How do you overcome fears of spending in retirement?

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   How do you overcome fears of spending in retirement?

You can safely spend more in retirement than you think and not run out!  This is because stage one of retirement is typically when you spend the most; however, you need to have a plan and get the balance right in your portfolio. 

 I have been helping people, primarily expats and high-net-worth individuals, with retirement planning for close to a decade and a half.
 I have found most people are afraid of spending too much in retirement, but could actually spend more money than they assume they can.

 Before speaking about this, I should mention that I will be speaking about this topic in a forthcoming webinar you can register for below.  You will receive a free recording if you can’t attend!
 Let’s first look at some facts:

 1.  Inflation is an almost guaranteed risk.

 So, having all your money in cash is far from risk-free.  If your bank is paying you 2.5%, inflation is at 3.5%, and you are spending 3% a year, you do face the risk of running out of money.

 2.  By the same token, assets that long-term outperform, like stocks, shouldn't be 80% of your net worth in retirement, as a crash will impact you more in retirement compared to when you are young.  A well-balanced portfolio is essential. 

3.  According to academic research, if you have a well-balanced portfolio, you can take out 4% of your portfolio each year and adjust that amount to account for inflation. So, that means withdrawing $40,000 from a $1million portfolio, and then $42,000 next year if inflation is 5%.

 4.  However, in the real world, you have three stages of retirement.

 Stage one.  You have the energy to do things like travel, go out, and so on.

 Stage two.  You do fewer things due to ill health, less energy, or just less willingness to go through hassles.  Even a healthy eighty-five-year-old likely won’t want to do as much as a healthy sixty-six-   year-old

 Stage three.  Your only expense is medical care.

 You can actually spend more in stage one than you anticipated without worrying about running out of money if you work on a plan with the assistance of a financial advisor or financial planner. You can only have peace of mind if you actually go through a proper financial planning exercise.
 I will discuss this in greater detail in a forthcoming webinar, as previously stated. If you sign up below, you will receive a free recording if you can’t attend!
 Further Reading
 You're Probably Hoarding Too Much: Why You Can Spend More in Retirement Than You Think

  Writer: Binod Kumar Simkhada 
binodkumarsimkhada315@gmail.com

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