They say you can’t have your cake and eat it, too. Once you eat the cake, the cake is gone. No surprise, right?
The same thing might be said of your retirement fund. It is there for you to spend as you see fit—but once you spend it, it is gone.
How quickly you go through your retirement savings is a much bigger decision than how quickly you go through a cake. No one can tell you what the right answer is. Your retirement lifestyle might look very different from your neighbor’s retirement lifestyle.
Some people hope to leave as much possible in their estate to provide a legacy for children and grandchildren. Others plan on spending as much as possible to enjoy the fruits of their own labors.
Some people might plan to save the lion’s share of their savings to offset the healthcare costs they anticipate in their later years. Others plan to spend a big chunk up front, while they still have the good health to enjoy some options.
None of these plans are inherently superior to any of the others. It is your money, after all. For many of you, retirement savings are the sum of an entire lifetime of work, and you alone get to decide how to direct them.
What’s our wish for you? That you navigate these choices with your eyes open to the consequences.
So here’s one important difference between your retirement savings and a cake: when you set aside a certain amount of cake for later, you will have exactly that much cake in the future: no more, no less. When you invest your nest egg, over time it may generate extra income and potentially appreciate in value, giving you more to spend in the future.
There are no guarantees, of course. Depending on how aggressively you invest, you risk losing some of your value. This is just another tradeoff you need to weigh in planning your retirement.
When we make our retirement choices carefully, the consequences are never a surprise. You can have your cake. You can eat your cake. Your call.
Clients, when you have questions about this or anything else, please call or email. Let’s talk.
Want content like this in your inbox each week? Leave your email here.