Happiness & Flow in Retirement

Did you know that the happiest people in the world aren’t just happy? Study after study suggests that happiness isn’t just an innate quality; it’s a matter of a person’s environment, their relationships, and what they do each and every day. What we do every day — whether it’s work, raising kids, or volunteering — gives us a sense of pride and satisfaction, which all lead to happiness.

Retirement on Your Terms

My retired clients are some of the most vibrant and active people I know — and there’s no stopping them. Retirement also looks a lot different now than it did 50 years ago.. People are living longer and staying active, which means you have a lot of time to enjoy your post-work time. They’re also choosing to retire on their terms, not on the timeline of previous generations.

What You Need to Know About Taxes and Retirement

Most clients are surprised when they get to retirement and see that their taxes have changed. They go from having a normal W2 income, where their taxes are withheld — and sometimes they even withhold additional taxes to ensure they don’t owe at the end of the year. Then, they file their taxes, maybe get a refund, and it’s all fairly straightforward

When they retire, however, a couple of things happen.

From Living High on the Hog to Pinching Pennies: When Your Lifestyle Has to Change

Clients describe the meeting as shocking, even while admitting that they knew it was coming. It’s the financial planning meeting in which we look at their retirement projections to see if they are on track to meet their financial goals.

Some couples have figured it out. They know what they can spend; they live on a budget and have saved enough to be comfortable the rest of their lives. But for other couples, the meeting highlights adjustments they knew they needed to make.

And by adjustments, that can mean dramatic changes in their current lifestyle.

What to do when your lifestyle needs to change?

Get concrete numbers

When you come to terms with the fact that your lifestyle has to change, get concrete numbers. Talking in the abstract about needing to “cut back” is a lot different than knowing exactly how much money you need to be saving every year and what your ending budget number needs to be.

There are important numbers to consider when looking at spending cuts versus retirement dates or goals. If you were to work an extra year or five years, how does that change your financial picture? Often, those changes can have a dramatic effect on what you need to cut back.

Work with a financial planner

There are resources online, but I encourage you to find a financial planner you feel comfortable with and work with them through this process. Besides developing a relationship that aids financial recommendations, they can give you insights based on similar people’s experiences that they’ve worked with. A good financial planner will get to know you personally and offer advice tailored for you and your situation.

A knowledgeable financial planner will also help you identify the other areas in your finances to be aware of, expert advice that will help you should something unexpected happen. One gap in your insurance and an unfortunate incident can destroy your financial plan and everything you are working towards. Obviously, I’m biased, but I truly believe that the investment is worth it.

Identify your values

Knowing your values makes financial decisions so much simpler. It becomes easy to lose sight of what is really important to us, much of which doesn’t require a lot of money, and focus on the extras of life. Living life within your values creates the framework by which you begin to make intentional decisions.

In his New York Times column, David Brooks says it well: “Early in life you choose your identity by getting things. But later in an affluent life you discover or update your identity by throwing away what is no longer useful, true and beautiful.”

Consider Cutting Back Big

Big lifestyle changes are hard. Much of the popular advice you hear these days advocates cutting back on purchases like your everyday latte at Starbucks. While it’s true that small changes can make a difference, those results will be more subtle and long-term.

When you are faced with a lifestyle change, you must put all the options on the table. Some may be painful: downsizing your house, trading in your leased car, looking for another job, moving for a promotion, cutting your annual vacation. However, it’s necessary to consider every way in which you can make a significant change.

Begin Evaluating Every Option

Look at a list of all of your expenses and evaluate every line item. Begin by asking “why”. After evaluating what you money is being spent on specifically, ask why you are choosing to spend money on the items that you are. What are the alternatives? Even when alternative options seem far outside the realm of possibility, still include them. The purpose of this step is not to solve the problem, but to brainstorm every possible solution. Considering options that seem far from what you are willing to do (like trading your car for public transportation), give perspective and bring attention to the luxuries that you have in life.

Below are some examples of line item evaluations:

Car Payment: $650/month

Why am I spending money on this? Because I need transportation!

Why am I choosing my current option? Two cars are more convenient for our family and I’ve always wanted a BMW.

What are the alternatives? Sell it and have one car in the family, sell and buy a nicer car, sell and buy a less expensive car, sell and buy a used car, take public transportation.

How open am I to changing this (or do a scale of 1-10 on how important this is)?

If you were to change, what would be the monthly/yearly cost difference?

Eating Out: $400/month

Why am I spending money on this? Because we need to eat.

Why am I choosing my current option? We enjoy eating at restaurants and it’s convenient.

What are the alternatives? Eating out less, purchasing ready-made meals, personal chef, cooking all meals at home.

How open am I to changing this (or scale of 1-10)?

If I did make a change, what would be the monthly/yearly cost difference?

Begin to make decisions

After you have worked through your line item evaluations and identified what’s important to you, start making decisions.

