Retirement can last for several decades, which means our retirement savings also need to last for several decades. Sometimes I feel that managing retirement savings is like running a marathon that takes resilience and endurance.
Long-distance running is different from sprinting, as it emphasises maintaining a steady pace and rhythm throughout the race. This is like managing retirement savings, with the goal being able to make the retirement savings last for as long as possible. As such, we need to control the pace of our spending to support our decades-long retirement life. While using up savings too quickly is a big problem, living frugally and sacrificing quality of life to make savings last longer is also not ideal.
Thinking like a marathon runner, we need to figure out the best way to live on our savings. Those who are not familiar with investing may choose to spend sparingly. With the emergence of retirement wealth management products such as annuities and reverse mortgages in recent years, retirees may also consider turning their assets, such as cash, properties, and life insurance policies, into long-term and steady monthly annuity incomes, creating lifelong retirement income.
Some people may think that they only need to consider their expenses when managing retirement savings. However, this is not a simple math question at all as unexpected events may occur at any time. During our retirement years, longevity, inflation, illness and frauds are some of such events to watch out for as they can disrupt our retirement plan.
19 April 2024
