The Surprisingly Hard Part of Retirement Nobody Warns You About

Most retirement conversations are about saving enough. Today we're talking about the other side of that. What happens when you've saved, you're there, and you still can't bring yourself to spend it? It's more common than people admit. And it can quietly rob you of the retirement you worked so hard to build.

Here’s what we discuss in today’s show:

💰 Spending Feels Wrong: Saving habits are hard to break
 🧠 Identity Shift: From earner to spender is uncomfortable
 ⚠️ Hidden Fears: Longevity, control, and guilt drive hesitation
 🗺️ Clear Roadmap: Planning creates confidence to spend
 📉 Phased Spending: Expenses often decline over time

Resources:

Website:  https://www.demarsfinancial.com/

Phone: (509) 536-9556

Schedule an introduction call with Taylor: https://bit.ly/demarspodcast

Check out Taylor's YouTube Channel: https://www.youtube.com/@TaylorMadeRetirement

Taylor's Newsletter: https://demars-financial-group.kit.com/827c64fe0e

Disclaimer: Since we don't know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Demars Financial Group, LLC or its members cannot be held liable for any use or misuse of this content. Advisory services offered through Demars Financial Group LLC, a Registered Investment Advisor. Demars Financial Group is not affiliated with LPL Financial.

Transcript

SPEAKER_02 0:01

Most retirement conversations are about how to save enough. But today we're going to talk about the opposite end of that. What happens when you've saved, you're there, and you still can't bring yourself to spend it. And it's more common than people usually admit, and can quietly rob you of the retirement you've worked so hard to build.

SPEAKER_00 0:19

Welcome to Tailor Made Retirement, where we explore what it takes to build a retirement that works for your money and your life. With third generation certified financial planner Taylor DeMars.

SPEAKER_01 0:35

Welcome in. Glad to have you on Taylor Made Retirement with Taylor DeMar's Certified Financial Planner, the Damars Financial Group. And today, Taylor, maybe someone uh listening might not expect their advisor to be telling them, hey, you need to spend money, but that's the discussion today, right? Because I think there's a huge mindset shift when you go from preparing for retirement and then moving into retirement that a lot of people just can't quite grasp.

SPEAKER_02 0:59

It's true. I think the whole most of the industry is geared towards that accumulation phase, which is growing, saving, living within your means, letting the portfolio compound. And, you know, for better or worse, people usually only make the transition to retirement once in their life. And so a lot of new questions come up that people haven't encountered when it comes to, okay, I'm going from saving to spending, it feels a little taboo.

SPEAKER_01 1:21

It does. And it's a pretty common feeling for people too, and which is why we wanted to kind of bring it to your attention today and discuss it a little bit. But let's just kind of start with why it happens, Taylor. What actually keeps people from wanting to spend? Is it is it strictly just because of the habits they built along the way?

SPEAKER_02 1:37

Yeah, it's a good question. I mean, again, you think about people spent growing their portfolio and working for 30 plus years, they've been rewarded all along for saying no to, you know, discretionary purchases, to buying a brand new car regularly. They're they've been in this mindset that says, hey, I'm trying to help, you know, shove away money and let it grow. And so they feel rewarded for that. And when they translate to seeing it go back down going down or spending down, it feels like they're losing, even when it's by design. And it even translates into their identity many times, I feel, for clients, because they were the responsible one in contrast to maybe their co-workers or family members or other people that they know to say, hey, I was the one that was able to retire earlier than them. And now it's against my identity to feel like I'm now going to do the opposite and spend it down sooner than everybody else. So it's this leap from going from paycheck to portfolio income is one of the hardest psychological shifts I see. And it's not necessarily the fear of running out of money, it's just running out of control. So that's where we put pen to paper to help clarify things. So if I were to boil it down, actually, I feel there are three key holdups that people have. And most people are just worried about whether they're gonna go broke before they croak. And they that heaven forbid, it's easy to say, hey, I've got enough, I've got millions of dollars saved up potentially for retirement in their late 50s, early 60s, but they don't know how long they're gonna live and they don't know how much that they're actually gonna be needing decades down the road. So that's something that people get a lot of uncertainty around. And the second thing is they feel that their income feels unearned, right? Whereas for many years they were going to work for 40 plus hours a week, but when you're taking withdrawals from your portfolio, it feels like the plan is your paycheck, and that doesn't feel as concrete as something as a W-2 income coming in every week. Which leads to the third holdup, which is largely their guilt, where they feel like, oh, am I taking from what should be uh there for my kids or my grandkids? Am I taking money for that that should be there for long-term care expenses down the road? Am I am I being too extravagant and trying to take the most advantage of my go-go years? And so that's that's really where we come in as trying to flip the script in our retirement readiness roadmap process is to understand, hey, if we lay out all your needs, wants, and wishes and make a plan for it from the onset, of course, with some conservative assumptions, here's some reasonable uh assumptions that we can make for how much you can spend sustainably even in your earliest years of retirement.

