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The Raffer Investment Group

It's Your Money, How You Spend It Is Up To You!

3 Types of Spenders in Retirement: Which are you?


There are three common manners in which people spend their money in retirement. On the surface it may seem simple, some spend it quicker than others. However, if you peel back the layers there’s usually a lot more below the surface, not to mention some useful strategies that can help you make the most of it.


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I was recently interviewed by a Morey Stettner at Investors Business Daily on this subject.  You can read the article by clicking the link below, but I wanted to take this opportunity to dive a little deeper.



The most conservative investors by their nature, live well below their means and are nervous about spending principal. Sometimes the motivation is to leave their children a sizeable inheritance, but this is rarely the primary driver. Often this group of people have had several life experiences that have influenced their current mindset.  For example, often watching parents struggle with money can be a contributor.  Sometimes its painful enough they they’re determined to ensure the same doesn’t happen to, sacrificing growth for safety.  Unfortunately, this often results in living a life that pales in comparison to what they could experience. 



This following statement describes the most common attitude towards retirement savings, “I want to maintain my current lifestyle and whatever is left over is left over”.

The average person just wants to continue to live like they always have.  It’s not that they’re selfish and don’t want to leave anything to their children.  In fact, most children are doing well enough that their parents funds aren’t needed.  People spend their lives working hard and deserve to spend their retirement responsibly enjoying the fruits of their labor.

Importantly, when building a retirement strategy, one needs to include a margin for error just in case people have unexpected expenses or the markets are particularly poor. Life is unpredictable so a well designed plan accounts for this. 



Lastly, we have the spenders. The topic of the aforementioned article. These select few want to spend more now and slide into home-plate so to speak saying, “whew what a ride.” This sentiment makes sense too, after all, when your health is good is the time to enjoy things.

Front loading your life experiences or have a smaller margin for error is doable too, but not without its risks. Major medical expenses and other unexpected costs can really derail the plan. The last thing anyone wants is to run out of money in their 80s. 

In these cases, one of the best things to do is eliminate debts and try and insulate yourself from any large potential cash requirements later on in life. Paying off a mortgage, eliminating credit card debt, and buying cars out right are some examples of  how to minimize liabilities.  Selling investment properties can also be a good idea because the last thing someone needs is to have to replace the roof or hot water heater on a rental property when they already have a low margin for surprises. Lastly, 70% of people over the age of 65 need long-term care in one form or another. Considering long-term care insurance is another effective strategy for trying to minimize surprises.

More information on Long-Term Care Insurance is available in the blog post I wrote on the subject linked below:

How To Protect Yourself From Unplanned Healthcare Costs



Everyone who is fortunate enough to save enough money to retire, is entitled to spend it how they see fit.  Whether you focus on making it last or maximizing your life experiences now, there are strategies you can employ to minimize surprises.  Consider who you are and whether or not this is something you should discuss with your advisor.


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Jeremy Raffer, MBA
Wealth Manager
Phone – 201-773-4641


Any opinions are those of Jeremy Raffer and not necessarily those of RJFS or Raymond James. Expressions of opinion are as of this date and  are subject to change without notice. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. All hypothetical examples are for illustrative purposes only. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation.