Moving from the accumulation to the distribution phase of life has some challenges.
It’s hard to go from seeing your account balances grow year-by-year to having them shrink year-by-year as retirement progresses. Ideally, you will live on just the gains and interest, but many retirees will need to draw their accounts down systematically over time to make everything work.
That can feel disconcerting, especially when you’re used to growing account balances.
Many retirees will compensate through unnecessary self deprivation. They make themselves miserable in retirement, never enjoying anything for fear of running out of money.
This is no way to enjoy the retirement you’ve been waiting for.
That doesn’t mean that a trip to Vegas is warranted, but most retirees need to give themselves a little bit of permission to spend their money, enjoy their life, spoil their grandkids, and take a well-deserved vacation.
Of course you always want to balance each financial decision against the potential consequences of running out of funds too early, but don’t be too afraid to enjoy of you worked hard for.
Do you struggle to enjoy your money in retirement?