Hello, A couple of years ago a video went viral of a preacher releasing a dove at a funeral. The preacher held a dove in his hands as he gave his eulogy, and when it came time to release the dove, he threw it into the air, but it fell to the ground a few feet away. He had squeezed the dove to death. The mourners were clearly in shock as nobody expected the dove to plop on the ground. Here’s the video. Ansley kept running off with our phones, so she got her a phone this week. She's thrilled about it.

Something else many people squeeze is money. When we get to retirement and we’ve saved, saved and saved some more for retirement it can be challenging to spend those saved dollars. For years there was a one-way street into your retirement accounts, and suddenly there’s a two-way street and money can be withdrawn to supplement Social Security. Maybe it’s different for you. Maybe you’re like our five-year-old Amelia. She loves to do art like her mom. The problem with art is when you create masterpieces you want to save them. She’ll review her old creations and talk about them. Sometimes the feeling of saving money is more satisfying than spending it. Apparently, you get to dress up as special character in K-5. I don't remember that opportunity when I was in K-5... Amelia is going as a fairy.

With our 3 Roles of Money process, we always illustrate a spending idea so that our folks feel empowered to enjoy what they’ve worked hard for over the years. Morningstar recently published an article titled, “Will You Need Permission to Spend in Retirement?” From the article, “It’s possible that some of that underspending isn’t problematic, especially if retirees are satisfied with their standard of living and/or aim to leave substantial assets for children and grandchildren. But for retirees without a strong bequest motive who might like to make lifetime gifts or spend more in order to maximize their enjoyment and quality of life, dying with a big pot of money isn’t a great outcome.” Ansley loves the sun!

Obviously, if we have not been able to adequately save for retirement, running out of money may be a real possibility. From the article, “It’s only natural for people in that situation to take great care to ensure that they don’t prematurely exhaust their savings. But I suspect that many readers face a different sort of problem. Their savings can comfortably replace their working incomes with little risk of running out over their lifetimes, but they spend less than they could spend, often much less. Indeed, researchers have identified a ‘retirement consumption gap’ that’s particularly prevalent among retirees with higher levels of wealth.”

The article suggests five solutions, the first being to use an annuity to create a certain income stream every month. The second is to create a portfolio that’s geared specifically to produce income. This may be weighed heavily towards bonds. The third solution is to base withdrawals on the performance of your accounts. And the next is to consider that retirement spending is like a bell curve in retirement. Spending is higher early in retirement for many people and trends down except for medical expenses. So, you may not always spend as much as you spend early on because there are only so many aspirational things a person feels like doing. The final solution is to rely on an advisor to create income for you.   While all of these solutions have merit, I think the best solution is determined by first determining what your priorities are. Think about what an ideal day, month and year may look like in retirement, then use elements of several of the solutions outlined above to help you create your proper distribution plan.   Oftentimes, I find talking through an issue to be helpful. Sometimes when our ideas are only in our heads they sound different than when we say them out loud. I encourage you to speak to someone about your plans and determine an appropriate path. Don’t leave it to guesswork. Until next week, David C. Treece, Financial Planner PS: Have you ever wanted to learn all about Medicare? On October 12th at 6:30 you'll have your opportunity to discover all your options at our complimentary workshop at Wofford College. Reply to this message to register.

Did you miss one of our last newsletters? What Are They Thinking: Click here How Tough Are You? Click here Three Strikes and You're... Click here

Clients Excel, LLC is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified tax professional for guidance before making any purchasing decisions. Clients Excel, LLC is not affiliated with or endorsed by the U.S. Government or any governmental agency. Clients Excel, LLC has a strategic partnership with tax professionals and attorneys who can provide tax and/or legal advice.