The Money Cushion by Bill Storie
I enjoyed the article written a couple of days ago by my colleague and Olderhood co-Founder, Robin Trimingham called “What’s your Fallback Plan?”
One sentence in particular, caught my closest attention. She said, “The truth is, I don’t know anyone who doesn’t have money concerns both now, and more importantly, for the future.” She’s right.
In almost every conversation I have with those approaching retirement, or even more so those already in retirement, the issue of money invariably pops up. For some, it is a pressing issue while for others, it’s not as critical, but there are few people, regardless of financial condition, who ignore their money matters.
Strangely though, I do have one friend who has no idea what is in his bank account and he has no idea how much he spends. Yes, he is aware of his costs of groceries and utilities etc., but when it comes to travel for example he just goes and spends on his credit card then comes back home with the hope that he made it through before the card company declined his card. I suppose he could be telling me a load of nonsense and in fact, perhaps he lies awake at night thinking about his money. It may just be a bravado approach.
However, it did make me wonder if the word “Fallback” applies to this man, and probably many others. In other words, if the word “Fallback” means that in the event of some financial event, probably unexpected, there will be some safety net to catch them when they “fall back”. But if there is no such net then the outcome could be traumatic. But surely there should always be a need to know that your safety net is both in existence and is adequate. I don’t understand why anyone would disregard their financial situation on a regular basis.
As we get older, there are always events which cause money to be spent which perhaps had not been included in the pre-retirement projections. That’s just a fact of life, and in all probability, there’s not much that can be done to avoid it. Therefore, the matter is one of resolution, not prevention.
Unexpected repairs to the house, carpets needing cleaned, repairs to the car, financial assistance to a family member, and of course, at the more personal level, some medical issue to be paid for, otherwise not covered by health insurance. So, it is difficult to predict what events will occur and even more difficult to predict how much they will cost.
So, the questions to be asked are whether you have a safety net, whether you monitor it, and whether it is sufficient?
Of course, we all want more money, who doesn’t? But if we have enough to enjoy the retirement life we want, then is money realistically a huge concern in our golden years? The only issue therefore would be whether we intend to leave money to the family, and if we do, do we have enough to sustain our own lifestyle and not deny ourselves some of the finer things in life, far less the basic things in life?
On the other hand, if we have decided not to leave an inheritance to the family, should we just go ahead and “blow the lot” while we still have the energy?
That is indeed a temptation, and within reason, a fair and understandable position, but the only flaw is knowing how long you will live. Will you run out of years before you run out of money or vice versa?
In any event, though, the money part of our lives is important. It allows us to decide what we want to do in retirement. If we have enough money to do exactly as we please then we’re in good shape. Yet if money is restricting our lifestyle then we have no alternative but to adjust our lifestyle accordingly. Thankfully as we age, the obsession to be involved in energetic pursuits typically subsides.
But, to those who simply want to be free and enjoy themselves regardless of their financial capability then who am I to suggest they should do otherwise? Maybe they are living the lives we all would like and if so, I say good luck to them.
By Bill Storie