When Is It Time to Let Go?

By Karen Caplan Altfest

For many people, retirement is their ultimate life goal. To achieve their desired retirement lifestyle, habitual saving — beginning early and compounding regularly — is important. As financial advisors, we strive to teach our clients that lesson well. We also have told them in which tax-advantaged vehicles they should save. But we often don’t let people know that at certain times in their lives, it’s appropriate to let go, to begin to use the money they diligently put away for decades. I think some are waiting for a sign: “Now it is all right to spend,” or “You will be OK if you spend on your medical needs, your retirement costs, even sometimes on your loved ones!”

Rather than counseling clients on the freedom to spend as they age, we put a lot of time into thinking about whether retirees can safely withdraw either 3% or 4% from their portfolios in retirement.

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