This is a super good conversation. I have a civilian TSP, retired military and waiting on SS. I understand how hard it is to spend after so many years of saving 25%
Michelle, great comments about annuities. I was a CFO who liquidated a pension plan for our employees offering a lump sum option to either roll to a 401k, take the cash or take the annuity. Those who could manage their investments rolled the funds to the 401k, those who wanted the comfort of knowing they had a fixed income option took the annuity. Both were good choices for those individuals. The third alternative was to take the lump sum, pay the tax and spend it and unfortunately, about 20% chose that option.
Hello Ms. Benz I have followed your Morningstar podcast for years and I think you are awesome. As a matter of fact I just purchased your new book 'How to Retire'. I plan on starting to read it tomorrow. I must say I was very disappointed with this podcast. I am 72 and I am the classic case of being a great saver for many years and I am currently having a battle in making the mental switch to spending instead of saving. I was all ready to listen to this podcast to get some much needed direction on how to make the switch to joyfully spending. When you asked your guess to direct your listeners on how to mentally make the switch to spending she never answered the question. It was so frustrating anticipating an answer from Ms. Singletary when all she did was dodge the question and talk about her and her husbands personal finances. If she had any idea of this question you would ask her she should have been more prepared. Again I will say she spent too much time talking about her and her husband's 4 sources of income etc. instead of dealing with answering your questions. I hope I get some help in my mental need to switch from being a saver to being a spender to enjoy the remaining years of life I have here on earth by reading your book.
Just a suggestion: Could you interview a guest who had an actual problem with this saving to spending transition and what psychological techniques they used to combat this anxiety? Or interview someone who has advised several retirees and what he/she found helps. I'm talking about from mental outlook options, not financial options.
I wanted to wait until 70 to start receiving Social Security payments. Unfortunately, my sources of contracts and income began drying up (I was self-employed). The result was like being slowly laid off. I used some of my backup savings to get through, but I had to begin taking Social Security at 68 to meet my obligations.. This gave me the target monthly amount I had been aiming for. I think the worst reason to take Social Security at 62 is because you're just tired of working. If you've made it that far, you can make it until full retirement age. Thank you for this informative video! I've been retired for some time now, and I'm losing the fear of spending.
Best video I’ve watched in a long time and the first time I’ve heard someone acknowledge the fact that potentially taking SS before FRA might not be the worst financial decision one might make 👍🏼
People have trouble spending because they don't want to run out of money. They understand once the money goes out there is no replacement or recovery. So they really need more income to cover their living expenses so they don't need to diminish their savings. The notion of spending on things that are not really necessary is out of the question. You don't need a psychiatrist. You need to exercise common sense and restraint. Don't listen to these "advisors." They are not retired. They have no idea what it means to stop working and to live on a fixed income. Never stop earning, growing and expanding. Keep making money. Retirement is largely a myth. These planners and advisors want you to fall for the notion of retiring to a life of care free leisure. Life doesn't work that way. Inflation is destroying everyone's wealth. You must account for it. These are the cold hard facts of life. None of these planners account for inflation or taxes. Sometimes, like now, there are decades where the spending power of your money gets cut in half. It's happening right now. Very few people can afford to retire. Most are working at least part time.
This lady has two pensions and two social security cheques. She is still working and the retired husband has a part time job. Despite this, she is anxious regarding spending. She is not the right person to guide those who may have no pensions who still intend to be successful with the challenge ahead. There are people who can speak to this challenge more effectively.
This may sound crazy..but the way I view my 401/457/IRA holdings, is as a "pension failure backup-fund". I survive just fine, on my pension, alone; but WHO KNOWS, what the future holds, with it. Even when I'm forced into RMDs, as long as my pension hasn't "gone south" by then; I will simply re-invest the RMDs in similar fashion, in taxable accounts. Paranoid? You're DAMN RIGHT, I am! As the world becomes crazier and crazier, with every passing year! Not to mention..I think a lot of it comes from growing-up DIRT-POOR, as Michelle also said she did..I GET IT!
