Plan your wealth. Enjoy your life!
One of the most common conversations I have with retired clients isn’t about whether they have enough money. It’s about whether they feel comfortable enjoying it.
After years – often decades – of working hard, saving diligently and living within their means, many people find it surprisingly difficult to make the transition from saving to spending. The fear of running out of money means they continue to live as though every pound must be preserved.
Ironically, for many people, the opposite is true.
So, how do you move from a saving mindset to a spending mindset?
Psychology
Why is it so difficult to switch from saving to spending? For many people, uncertainty is the real issue. Even if they have accumulated significant wealth, they don’t know what level of spending is sustainable. Without confidence in a long-term financial plan it’s natural to err on the side of caution. The numbers on a page don’t mean anything to you if you have a visual learning style, that’s why we have been using great cash flow planning software for years now. This helps our clients “see” where they are headed.
Confidence
It’s hard to change the habits of a lifetime and decades of saving create habits that don’t disappear at retirement. During our working lives we’re conditioned to spend our monthly salary rather than our total bank balance. Retirement can feel uncomfortable because that salary disappears. One technique I often use is to help clients think of their retirement income as paying themselves a monthly salary from the wealth they’ve spent years building. The difference is that this salary is supported by a carefully constructed financial plan.
Sustainable spending
Sustainable decumulation simply means drawing an income at a level that allows you to enjoy your lifestyle while maintaining a high probability that your assets will last throughout retirement. It’s not about never touching your capital. In fact, for many retirees, using some capital alongside investment growth is exactly what the plan is designed to do. For some families there can also be a tax benefit. If your estate is likely to be subject to inheritance tax, spending or gifting strategically during your lifetime may reduce the amount eventually lost to tax. Tax shouldn’t be the primary motivation, but it’s often far more rewarding to see your wealth improving your family’s lives than increasing a future tax bill.
Spending changes over time
You’ve probably heard of the “go-go”, “slow-go” and “no-go” years? This is definitely a real thing in our experience. If travel is a priority, it might be a good idea to plan some nice holiday spending in the early years of retirement whilst you are fit and well. None of us know how our health/mobility will pan out and if your plan says “yes” then why not make those memories? Spending typically reduces “mid-retirement” then can potentially increase if additional care is needed in later life. All of this can be factored in to your plans.
Why retirement planning isn’t a one-off exercise
Retirement could last 30 years. Investment markets change. Inflation changes. Tax rules change. Your health changes. Your spending priorities change.
That’s why retirement income shouldn’t be set once and forgotten. A good financial planner continually reviews whether your spending remains sustainable and helps you make small adjustments over time. Sometimes that means giving yourself permission to spend more. Occasionally it may mean exercising a little restraint. Either way, the decisions are based on evidence rather than emotion.
Financial planning isn’t about accumulating the largest investment portfolio or leaving the biggest estate. It’s about using your wealth to support the life you want to live.
A robust financial plan gives you confidence that you can enjoy today without compromising tomorrow. Regular reviews help ensure your spending remains sustainable as markets, legislation and life itself evolve.
Ultimately, good financial planning doesn’t just answer the question, “Will I have enough?” It answers the far more important one: “Can I afford to enjoy it?”
Ready to start enjoying the wealth you’ve worked hard to build?
If you’re approaching retirement or are already retired and wondering whether you can afford to spend more, we’d be happy to help. At Robson Laidler Wealth, we use cash flow planning to give you a clear picture of your financial future, helping you make informed decisions with confidence rather than guesswork.
Whether you’re planning your retirement income, thinking about gifting to family, or simply looking for reassurance that your spending is sustainable, our experienced financial planners are here to guide you.
Get in touch today to arrange a conversation and discover how a personalised financial plan can help you enjoy your wealth with confidence. Email us at: WealthTeam@robson-laidler.co.uk
This article is for general information only and does not constitute advice. Please do not take or refrain from action based on its contents. Information is based on our understanding of legislation at the date of publish and may change in future.
Robson Laidler Wealth is a trading style of Robson Laidler Financial Planning Limited, a company registered in England no. 5395046. Robson Laidler Wealth is authorised and regulated by the Financial Conduct Authority no. 458879. The Financial Conduct Authority does not regulate some tax advice or estate planning. The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren’t able to resolve themselves. To contact the Financial Ombudsman Service please visit www.financial-ombudsman.org.uk.