SPEAKER_01 4:02

Yeah, I can I can see that those are three uh kind of big feelings and psychologically that that you would have about you know spending money in retirement, which again is is why you plan, right? This is kind of why you move towards that written plan as you talk about. So for anyone that's in this boat and saying, Taylor, you know, I'm a little concerned uh about spending and I had that hesitation, I don't feel comfortable doing it. What can you do about that to kind of change the way you're you're you're approaching retirement?

SPEAKER_02 4:27

Well, I think the first thing is to learn from others. Um and I think that's a vantage point that I uniquely have because this is all I do is I help people talk about and plan for and implement retirement planning. And not just in this early phase that many people are probably listening uh right now as they're on the verge of retirement, but I've being a third generation financial planner here, I get to work with people who started with my grandpa, who started with my dad, and they're in their 70s, 80s, and even in their 90s for some clients. And I see so many times, hell, they may be some of the richest people in the nursing home or the richest people in the cemetery. And that's not necessarily my definition of success. And so it's hearing their experiences and seeing how they now are perhaps realizing that they could have spent more and even could spend more now, but either their mind and or body are just not giving them the oomph to go out and do the travels that they probably would in their 60s. So that's the first thing that I think I bring to the table for clients is remind them of what they probably see among some family members, is seeing those people that did underlive their retirement, underlive their potential. But as far as actually putting pen to paper, that's where we're making the the decisions in our planning process in order to be able to measure twice and cut once about what feels like a sustainable amount to spend. And one thing that we do do in order to translate that is actually implement a realistic spending timeline that fits the go-go slogo no-go years. Just like we talked about many clients in their 80s, 90s or in their no-go years. So if we make that core assumption that says, hey, perhaps you're gonna spend, call it$10,000,$12,000 a month on your, you know, regular expenses, often I plug into clients' plans to say, well, what if we assume that goes down by 15 or 20% in your mid-70s? And then again, by 20% in your mid-80s, that feels realistic. I mean, that$10,000 spending goes down to$8,000 spending in one's mid-70s. That that doesn't feel like that's telling people they, you know, they're we're pulling the rug out from underneath them. It's just what they're planning on doing, anyways. And when we are telling the the 30, 40 year plan we need less money in at least half of it, then that gives us real permission to be able to spend earlier on this front end. So that's just one of the many levers that we're able to pull in order to make sure that they feel confident about what we're doing and why.

SPEAKER_01 6:42

Yeah. And look, that planning can begin by doing the retirement readiness roadmap, right? You can click on the link in the description that we have here on the show, or you can actually visit demarsfinancial.com, click on the could we be a fit button and begin that that roadmap process. And look, that's again where the planning really takes over. Because I'm assuming once you lay that out, Taylor, you know, most people probably don't realize that spending is going to change over time. So it's probably natural to think if I'm spending this much in my first, you know, first few years doing everything, you know, extrapolate that out over the course of 20 or 30 years, it's going to be trouble. But when you actually lay it out on a plan and talk about, as you said, these different stages of your retirement, it starts providing a little more clarity.

SPEAKER_02 7:20

Certainly. Yeah. And just like we're planning a cross-country road trip from one end to the other, we can pretty we can make a pretty detailed plan to say, hey, here's exactly what we think we're going to spend for this phase of life and how much income is going to be from Social Security in this year, and how much we're going to convert for about IRA in this year, and so on. And that that that does give people some peace of mind to say, for better or worse, we can be pretty darn detailed about what we think the roadmap is going to look like. And we project it out against a comprehensive stress test. Many people call Monte Carlo analysis, where we're seeing in a thousand plus scenarios of the best of the best, the worst of the worst markets, how many of those scenarios does their plan hold up? And if it's dire enough, then okay, what decisions do we need do we need to make in order to make the plan work so we don't go broke before we croak? And it feels that that that that gives clarity to people, but it's not the final say by any means. Because as anybody knows who's made a cross-country trip, inevitably you're not going to follow those directions to a T, either because of traffic or uh weather or construction, right? There's going to be some detours and some nuances made along the way. And that's what keeps you on track. And in my opinion, that's what keeps people on track over a 30, 40-ish year horizon for retirement. So giving them the peace of mind of knowing that pulling the trigger now doesn't mean that they've they've locked themselves into a course that they can't change. In fact, I feel it's the opposite. Change needs to be uh anticipated in order to keep ourselves on track. So once they actually pull the trigger and I call it baby steps, they they actually are are they make the first excursion to whatever their bucket trip was, or they actually spend the first few months in retirement and they're spending down, say,$10,000,$12,000 a month, and they realize that they aren't destitute already, they start to get that little bit of baby step confidence to realize, okay, I am gonna be okay and we're gonna be able to make this one step at a time.