I’d like to hear more conversations regarding the transition from saving to spending, but this interview didn’t help much since the interviewee obviously wasn’t struggling too much with 2 social security and 2 pension checks every month. Most of us don’t have that luxury and still need to go through that transition with less room for error.
If you have a real plan and are executing it, you are spending. Simply write the fun things and entertainment into the budget. You shouldn't do anything blindly.
Great episode Christine. Very refreshing to hear your story Michele. Very enjoyable. Perhaps, if you don’t already, you should have a RUclips channel or a podcast yourself. I will subscribe. Maybe a husband and wife viewpoint channel.
Very few retirees have anything more than Social Sec in the way of fixed income. Fortunately, I will have a small pension, although it will barely cover 10% of my expenses. I'm in great health so I plan to delay Soc Sec until 70 to maximize that payment. I expect to have a long active retirement so I will definitely appreciate having that larger benefit into my 90s and beyond. As far as spending goes, I'm sure it will be a bit challenging to make the switch, bit I'm still about 8 years away from retiring, so I still have plenty of time to work on my spending plan.
It's fairly useless for me to listen to folks who have multiple pensions. People who are at the tail end of the boom or Gen X are not likely to have a pension, good health care options, etc. that come with being a federal gov't employee or spouse. Basically, they can have a good living off their pensions, social security, and even a small TSP. I have basically only what I have saved.
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Loved this interview with Michelle, especially her remarks about dispelling saving / spending conflict between partners.
This is a super good conversation. I have a civilian TSP, retired military and waiting on SS. I understand how hard it is to spend after so many years of saving 25%
The last part about speaking with your partner about finances was a valuable takeaway. Very true
One of my favorite columnists in the Washington Post. She is truly the voice of reason.
Michelle, great comments about annuities. I was a CFO who liquidated a pension plan for our employees offering a lump sum option to either roll to a 401k, take the cash or take the annuity. Those who could manage their investments rolled the funds to the 401k, those who wanted the comfort of knowing they had a fixed income option took the annuity. Both were good choices for those individuals. The third alternative was to take the lump sum, pay the tax and spend it and unfortunately, about 20% chose that option.
Great discussion. We are less than a year out from retirement and struggling a bit with our post retirement spending plan.
That was a awesome interview. So many important topics discussed in those few minutes.
Always great guests and great advice!
I am with Michelle. My husband and I both have pensions and social security with survivor benefits. No need for an annuity.
Hello Ms. Benz I have followed your Morningstar podcast for years and I think you are awesome. As a matter of fact I just purchased your new book 'How to Retire'. I plan on starting to read it tomorrow. I must say I was very disappointed with this podcast. I am 72 and I am the classic case of being a great saver for many years and I am currently having a battle in making the mental switch to spending instead of saving. I was all ready to listen to this podcast to get some much needed direction on how to make the switch to joyfully spending. When you asked your guess to direct your listeners on how to mentally make the switch to spending she never answered the question. It was so frustrating anticipating an answer from Ms. Singletary when all she did was dodge the question and talk about her and her husbands personal finances. If she had any idea of this question you would ask her she should have been more prepared. Again I will say she spent too much time talking about her and her husband's 4 sources of income etc. instead of dealing with answering your questions. I hope I get some help in my mental need to switch from being a saver to being a spender to enjoy the remaining years of life I have here on earth by reading your book.
Just a suggestion: Could you interview a guest who had an actual problem with this saving to spending transition and what psychological techniques they used to combat this anxiety? Or interview someone who has advised several retirees and what he/she found helps. I'm talking about from mental outlook options, not financial options.
I wanted to wait until 70 to start receiving Social Security payments. Unfortunately, my sources of contracts and income began drying up (I was self-employed). The result was like being slowly laid off.
I used some of my backup savings to get through, but I had to begin taking Social Security at 68 to meet my obligations.. This gave me the target monthly amount I had been aiming for.
I think the worst reason to take Social Security at 62 is because you're just tired of working. If you've made it that far, you can make it until full retirement age.
