11/01/19
Mrs.Straub
Personal Finance A2
Why Are Retirees Afraid to use Their Savings?
When you retire, don’t you want to be able to spend your money that you have saved up for so long? Maybe not on unnecessary things, but on items that may benefit you or/and your family. Retired folks today do not look to spend their money because of the fear of losing all of that money. This is understandable, as if you spend too much, it will lead to lots of controversy with what you may have left in your account. But if you spend all your life saving up for a good, beautiful retirement, why not spend it? Before you keep reading, think about it yourself and what you would do.
How much is too little? This question may come up when withdrawing money from your savings account as a retired individual. Early retirement can lead to this question, as you do not know how much to spend because of your want to not run out of money. From a customer standpoint, items may seem more tempting as you are in your retirement phase and this may lead to a lot of spending on unnecessary things. For example, if you choose to buy something that is over expensive like some sort of technology, is it really beneficial if your losing so much money when you are now in your comfortable, amazing, retired life? Once your retired, it is very likely that it would stay that way as you enjoy yourself more with family, friends, and sometimes just yourself. Spending a load of money on things like that would end up being a negative instead of a positive to your savings account and savings in general.
Now yes, health issues may occur later in life which leads to you having to spend your money that you have saved, but that is what your money is there for as well. A 2009 study estimated that by the time middle income retirees are in their 80s, they still had not touched 3/4 of their savings. Depending on who you are, that could be huge, and a great source of money to use if needed in the health situation.
Overall, when you and I are retired, we may have different ideas and have different ways to spend our money, but remember that you are working now and saving for that wonderful retirement life. Once your retired, spend as you please, but the goal is to be smart and spend only on things that are necessary. Putting yourself in a good spot before retirement is great, but being retired and ending up broke could be very unfortunate!
Works Cited
Samurai, et al. “The Fear Of Running Out Of Money In Retirement Is Overblown.” Financial Samurai, 11 Oct. 2019, www.financialsamurai.com/the-fear-of-running-out-of-money-in-retirement-is-overblown/.
“Squared Away Blog.” img_header_squaredawayblog, squaredawayblog.bc.edu/squared-away/half-of-retirees-afraid-to-use-savings/.
Wasik, John F. “Why Retirees Are Afraid To Spend Their Kitty.” Forbes, Forbes Magazine, 11 Nov. 2019, www.forbes.com/sites/johnwasik/2019/11/11/why-retirees-are-afraid-to-spend-their-kitty/#785170773072.
This is a good reminder. I, of course, would love a way to budget this. It's not hard to understand why a retiree would try to keep their money, and that may have to do with how much they've actually saved. If they don't have as much put away, whether it be irresponsible planning, financial issues, a low paying job, whatever, how do they go year to year spending only what is feasible? Clearly, you can't just go around cruise to cruise until the money dries up, as there are 20-30 years after that you still have to live. Should retirement age be pushed back? Or should retired people have undemanding jobs, like a Walmart greeter? Or is there something else? Not everyone has enough to last them 30 years or more as the life expectancy continues to rise.
ReplyDeleteI think this is an interesting idea. One of the big reasons I think older people don't spend their money is because they don't have anything specific that they want to spend it on. They don't feel the need to go out and buy something, which means they just save the money that they have without using it. Perhaps if they had a budget to spend their money on, vacation ideas, or other ways that they would find their money useful, they may end up using more of it during their retirement. I think older people also try to save money for emergencies and inheritance for their family.
ReplyDeleteThis is a very good topic to talk about, although we are a ways away from retiring it is still important part of your life that you need to think about. Many people don't plan for the future, they are more living a day to day kind of life, which may make them not realize how important retirement is. Another key factor that many people forgot to look at is how much they are putting and calculating how much they will have for retirement. What is also hard is that there isn't a certain amount of money that is a good amount. It's all based on how you are going to spend your money and how you will budget it, everyone is shooting for a millions dollars for when they retire, but many people fall short.
ReplyDeleteIt’s good to think about retiring even as a teenager as this is going to be a major part of our lives in the future. After all, the point of a career is to save money to retire. It’s scary to think about running out of money when you are too old to work efficiently but with budgeting, as you mentioned, it doesn’t sound like it would be as stressful. But how many problems do we have with older generations running out of money? How much should we assist them and how would we do that without hurting ourselves?
ReplyDeleteSpending money can be a scary thing, especially if you have been frugal your entire life. Although, many save a lot through the years, so they have the ability to live a comfortable retirement. I agree with all of your opinions. However, I wish there were more facts about how much people are saving for retirement and how many people come out of retirement with debt.
ReplyDeleteI thought that it was very interesting that most people that are retired are afraid to spend their retirement money because they’re afraid that they don’t have enough money saved up. And the survey from 2009 shocked me, retiree’s in their 80's hadn’t touched ¾ of their money yet. I agree with you, it’s important to spend the money wisely, but you can splurge a little if you have enough money saved up. Especially if you haven’t really touched your retirement account. And that is very true that some of that money might be very important for a large health concern, but if you start saving really early, then you should have enough money to splurge a little and still have enough money for all the necessary items for a happy and healthy retirement.
ReplyDeleteThis was a very thought provoking topic to think about as it is not typically on peoples minds. The concept of retirement so far fetched, it would seem unnecessary to think about. Although, this blog showed the importance of saving and spending, I think that adding more facts and the psychology of why retirees don't spend and live a more frugal life style would have been more beneficial to this blog post.
ReplyDelete