and it is far easier to address than its opposite: finding you don’t have enough money. But you must also face the truth that this will be your only retirement. The adage, “You’re only young once” becomes even truer at this stage of early retirement, where you still feel young and energetic enough to take on new challenges. Imagine this: you’ve saved diligently for your dream trip to Europe, but after retirement, you decide to wait a little longer, say, until you pay off your house. When you do finally pay off the house, at age 75, you take your trip to Europe, but are frankly more comfortable in the hotel at evenings, because of your tiring day.
It’s more fun to experience travel when you’ve got the energy. And this is true with most engagements. That’s why many of our clients at Miramontes Capital plan to make use of the first 5 to 10 years of their retirement to do the dream trips, etc.
Plan accordingly
With that in mind, your planning in other areas should reflect this, notably in the area of Social Security payments. There is a general sentiment that the longer you wait, the better (Which I don’t disagree with). But keep in mind that more money is not an end in itself. You’re going to want to eventually use that money, and if it’s more useful for you toward the beginning of payouts (even if you could get marginally larger payout down the road), you may want to consider taking it.
These general suggestions may not mean much to you now, especially because that’s what they are: general suggestions that may not fit for your situation. You’re going to want a professional with your details assisting you with any long-term spending projections.
Keep one question mind, though. What goals and activities in your retirement plan shouldn’t wait?