The Retirementors, a collective authorship writing for Money Watch, began 3 Reasons Retirees Dont Spend with a brief exposition discussing common misconceptions regarding retirement spending, and suggested that buying into these misconceptions can have a negative effect on retirees, turning what should be a comfortable retirement into a time filled with fear and anxiety. The first misconception involves the fear of using retirement funds before the end of ones life, resulting in the need to return to work. This common misunderstanding is largely prompted by failure to plan ones financial situation and needs going into retirement. The second obstacle many seniors face is the fear of depleting savings, leaving one spouse in dire condition after the death of the other. When one spouse dies, there is the possibility of a severe loss of funds due to loss of pension. However this fear, the Retirementors note, prevents retirees from taking trips together, and enjoying their remaining time together, due to extreme frugality and unwillingness to enjoy the fruits of life-long saving. The final obstacle in enjoying ones retirement savings comes from a habitual tendency to save. After an average of 40+ years of saving ones income, letting this habit go proves nearly impossible for some. To combat this, the Retirementors suggest retirees save a small portion of ones pension or social security earnings, if only to placate the inherent desire to save.
GreyWingFinancial.com agrees with the Retirementors comments regarding seniors fear to spend retirement funds, and addresses each obstacle with pros and cons to using retirement funds rather than hoarding them.
The first - retirees fear of running out of money - is certainly derived from a failure to plan effectively and designate portions of saved funds to specific needs. Life insurance company, Globe Life, suggests implementing a budgeting system to avoid overspending in certain aspects of life. Whether the person in question is just about to retire, or has done so already, allotting a specific amount of money for each aspect of life is crucial in providing peace of mind regarding retirement savings. When constructing a plan, retirees should be careful to include basic living expenses, any and all travel or vacation expenses, an emergency fund, and basic retirement-age needs.
The second obstacle discussed by the Retirementors is the fear of failing to provide for a spouse in the case of death. Grey Wing Financial suggests this obstacle may be obliterated by continuing to save a portion of all incoming funds (ones pension or social security, or the earnings from a small, part-time job). Though the savings may not be monumental, setting aside a portion of income may help alleviate stress regarding ones spouse.
Finally, the Retirementors discussed the life-long urge to save. Again, this solution is simple; it is not impossible to save after retirement. Setting aside a portion of any returns on investments or incoming funds is both wise, and a means to remove anxiety regarding failure to save. Perhaps the greatest concern for those already retired, or about to retire, is feeling comfortable and safe in ones finances. Though no investments or markets can be guaranteed, taking the necessary steps to construct a solid, realistic retirement plan is the greatest preventative measure against fear and anxiety about retirement funds.
GreyWingFinancial.com responded to a recent article discussing the common concerns of retirement. GreyWingFinancial.com discussed these concerns and offered practical solutions to eradicate the mindsets leading to retirees fears, including constructing a firm, realistic retirement plan and budget, and continuing to save a portion of all incoming funds.
About Grey Wing Financial:
GreyWingFinancial.com is a site geared toward retirees and those interested in retirement, offering advice and news articles related to retirement finance and planning.
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GreyWingFinancial.com Discusses Ways to Alleviate Retirees Fear of Spending Retirement Funds
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