Imagine retirement as a beautiful, scenic road trip. You saved diligently throughout your working years and accumulated a stack of cash that represents your gas tank for this journey. A well-crafted spending plan is your roadmap, meticulously outlining how much money you may need for each leg of the trip for groceries, housing, healthcare, and even that dream vacation. But, without a plan, your retirement road trip may quickly turn into a stressful adventure.
Overspending early in retirement may leave you stranded in an unexpected place. Without a plan, you may be tempted to freely spend your savings, neglecting healthcare costs, inflation, or unexpected emergencies. Suddenly, you're stranded with no money left to reach your destination of financial security.
Conversely, to avoid spending money, you may deprive yourself of the activities and experiences you envisioned during retirement. An overly frugal approach may leave you with a tank full of unused resources and a missed opportunity to fully enjoy your golden years. Unfortunately, you cannot buy lost time.
Without a plan, you may be swayed by unexpected financial detours. A friend's investment opportunity or a family emergency could lead to unplanned spending and derail your financial course. Sticking to a spending plan helps you avoid these impulsive detours and ensures you have the resources for the experiences you truly value.
A good spending plan, created with the help of a financial planner, acts like a GPS for your retirement journey. Informed by ongoing communication between you and your financial planner, your spending plan considers all income sources, essential expenses, and desired lifestyle while helping you navigate the ups and downs of retirement. Check-in with your financial planner today.
Wendolyn Forbes is a CERTIFIED FINANCIAL PLANNER™ with Wealth Transition Finance, A Member of Advisory Services Network, LLC. Wendolyn is a fee-only financial planner and member of the National Association of Personal Financial Advisors (NAPFA).
CFP Board owns the marks CFP®, CERTIFIED FINANCIAL PLANNER™, and CFP® (with plaque design) in the U.S.
This material is provided as a courtesy and for educational purposes only. Advisory Services Network, LLC does not provide tax or legal advice. The information contained herein is general and is not exhaustive by nature. Federal and state laws are complex and constantly changing. Consult your own legal or tax professional for information concerning your individual situation.
Originally published in the August 2024 issue of Positively Haywood.