SPEAKER_01 9:10

Yeah, that's great. And again, that's why you have a plan in place, right? So you can understand that and not have that worry and anxiety, which is only natural in retirement. But I'm sure you come across uh someone before that has come into your office uh and really you felt probably that they they were underspending to their own detriment, probably. How do you handle a client that you come across and work with that that is in that position?

SPEAKER_02 9:32

I think the first thing is is we're trying to make sure that we have all the moving pieces in their plan. Uh last thing we want is garbage in, garbage out. So we do a uh a fairly comprehensive audit of all their moving pieces. You know, we're asking for for all their documents from tax returns to investment statements to insurance policies and as much as we can about their actual spending so that we can feel confident about creating that comfortable lifestyle they're used to. And I feel there's an interesting thing. I was working with a client couple, uh, he's an attorney out of Atlanta, and and he's the more financially savvy one, or it gets into the numbers. And he kept saying in our process, he feels like it was too good to be true, too good to be true. And so I kept on coming back to him and saying, Well, you sure you want to spend this much? Can we budget in a more conservative number? And after continually asking them what else are we missing here, it kind of hit us uh right in the face. We should have realized that one of the things that really helped their plan was the fact that they were planning on selling their home and their three rental properties, really all their real estate, and living full-time in an airstream. Super exciting. But what they hadn't built into their plan yet, and what I had to pull out of them and suggest is say, well, uh it sounds fantastic to be traveling in your 50s and your 60s, perhaps in an airstream, but eventually you do you want to put down roots? Do we want to, you know, buy a piece of property to call home base? And they said, Well, yeah, I guess we kind of assumed we would, but we hadn't put it into the plan. So we put in a specific number in a specific year at a in some point in the future, and that made the numbers feel that much more realistic. Whereas before they felt like, hey, this is this all sounds too good to be true. And being able to make sure that we're not ignoring or just taking for granted anything that might happen in the future, having all those ins and outs in the plan, I think gives people not only the confidence, but also the permission to spend because they feel like they have dedicated line items for things. Um, for example, I have a client couple who they just became grandparents to a daughter or granddaughter who lives out of state. And the the the wife of uh of my clients, she wants to be a full-time grandma. So we put in a line item that says, hey, you have uh of spending$3,500 every month indefinitely throughout retirement to go travel and stay at a nice Airbnb. And and so that doesn't become a discussion point of the day when dinner table of why are you spending that much again? And we can't do this to say, no, it is a separate line item on top of the vacation, the healthcare, the monthly spending to say you can spend this much because the plan supports it. And maybe you won't do it every month, but at least we can know that we're giving ourselves the permission. Does that make sense?

SPEAKER_01 12:03

Yeah. And that's what's great about planning, especially you know, planning that is customized to someone, right? Not just a you know, a one-size-fits-all plan. And and you can cut, you know, tailor that to hey, what are your goals? Do you want to be a full-time grandmother? Do you want to travel in an RV, whatever that is, you can build a plan that uh incorporates that spending. And so again, it's it's thinking about that, rethinking, you know, reframing your thinking and and having that conversation because a great financial plan is purpose is to both protect and to give you permission to spend and enjoy your life. That's the whole goal of working so hard. So talk about how your retirement readiness roadmap fits into this process, Taylor.

SPEAKER_02 12:38

Yeah, I'll just give a quick overview. I mean, we start with uh trying to open with the purpose. We open with a discovery session, then our planning process to help other clients open up about okay, what is an ideal retirement look like? And money aside, time aside, let's let's paint a picture. And then once we gather enough details about that, we're able to have those main, I call it a North Star of a plan to be able to know, okay, how does this affect our timing to Social Security, how our asset allocation or portfolio comes about, what is our tax plan, right? We don't want to let the tax tail wag the dogs. We want to make all of our major lifestyle decisions before talking about things like Roth conversions. And so this six meeting, three-month process that we do is the foundation for clients to feel that they've left no stone unturned. And if they want us to implement the plan and manage their investments, so be it. But if they want to do it on their own and take the plan and do that, then uh that's what we're built for as well. So, in a nutshell, I feel like what clients they they they owe it to themselves to have a I would feel a credible and trustworthy third party. I'm biased, but I feel we do that for clients, to be able to give them that that peace of mind of knowing that they are not being reckless or unsustainable with their spending. And uh they at least can, at a minimum, have someone else to blame if their spouse feels like something's going wrong, so they don't have it all on their own shoulders.

SPEAKER_01 13:53

That's great. Well, again, you can get that uh by clicking the link in the description or just visit demarsfinancial.com. You'll find that could we be a fit button. Click that and begin that process as well to take advantage of that retirement readiness roadmap. But that'll do it for us here on Taylor Made Retirement with Taylor Demars. We appreciate you listening as always. Encourage you to subscribe as well. Have another episode coming soon. So take care, Taylor. Have a great week.

SPEAKER_02 14:17

Awesome. Thanks, man. Take care.