Should you Keep or Spend Your Money When You Retire?

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If you’ve spent your life working hard, saving, investing in a pension and trying to get the best return for your money, you may now have a sizeable nest egg. If you have your daily living expenses covered, and a reasonable amount of disposable income to play with, you might be wondering whether you should keep it safely invested, or blow it all on the adventure of a lifetime. How do you decide what’s best for you and your future happiness?

Two schools of thought

Your decision will depend very much on your mindset. If you instinctively feel you need the security of having some capital to fall back on, you aren’t going to be very comfortable using your money and being left without that security. On the other hand, if you feel you want to make the most of your time and do all the things you could never do before, you may be thinking it’s time to seize the opportunity and fulfill some of your dreams while you still can. There is, however, a third option that lies somewhere between the two, and that is to preserve what capital you need to cover any likely expenditure and use the remainder to indulge yourself and enjoy the rewards for your lifetime of work.

Making the right choice

The first step is to look at what you have in terms of ready cash and accessible investments. If you have a number of different incomes and savings, you will probably benefit from talking with an independent financial advisor. They will be able to analyze which sources of income are worth utilizing, and which you would be better off keeping. Then you need to think about how much you require to cover your future needs. One consideration is the cost of your funeral, which can be quite expensive, depending on your wishes. If you don’t want to leave this expense for your family to bear, consider taking out special seniors insurance with a reputable company like LifeNet Insurance Solutions.

Futureproofing

It’s hard to know for sure what might lie ahead. You could live out your life at home, healthy and independent to the last, or you might be unfortunate enough to suffer ill-health that requires you to move into a nursing home. The decision you have to make when calculating how much you should set aside is how likely any of these eventualities are, and how you would cope if you were faced with care costs in later life. If you have a property that could be sold to pay for care fees, that may be your answer. You can assess your current health and look at how healthy your parents were in later life, which could give you an indication of what is likely to happen in your future.

Remember, this is your money, and you should feel free to use it however you choose. If you have no desires beyond providing an inheritance for your family, as long as that is what will make you happiest that’s what you should do. On the other hand, if you have always dreamed of taking a world cruise, providing you have sufficient funds then go for it; just be sure you are doing this for yourself and not to please anyone else.

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