How to Spend Without Fear in Retirement

“I want to … be comfortable about what we are spending and know that at the rate at which we live, nothing’s going to run out. That’s the greatest fear.”

That’s Andrew McCoig, a retired pharmacist and our client. And he’s right of course. Who doesn’t worry about depleting their pot in retirement?

Small wonder one survey says 67% of people worry more about running out of money than dying.

That’s because you save all your life and then, suddenly it seems, you switch to spending. It’s a psychological shift with few equals. It can be daunting. It can overwhelm. Extreme cases are called chrometophobia: anxiety about spending money.

For most of us, it’s something we can overcome. We just need the right mindset, the right plan and the right support.

Changing one’s attitude to something is rarely easy. When we see clients manage retirement successfully, we observe three things. The first is they think of money with a newly contrasting purpose: it funds their lifestyle and gives them more meaning. It no longer sits there, brooding, waiting for its moment.

Secondly, they think of spending as a wise thing – not a wasteful one. After all, they’re now using their money for the very purpose they always intended it for. Their money now has intent. So has yours.

And then, third, they ease themselves into spending. They start gradually, feel their way, get comfortable and then get confident. We’ve all heard stories of retirement splurges and – at least to our mind – they rarely end well. When clients absolutely nail this big change, it’s because they’ve changed their expenditure incrementally.

Change is always easier with the right plan in place.

After all, that’s why we sit down with you on day one, work out what you want to achieve and identify how you’ll get there.

History is littered with badly thought-out plans. Some are called the ‘Cobra Effect’ (from when, allegedly, British rulers in India tried to stamp out deadly cobra snakes by offering a bounty for them … which created a cobra epidemic as locals started breeding them for the income!)

No cobra in our plan for you. There’s just a target number to hit, plus buffers to help you weather financial storms. Hopefully you already know how valuable a financial plan can be but, if you want to delve deeper, here’s something we wrote a while back.

You’re likely to stick to a plan with the right support in place.

Independent research says advised clients can be £48,000 better off, on average. But it’s about more than money. And it’s about more than financial planning. You can also get financial coaching – which tailors support to your personality. You can get tax planning and retirement planning. We can talk to you about your financial wellbeing. We can even help you with your goals beyond money.

That’s because making the change from spending to saving is ultimately about your welfare: emotional and financial. The better you can make this transition, the more confident you’ll be and the more you’ll enjoy the retirement you’ve so evidently earned.

Give us a call on 020 7467 2700 or email us hello@firstwealth.co.uk. We want to hear what you’re worried about – and then do our utmost to put you at ease.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.