Can I Afford To Spend More In Retirement?

 Date Recorded: 11/05/26

Savvy Women Wealth Management is an SEC Registered Investment Advisor

The opinions expressed in this program are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. It is only intended to provide education about the financial industry. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. Any past performance discussed during this program is no guarantee of future results. Any indices referenced for comparison are unmanaged and cannot be invested into directly. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

Transcript

00:00:01:25 – 00:00:24:03
Catherine Magaña
You’ve spent decades saving and now you’re retired. But you hesitate to book that trip. To do that kitchen major kitchen remodel, or even spend on something that you really want. So here you are. You’ve done a lot of hard work. You’ve saved. But now how do you know whether you can afford to spend more? So that shift from saving to spending can feel uncomfortable.

00:00:24:05 – 00:00:43:01
Catherine Magaña
And for many years, you’ve been saving and stocking money away. And now that you’re in retirement once again, you want to make sure that you have enough and that it will last. And so as retirement, as you’re in retirement, things can change. Come up with your life. So today we’re going to go over a few things that you know how the markets will react to your your retirement.

00:00:43:04 – 00:01:06:15
Catherine Magaña
What type of expenses that might come up in addition to your regular expenses. So there might be some health care or a big trip or some, family member that might need some extra money. And so while you may feel uncomfortable making those extra expenses with having a plan and knowing exactly how much you have and how this and how you might be able to do some extra things, it’s important to know whether you can afford to spend more.

00:01:06:17 – 00:01:28:01
Rachel Ivanovich
So let’s look at a common experience. You take a look at your accounts and you see money saved, but you still don’t feel sure if you can spend it or not. And that’s because the account balance that you’re looking at doesn’t tell you exactly how much you can spend and how long your retirement is going to last. Because think about it, people are living longer and longer and the market’s all over the place or up.

00:01:28:01 – 00:01:50:19
Rachel Ivanovich
It’s down and inflation. We all know about that and how expensive gas is and health care costs go up. And sometimes they’re just costs that you can’t plan for. So these are things, you know, reasonable things to consider. And it’s not signs that you’re doing something wrong. And honestly, if you had the habit your whole life to squirrel money away and save, save, save.

00:01:50:21 – 00:02:10:09
Rachel Ivanovich
It can be really hard to change that habit. And so you’re used to saying no to unnecessary purchases. So it’s really hard to give yourself permission to enjoy your money. So we want you to be comfortable spending and enjoying money. And the goal isn’t really to spend without thinking, but but look at. Okay. Let’s connect the dots.

00:02:10:12 – 00:02:23:22
Rachel Ivanovich
Let’s make a decision. Let’s have a plan. And look at look at income, look at savings, look at expected expenses and your priorities. And then start putting a plan in place so that you can actually enjoy your money.

00:02:23:24 – 00:02:40:12
Catherine Magaña
So before Deciding deciding whether or not to spend more, you should get a bigger a better picture of your current spending patterns. So I know we’ve talked about in this about this in the past. So it’s really looking at your life by design and how you’re really spending your money. So you can break it down into three components.

00:02:40:13 – 00:03:01:20
Catherine Magaña
You have your living, your lifestyle, and your luxury expenses. So your living expenses are your essentials. So you have your mortgage or housing, your food, utilities, insurance, taxes, health care kind of those. So I don’t know. But you know, they do fluctuate a little bit. But you kind of have your essentials like those living expenses. And then you have the lifestyle expenses.

00:03:01:20 – 00:03:27:22
Catherine Magaña
And this could include travel, dining out, some hobbies, entertainment, cable or shopping or just, you know, visiting grand grandkids or even some different memberships that you have. But then you also have your luxury expenses, and that can really be also tied into those one time expenses. There might be a family reunion, or there might be a you’re one time big European travel expense.

00:03:27:25 – 00:03:48:25
Catherine Magaña
So you really have to look at, okay, how am I spending, what are my essential spending and what’s my flexible spending? And then breaking it down to living lifestyle and luxury. And so once you have an idea of all these expenses, you don’t just stop there that you start thinking about, okay, what about the future? Are there any irregular expenses that I might need to consider?

00:03:48:27 – 00:04:06:29
Catherine Magaña
That might be maybe there’s a vehicle that needs to be replaced or repaired down the line. That might be a big trip that we talked about. Maybe that might be your luxury. Or there could be a wedding or, you know, something special that you’re not really accounting for. And it’s not an ongoing expense. It’s a more of a one time expense.

