Read the original article on Kiplinger’s here: https://www.kiplinger.com/retirement/retirement-planning/are-you-a-retirement-millionaire-too-scared-to-spend
Is it possible to be too frugal in retirement? After spending a lifetime saving, are retirees too reluctant to spend the money they’ve accumulated?
According to Fidelity Investments, the number of baby boomer 401(k) millionaires among us is growing. By the end of 2024, they found that a full 41% of baby boomers had $1 million or more in their retirement accounts, while Generation X—or those between age 45 and 60—accounted for 57% of all 401(k) millionaires.
Eric Herzog was asked to weigh in on the topic, and he was featured in the article, “Are You a Retirement Millionaire Who Is Too Scared to Spend?”
Excerpt from the article:
“The fear of running out of money can be paralyzing, especially when the stock market goes south. To overcome those concerns, Eric Herzog, CFP®, a CERTIFIED FINANCIAL PLANNER™ and financial advisor at Prime Capital Financial in Fargo, North Dakota, says it’s important for people to look at retirement as climbing a mountain.
You invest money, your account grows while you’re working, you get to the very top where you have enough money to retire and then it’s time to start spending the assets and go down the mountain.
While the trek down can be challenging, he says showing clients it’s OK gives them permission to spend.
“We do a lot of educating on the front end to help them understand the probability of the financial plan working out and what the success rate looks like,” says Herzog. “The best advice I give them is to be clear about the amount of money they are willing to draw down and to identify the amount of money they want to leave to family, charity or whoever it may be at death.”
It may be uncomfortable to think about, but Herzog says it gives a lot of people peace of mind to spend what’s left over on living the lifestyle they envisioned in retirement.”
This article is not to be construed as financial advice. It is provided for informational purposes only and it should not be relied upon. It is recommended that you check with your financial advisor, tax professional and legal professionals when making any investment or any change to your retirement plan. Your investments, insurance and savings vehicles should match your risk tolerance and be suitable as well as what’s best for your personal financial situation.