Thank you for this informative video! I've been retired for some time now, and I'm losing the fear of spending.
Excellent!
Best video I’ve watched in a long time and the first time I’ve heard someone acknowledge the fact that potentially taking SS before FRA might not be the worst financial decision one might make 👍🏼
People have trouble spending because they don't want to run out of money. They understand once the money goes out there is no replacement or recovery. So they really need more income to cover their living expenses so they don't need to diminish their savings. The notion of spending on things that are not really necessary is out of the question. You don't need a psychiatrist. You need to exercise common sense and restraint. Don't listen to these "advisors." They are not retired. They have no idea what it means to stop working and to live on a fixed income. Never stop earning, growing and expanding. Keep making money. Retirement is largely a myth. These planners and advisors want you to fall for the notion of retiring to a life of care free leisure. Life doesn't work that way. Inflation is destroying everyone's wealth. You must account for it. These are the cold hard facts of life. None of these planners account for inflation or taxes. Sometimes, like now, there are decades where the spending power of your money gets cut in half. It's happening right now. Very few people can afford to retire. Most are working at least part time.
I just read this chapter in the book "How to Retire: 20 lessons for a happy, successful, and wealthy retirement" this morning.
This lady has two pensions and two social security cheques. She is still working and the retired husband has a part time job. Despite this, she is anxious regarding spending. She is not the right person to guide those who may have no pensions who still intend to be successful with the challenge ahead. There are people who can speak to this challenge more effectively.
But you didn't speak to "transitioning from saving to spending."
This may sound crazy..but the way I view my 401/457/IRA holdings, is as a "pension failure backup-fund". I survive just fine, on my pension, alone; but WHO KNOWS, what the future holds, with it. Even when I'm forced into RMDs, as long as my pension hasn't "gone south" by then; I will simply re-invest the RMDs in similar fashion, in taxable accounts. Paranoid? You're DAMN RIGHT, I am! As the world becomes crazier and crazier, with every passing year! Not to mention..I think a lot of it comes from growing-up DIRT-POOR, as Michelle also said she did..I GET IT!
Great discussion and informative points on retirement planning and mindset.
Agree with those who quite rightly point out that this guest was totally unable to answer the question of "transitioning from saving to spending.".
two lovely ladies ..thanks for such a positive interview.............love from Scotland xx
I’d like to hear more conversations regarding the transition from saving to spending, but this interview didn’t help much since the interviewee obviously wasn’t struggling too much with 2 social security and 2 pension checks every month. Most of us don’t have that luxury and still need to go through that transition with less room for error.
If you have a real plan and are executing it, you are spending. Simply write the fun things and entertainment into the budget. You shouldn't do anything blindly.
Great episode Christine. Very refreshing to hear your story Michele. Very enjoyable. Perhaps, if you don’t already, you should have a RUclips channel or a podcast yourself. I will subscribe. Maybe a husband and wife viewpoint channel.
Very few retirees have anything more than Social Sec in the way of fixed income. Fortunately, I will have a small pension, although it will barely cover 10% of my expenses. I'm in great health so I plan to delay Soc Sec until 70 to maximize that payment. I expect to have a long active retirement so I will definitely appreciate having that larger benefit into my 90s and beyond. As far as spending goes, I'm sure it will be a bit challenging to make the switch, bit I'm still about 8 years away from retiring, so I still have plenty of time to work on my spending plan.
I like dividends.
I’m retiring with a $750,000 nest egg and aim to make it last. Which investments would you recommend for steady growth and reliable income?
Question: what's the reason why Michelle will take the lump sum of her WaPo Pension instead of getting a monthly payment?
When to take SSA? Half of people die before getting to their life expected..
Say NO to annuities. Why pay someone else a fee to give you monthly payouts??
It's fairly useless for me to listen to folks who have multiple pensions. People who are at the tail end of the boom or Gen X are not likely to have a pension, good health care options, etc. that come with being a federal gov't employee or spouse. Basically, they can have a good living off their pensions, social security, and even a small TSP. I have basically only what I have saved.