00:04:07:01 – 00:04:25:07
Catherine Magaña
So you can compare looking at your ongoing spending, and then you look at your income that’s coming in. So do you have Social Security? Do you have pensions. Do you have rental income? Do you have investment income? And so you look at all these different income sources and figure out, okay, do I have enough income coming in to cover my expenses?

00:04:25:07 – 00:04:35:14
Catherine Magaña
And then if there’s those additional expenses that you want to cover, where is that coming from? And so it is important to have a plan and to run some different scenarios to see what makes sense.

00:04:35:16 – 00:04:58:27
Rachel Ivanovich
And it’s also really important to look at the difference between a one time expense and then permanent increase in your spending. So think about it this way. Maybe there’s a special trip that you want to go on. So maybe you’re just estimating out what the cost is and you’re deciding when to go. And then you can plan and understand how this one time expense fits into your plan, and compare that to just increasing your travel budget year over year.

00:04:59:00 – 00:05:22:25
Rachel Ivanovich
So if you the first trip might be a one time cost, but if you have a higher annual travel budget and it becomes a recurring expense, then you’re going to need more retirement resources. So you you really need to plan ahead for that. And the same thing is true if, for instance, you decide, okay, maybe I want a second home or a more expensive lifestyle, the purchase price is only one part of the equation.

00:05:23:02 – 00:05:45:21
Rachel Ivanovich
Because think about it. If you buy a second home there property taxes, insurance, maintenance. What if you need big repairs? What if something big huge happens like the roof needs replacing? So it’s not just the the the purchase, it’s also the ongoing cost that you have to consider. And so one useful question that you can ask is if I needed to reduce this expense later, could I?

00:05:45:23 – 00:06:04:04
Rachel Ivanovich
Because a trip like a one time trip could be postponed. But if you make a lifestyle commitment, that’s much harder for you to unwind. And so before making the decision, make sure you’re looking at the full cost at a client, for instance, I thought it’d be really fun to have a vacation house on a lake, but it became very, very expensive for them.

00:06:04:06 – 00:06:15:22
Rachel Ivanovich
And so having to unwind that because they didn’t realize, you know, what, what the additional costs would be. And then not only that, but the travel cost, they had to take time off. And going there was just they didn’t really plan ahead for that.

00:06:15:22 – 00:06:27:23
Catherine Magaña
Well, it’s interesting you say that because we had some clients who were considering buying a vacation or a second home, and then after looking at everything and analyzing, they’re like, you know what? We can go travel for a month or two throughout the year to different places.

00:06:27:25 – 00:06:34:03
Rachel Ivanovich
That Airbnb or various other, you know, those vacation rentals are available. It makes a lot of sense to do it that way.

00:06:34:06 – 00:06:58:28
Catherine Magaña
So a retirement plan shouldn’t just be built on one perfect scenario. You really you have to look at if things change or shift. And once again, like you mentioned, inflation and things cost more. When we look at a financial, retirement plan, we do factor in inflation. So that is part of the equation. But once again, there was kind of one time bigger expenses do need to be considered.

00:06:59:01 – 00:07:16:21
Catherine Magaña
And so if you, feel confident with where you’re at with your finances, you like, I have enough and everything is great. You can actually do some kind of scenarios, or we can do add in some what if scenarios. If what if I went and did this big trip or what if I, you know, added every five years of, an extra amount of money that I needed?

00:07:16:24 – 00:07:32:03
Catherine Magaña
Or what if I needed more money for health care expenses later? So there’s different scenarios that can be run, just to make sure that your plan will last. I think the main thing we hear from a lot of clients is will my money lasts, and do I have enough? And for the most part, you know you can.

00:07:32:03 – 00:07:46:26
Catherine Magaña
And you just want to make sure that you’re mindful of, you know, how you’re spending. And, will the money last and what and do you want to leave money to as a legacy, or do you want to spend it all. And everybody’s that kind of at a different place in their lives of what their goals and goals are.

00:07:46:28 – 00:08:05:19
Catherine Magaña
And so the decision doesn’t mean it’s final. It’s ongoing. You have to be flexible. And that’s why we work with clients ongoing. It’s not just I do a plan and I’m done. It’s ongoing, having these conversations and looking at different scenarios. And occasionally that might be if the markets are fluctuating, which they do, it might be a year.

