As Life-Centered Financial Planners, we always want your finances to bring a smile to your face.
But for most seniors, it’s your spending that’s going to “smile” as you age through the Go-Go, the Slow-Go, and the No-Go years of retirement.
That’s because spending, like life, doesn’t progress in a straight line. At every stage of retirement, your needs are going to change, your goals are going to change, and your perspective on the future is going to change. It’s important that you have a spending plan that’s capable of supporting you today while also preserving your long-term financial security.
And it’s also important that you avoid two potential pitfalls of the spending smile: spending too much too early in retirement or being too afraid to spend and really enjoy your retirement every step of the way.
Here’s what to expect from the three stages of retirement and some tips on how to keep “smiling” across your whole $Lifeline.
Stage 1: The Go-Go Years
Where will you “go-go” after you retire?
A month in Europe? A Caribbean cruise? A road trip across the country in your new camper? A tour of your home state’s best golf courses?
Most retirees who have the means spend their 60s and early 70s crossing items off their bucket lists, travelling, and enjoying their favorite sports and hobbies. While some of these goals might trigger a slight spike in spending, you’ll still likely spend a bit less now that you’re no longer commuting to work and raising a family. You might even have your home and vehicles paid off as well.
While we hope your “Go-Go Years” last decades, there’s no predicting life’s ups and downs, such as illnesses and accidents. That’s why seniors need to make the most of this time while they have it. Folks who struggle to transition from a savings mindset to a spending mindset might spend the prime of their Golden Years too worried about money to really enjoy it.
Stage 2: The Slow-Go Years
In the middle of your retirement smile, you’ll eventually start to slow down a little bit. And your spending will slow down too.
That doesn’t mean you’re done enjoying retirement all together. It just means you might go from three days at the tennis club every week to one. Instead of weeklong international vacations, you might downshift to long weekends visiting the grandkids. Eventually, you’ll start spending a little more time at home, focusing on your interests, your hobbies, your community, and your loved ones.
Purpose and connection often become very important during the Slow-Go years. In addition to spending more time with friends and family, you might explore opportunities to volunteer, mentor, or teach. You might spend less money on yourself and more on your charitable giving goals. You might also explore downsizing to further economize and to make home life a little more manageable.
Stage 3: The No-Go Years
In Malaysia, many retirees find that their spending starts to climb again in later life, mainly because healthcare becomes more frequent and more costly. Seniors who don’t plan early for these expenses can end up having to make tough choices about support that isn’t fully covered by public hospitals or basic insurance, such as hiring a caregiver at home, paying for regular physiotherapy, or moving into a private nursing home or assisted living setting.
And even folks who do spend modestly might be unprepared for how decades of normal inflation and rising Medicare premiums could erode their purchasing power.
However, that doesn’t mean that every time you take a vacation in your 60s you’re making life worse in your 80s!
By anticipating expenses and $Lifeline transitions that we know are coming, your Life-Centered Financial Plan can help you live your best life possible throughout your retirement.
Schedule a Retirement Coaching session and let’s start planning to brighten your spending smile.
