Several of your clients likely have told you about their dreams for retirement: a luxury vacation with their adult children and grandchildren; photography classes and special equipment they’d like to upgrade; or a new swimming pool with professional landscaping to create a true backyard retreat. Of course, each of these dreams carries a hefty price tag. While some people can easily afford to cut a check, some feel guilty or selfish about spending the money. It can feel wasteful, and they fear such a large expense means they’ll need to sacrifice down the road. So how do you know if it’s OK to create your grand experiences? One advisor shares her thoughts.
- Create a budget. Retired couples must know how much money they’ll need over the next 20 to 30 years. If there is any extra money, these leftover funds can be used for their fun times.
- Allot plenty of time to pay for your big expense. For those people still working and saving for retirement, consider how much these “experience” expenses will set you back. Perhaps it’s a matter of saving just a little more of an annual bonus each year to allow you to take those grand vacations every two or three years.
- Pay for your experiences with cash.Try hard to minimize borrowing and taking on new debt. The last outcome anyone wants is for these wonderful memories to create stress and derail any long-term financial plans.
If your clients haven’t shared their goals with you, ask them. Work with them so that they are not content to just “survive” during retirement, but to create memborable experiences for themselves and loved ones (with a reasonable budget and time frame to pay for it).
You can find the whole article at Kiplinger.com.