When you think about retirement, you might picture long lunches with friends, lengthy holidays, and time to do those long-awaited hobbies. However, for many people, retirement doesn’t always feel like freedom. While trying to balance their desire to enjoy life, spending in retirement can come with the fear of running out of money or leaving less for loved ones.
We look at why the right retirement mindset is the key to enjoying life in your later years.“Retire from work, but not from life.”
M.K. Soni
Dealing with retiree guilt
Many retirees often feel guilty about spending or anxious about whether they’ll have enough. Without financial clarity, there’s a risk of either overspending and running short or underspending and missing out on the precious experiences they’ve worked hard for.
Instead of experiencing freedom, retirement can sometimes bring worry, too. Retirees might ask questions such as, “Am I spending too much? Will my money last? Should I hold back so I can leave more for the kids?”. As a result, retirement can be unsettling, often leaving retirees second-guessing what they should be spending their money on.
Spending feels different in retirement
The reason some retirees struggle with how much they can comfortably spend is due to their mindset. During your working years, money flows in regularly through your income. You earn, you spend, you save. But when you retire, life is suddenly very different. There’s no monthly salary coming into your bank account, and this psychological shift can be huge.
Even if you’ve built up a healthy pot of savings and you’re drawing from a sizeable pension, it’s common to feel nervous about spending. Giving yourself permission to spend can be hard. Some retirees feel guilty when they book a holiday or treat themselves. Others find themselves avoiding big purchases, even though they could comfortably afford them.
Without a clear financial plan, there’s also the risk of overspending early on. Some people use up their pension savings too soon, leaving less money to live on in later life. This can become problematic when health issues arise, and retirees have to face large care costs.
Underestimating the length of your retirement could also mean that your money runs out sooner – see our blog, Outliving your money: The hidden risks in retirement planning.
A financial plan gives you permission to spend
When it comes to retirement, spending too freely means you might run short. But if you spend too cautiously, you could risk missing out on experiences you’ve worked hard for all your life. A structured financial plan helps people spend with confidence, so you can enjoy your retirement and safeguard your legacy.
Cash-flow modelling can help to bring clarity and prepare you for your retirement. This tool maps out your income, spending, and savings over future years to see how long your money is likely to last under different scenarios. It presents a visual picture, so instead of guessing at numbers, you can see everything clearly.
Financial planning isn’t just about protecting wealth; it’s also about helping you use it meaningfully. It can permit you to spend so you can enjoy socialising with friends and travel. It will also give you a clearer idea of how you can support your family.
Balancing your lifestyle today with your legacy tomorrow
Spending confidently in retirement doesn’t mean forgetting about the future. A sensible financial plan will help you to enjoy your wealth, so you can still leave gifts to family or a charity.
Inheritance planning allows you to enjoy your money now and still leave a meaningful legacy. This is about making sure your wishes are honoured, and you can pass on wealth efficiently. Planning your inheritance can include leaving gifts to your children, helping grandchildren get onto the property ladder, or supporting a charity close to your heart. With the right structure in place, this can also help to reduce the impact of inheritance tax.
You don’t have to choose between enjoying retirement and leaving a legacy. With careful planning, you can do both. Remember, your retirement years are a reward for decades of hard work. This time of life should feel full of opportunities, not anxieties. By addressing both the emotional and technical sides of money, you can change your mindset and make your wealth last.
“The question isn’t at what age I want to retire, it’s at what income.”
George Foreman
Retirement Planning, Nottingham and Lincoln
Your retirement should feel like freedom, not fear. If you worry about whether you’re spending too much or not enough, then you’re not alone. The good news is that you don’t have to navigate the uncertainty of retirement on your own. And with the right strategy in place, you’ll have the confidence to enjoy your money and your retirement.
At Balance: Wealth Planning, our team works holistically to align your values with your financial planning. We’ll check if your retirement plan balances your lifestyle today with your legacy of tomorrow. We aim to ensure you won’t need to worry about running out of money in the future, and to enable you to pass on a meaningful legacy.
Talk to us about building confidence into your spending strategy, so you can look forward to your retirement. Get in touch to speak to our financial planners.
https://www.ruleoneinvesting.com/blog/personal-development/retirement-quotes/
https://www.pbmares.com/wealth/retirement-planning-shifting-your-mindset-from-saver-to-spender/
https://wingatefp.com/the-benefits-of-financial-planning-for-those-approaching-retirement/
