Retirement Planning: Shifting Your Mindset from Saver to Spender

This article is Part Two of a Series.

Retiring is one of the biggest life decisions individuals make during their lifetime. It is also one of the most exciting. Most people view retirement as a financial decision, and that is true. However, it’s equally important to consider mental and physical health alongside financial health when planning to retire.

This two-part series explores common financial risks to consider before retiring. The previous installment, Retirement Is Not Just About Wealth. It’s About Well-Being, focused on the importance of being financially prepared for retirement, but retirees often need to mentally prepare as well.

Shifting Mindsets

Throughout the working years, many individuals focus on saving and planning for retirement. But when that day finally arrives, the shift from saver to spender can feel uncomfortable. It can be difficult to start drawing down on the funds that took decades to build up, and that feeling is completely valid.

What it really boils down to is that simple, but important, question: Am I going to be okay?

Comprehensive financial planning is the key here. It involves looking at investment accounts along with other income streams, upcoming expenses, anticipated health events, legacy goals, taxes, and more. The idea is to take a proactive approach to each piece of the financial puzzle, rather than reacting to changes in the economy or policy.

Concerns about outside factors are common. This includes inflation, stock market performance, Social Security, tax rates, and government regulations. But when each of these risks is addressed with proactive financial planning, retirees are better positioned to manage uncertainty when it comes up.

By looking at all aspects of life, retirees can find freedom and be more comfortable in shifting their mindsets from saver to spender. With the support of a trusted advisor who understands the full picture, it becomes easier to embrace the next chapter and enjoy the rewards of a lifetime of hard work.

Defining Retirement

After adjusting to the idea of becoming a spender, the next question often follows: What is retirement, really?

That’s a surprisingly complicated question. Every individual has a different answer about what retirement means to them. For some, it’s a transition to part-time work. For others, it means stepping away from the workforce entirely and getting to relax. Some see it as freedom from the daily grind, with the chance to travel, pursue hobbies, and reconnect with loved ones.

The common thread is choice. Retirement is whatever someone wants it to be. The possibilities are endless, but the most fulfilling retirements often come with a sense of purpose. This can be volunteering, playing sports, gardening, hiking, joining a book club, working part-time.

After identifying with a profession for the past 20-30 years, having a sense of meaning beyond work can contribute to greater happiness and better health in retirement. Planning for the future also means staying mentally and physically active.

Planning Early and Often

Retirement might be next year or 30 years away. Regardless of the date, it is imperative to plan early and often. Starting early allows individuals to make adjustments as life inevitably changes.

The definition of retirement is not fixed. It may change over time, and when it does, the financial plan can evolve with it. In other words, retirement planning does not stop at retirement. With the potential of two or three more decades of life ahead, there will be changes along the way. This includes tax laws, inflation, market volatility, and government regulations. Most importantly, personal goals and needs continue to develop and require a new strategy.

Having a long-term plan along with ongoing guidance provides peace of mind through all phases of retirement. Regular check-in and updates are expected and help individuals stay on track with whatever the future brings.

Learn More

At PBMares, our strongest motivation is to help our clients create the future they envision for themselves and their families.

As an independent registered investment advisory firm, our fiduciary standard of care guides us to make decisions in your best interest. Our evidence-based approach is informed by academic research. This enables us to properly diversify your assets, while considering expenses and tax considerations, and ultimately support your objectives for the future.

Let us become part of your financial team. Our driving philosophy is to do what is best for you, your family, and your future.

Contact us today.