This episode will detail how we help clients understand when they can SPEND MORE in retirement.

• Retirement is all about matching how much you would like to spend, with how many years you expect to live, with how large a portfolio you will need to support that spending.
• The permission to spend problem arises bc of the amount of uncertainty around this spiraling formula. And what ends up happening is without a good grasp of how to measure risk and likelihoods of success, we tend to default to being OVERLY CONSERVATIVE, thus the permission to spend problem.
• Why You Should Care About the problem
  • The goal of saving all those years is to maximize your satisfaction later in life - to rely less on work and more on savings to support the activities you want in life.
  • Shift retirement from fear to fun
• What contributes to the problem
  • Psychology
    • The fear of running out of money
    • The “paralysis” that comes from having too many things to consider but no great way to prioritize them
  • Terrible “one size fits all” information
    • The 4% rule
    • ROTH conversions for everyone!
    • Social Security at age 70 is ALWAYS the best!
    • ACA subsidies because it’s free money!
    • Taxes are ALWAYS bad
• How to solve the permission to spend problem
  • Proper financial planning and education
  • The educational process of building a plan (with the right guidance) hypertrophy your “distribution” or “pay yourself” muscle
  • The educational process of building the plan and reviewing scenarios will help you appropriately determine if and which of the “one size fits all” information ACTUALLY applies to you.
  • The if-than, or contingency plans will help remove the decision making friction
  • The plan itself will help you prioritize the never ending set of action items or optimizations that can be done.
  • Documenting and reviewing the plan regularly with a set cadence that you commit to (not too frequently, not too infrequently) will help prevent you from making impulsive (fear based) decisions and help you make decisive (confidence based) decisions.

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Eric Amzalag, CFP®, RICP®

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