00:08:05:19 – 00:08:20:29
Catherine Magaña
We say, you know, this might not be the best year to go and maybe do it in a couple of years or next year. We have as a client we worked with, she, wanted to do this extra big trip, and we looked and it wasn’t the right time because some other things came up in the in her life.

00:08:20:29 – 00:08:28:15
Catherine Magaña
And so she’s still going to do it, but just not at this moment. So I think it’s just once again, being also flexible and having a clear picture.

00:08:28:17 – 00:08:57:09
Rachel Ivanovich
Okay. Yeah, I think that’s that’s really key because oftentimes experiences matter most when you have the health and energy to enjoy them. But so like you said, this year might not be the right year but maybe next year. But let’s consider hypothetical. So we actually have several clients that are like this. Let’s talk about, you know, there’s a retired woman, a client who loves to travel, and she’s saved enough to feel financially secure on paper, but she’s keeping her travel budget low because she’s really worried.

00:08:57:15 – 00:09:16:02
Rachel Ivanovich
Am I going to run out of money later? She’s considering a larger trip next year, and. But she also wonders, you know, do I have enough money to increase my travel budget year over year? So first of all, we would sit down and look at her current retirement plan and really say, okay, what is your usual lifestyle cost?

00:09:16:05 – 00:09:48:13
Rachel Ivanovich
Do you have enough income to cover those expenses? How much do your investments need to provide? And then once we’ve accounted for all that and for irregular costs and maybe rising health care costs and the retirement, then we can look at, okay, does it make sense? Can we do the larger trip, can we increase the travel budget. And I think it’s really important to be looking at all these different factors and just explore, you know, if the markets do, have a bad year, then does she have enough to really cover her base costs?

00:09:48:16 – 00:10:03:26
Rachel Ivanovich
Because like I said, if you want to have these experiences, you want to also have the health and, you know, feel it, feel good and feel good, not just physically but also mentally knowing, okay, I’m going to come back and I’m gonna have enough money to finance my life.

00:10:03:28 – 00:10:25:15
Catherine Magaña
So if you’re wondering whether you could afford to spend more in retirement, I would start with three steps. One is understand your current lifestyle costs. So, like we talked about looking at your living, your lifestyle and your luxury expenses, then evaluate the full cost of a purchase or something you’re considering or putting off and then look at.

00:10:25:15 – 00:10:48:13
Catherine Magaña
Also, you know, do you have some money preserved for flexibility for any big life changing events? And so if you kind of look at all of that and factor that in and then you should, and when you look at your plan and the different scenarios, then you should know, okay, I feel confident I do have enough. And it’s interesting as we’re talking about, that mindset of not having enough, we actually the other side of it, we do have some clients that have a lot of money and.

00:10:48:14 – 00:10:49:28
Rachel Ivanovich
They still have hard times, they.

00:10:49:28 – 00:11:02:22
Catherine Magaña
Have a hard time spending. And so there’s that other side of it is I’ve saved my whole life and I don’t know how to save the time and I don’t know how to spend. Yeah. And so that’s the other side of this is, you know, give yourself that grace to go ahead and spend and go ahead and enjoy your money.

00:11:02:22 – 00:11:23:10
Catherine Magaña
Enjoy. Yes. Enjoy the money that you’ve saved for for many years. And so we suggest perhaps maybe you take a moment, reflect, after today’s conversation, and maybe write down what experience or purchase you’ve been putting off and kind of evaluate the cost. And then once again, look at your overall financial plan to see how that fits in.

00:11:23:12 – 00:11:40:17
Catherine Magaña
We’re here to support you and guide you. If you would like a strategy, call with us. You can reach us at 760692 5700. And we want to thank you today for getting savvy with us about your finances. And remember to sabia.

00:11:40:19 – 00:12:00:29

Please stay tuned for important disclosures. The opinions expressed in this program are for general informational purposes only, and are not intended to provide specific advice or recommendations for any individual or any specific security. It is only intended to provide education about the financial industry, to determine which investments may be.

00:12:00:29 – 00:12:03:29
Catherine Magaña
Appropriate for you, consult your financial advisor prior.

00:12:03:29 – 00:12:28:01

To investing. Any past performance discussed during this program is no guarantee of future results, and the indices reference for comparison are unmanaged and cannot be invested into directly. As always, please remember investing involves risk and possible loss of principal capital. Please seek advice from a licensed, professional savvy woman. Wealth management is a registered investment advisor with the SEC.