AN ELDERLY couple has found a loophole in their bullet-proof retirement plans.
A personal finance expert has explained why saving too much might not benefit them in the long run.
CAN’T TAKE YOUR MONEY TO HEAVEN
Certified financial planner James Conole made a controversial discovery in an elderly couple’s plans for retirement: they were saving too much money.
The expert came with receipts on his YouTube channel to show why.
His clients Tim and Jennifer, both 60, said they wanted to retire in seven years.
Tim worked as a school teacher and made $76,000, and Jennifer, a human resources director, made $160,000.
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The couple was delighted that their personal finances and retirement investments put their plans at a 100% probability of success.
However, Conole said that’s not exactly a good thing.
Conole said the goal should not be a 100% probability of success regarding retirement planning.
“When you have a 100% probability of success, that’s essentially saying that no market environment, at least that we’re aware of historically speaking, could even potentially derail your ability to retire.”
In other words, he explained that means there’s a “huge amount of buffer or margin in your plan.”
Conole explained to his clients they were better off spending more money early on while it was still of value to them.
But it doesn’t mean they were wrong to err on the side of caution.
A whopping 42% of Americans report being “very worried” about retirement, according to a poll by Gallup.
$5 MILLION WORTH OF EXPERIENCES
Conen calculated that not only will the couple reach their retirement goals, including a $8,000 monthly budget and $10,000 yearly for travel, but their money will accrue exponentially post-retirement.
The couple will see over $5 million in their retirement account when they reach their 80s.
They had many dreams and goals for old age, but Conen said dying with a lot of money wasn’t one.
So, while it’s essential to plan conservatively for the future, it’s possible to overdo it.
In fact, the couple was also conservative with their retirement plans compared to the rest of the nation.
Although 65 is the anticipated median retirement age, workers report retiring at a median age of 62, according to U.S. News & World Report.
Instead, they could use more funds to buy property, travel more while younger, and donate to charity.
Conole even suggested retiring early so they could materialize their desire to spend more time with their parents, who were in their final years.
Ultimately, the personal finance expert said it’s important to live a balanced life and understand money is a means to an end but not the end goal.
However, a person could never have too many hacks for saving.
A retirement expert shared the five best ways to save.
Another expert said retiring early could be a mistake.