As with so much in life, these decisions are not easy or clear cut. Every decision is a trade-off. What is right for one family is not going to be right for the next.

Remember to reflect back on why you are making these changes. It takes courage to make big decisions when your lifestyle has to change, but knowing why you are changing can make all the difference in the world.

If you find yourself unsure of your future and aren’t even sure if you need to cut back, I encourage you to consult with a financial advisor and begin the journey to achieving your financial goals.


Lifestyle Creep is Gonna Get You

“I have no idea how we did it back then,” a client couple commented on a copy of their budget from fifteen years prior. They laughed as they remembered their early struggles. They knew that their life had altered over the years, but hadn’t realized how much it had transformed financially.

The changes that take place over many years can be hard to identify as you go through daily life, but looking back over time, the changes can be shocking.

Lifestyle Creep

Most people see their incomes rise over the course of their working years, and as it does, that extra money is added to what they spend. With more money to spend, lifestyle spending creeps up.

Lifestyle creep happens over years. When you were younger, you might not have imagined eating fine dining on a regular basis, or having the ability to shop at Whole Foods or to take vacations. Your own children have grown accustomed to having the gifts and luxuries you never had growing up.

We don’t notice the innocuous changes and grow comfortable with the gradual adjustments. Because it’s not a sudden change, we don’t make conscious decisions about spending. It just happens.

Lifestyle creep is normal and expected in life, but looking at it from a financial perspective, there can be negative consequences if you don’t plan well for it.

How Lifestyle Creep Effects Your Financial Plan

You become inured to spending money

The danger here is that you may not even realize it. An increase in income means an increase in spending. What use to be unimaginable, becomes the norm.

Your perception of money changes

Spending $20 outside your budget may once have thrown your finances for a loop. Now, you don’t even blink at $20 spent here and there, and may spend even more than that without a second thought.

Your lifestyle changes

While you were once able to live comfortably on a certain amount, several years later, that amount has increased. You value the experiences and luxuries of the life you enjoy now. You didn’t know what you were missing before!

Not only has your lifestyle changed, your friends and social circles have changed. Social expectations may include dining at restaurants that would have never fit your budget before. You may feel (consciously or unconsciously) that in order to maintain those relationships, you have to maintain the spending.

Your retirement numbers change

This is the most important way that lifestyle creep affects people. For most, the goal of retirement is to maintain how you are currently living your life, or even increase the amount you live on; meaning that your income level will stay the same or higher.

As your lifestyle spending slowly rises, the amount you need in retirement will also rise. A small lifestyle change now has a dramatic effect on how much you’ll need in the future. As a basic example, for every $1,000 increase in your yearly spending, or $83 per month, you will need to have an additional $25,000 saved for your retirement years to sustain that lifestyle.

People feel compelled to save more money as they near retirement. Saving money is very important, but the biggest impact a couple can make on their retirement is to decrease their expenses.

Proactively Planning for Lifestyle Creep

Track spending and income

If you had a financial plan done in the past, be aware that your income and expenses are likely to have changed over the years. To keep current with the amount you need to be saving, track spending and income and revisit that financial plan often.

The most important element of a financial plan is the dollar amount that goes out every month. When that number changes, it is critical to let your financial planner know. Together you can determine an appropriate savings plan.


Many people intend to save their raises or bonuses. They plan on increasing their 401(k) contributions or putting extra money away for the children’s college fund or another financial goal. However, it’s far too easy to have good intentions and still miss implementing them.

Your expenses will always rise to your income unless you have a plan in place. A plan requires intentionality, energy and time. Frequently it’s on the to-do list, but can feel so enormous that it never gets done. Don’t let this happen!

Your first step is to realize how important this task is. These simple decisions to save or invest windfalls can be the defining point in your financial plan's success. Next, make the commitment to plan and take the time to put systems in place to make it easier to allocate that money. Set up an automatic investing plan or arrange to make extra payments on debt. Check into budgeting apps that help you save without thinking about it. Implementing these seemingly small steps throughout your life will yield big results.

Don’t let lifestyle creep wreck your retirement goals. Being conscious of your spending and having a plan in place will not only pay off financially, it will bring peace of mind as well.

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You're the Next Contestant . . . Why It's Hard to Talk About Money in Marriage

They could have been contestants on The Newlywed Game, their answers revealing how little they were in agreement on matters of married life. She wanted to travel to Europe and experience the finer things in life. He wanted to know how they were going to pay for their retirement and day to day expenses. She was missing out on life and she blamed him. Their financial lives were unstable and he blamed her. You could feel the tension in the room. The meeting could have used the experienced refereeing of a game show host. These conversations are all too common in my work.

Finding consensus with your spouse is one of the most important aspects of your financial life. Financial harmony within a marriage is critical to financial success.

Why is this so hard? It really shouldn’t be, but as many couples know, it is.

Talking about money is threatening

Regardless of financial situation, something about money strikes at the core of who we are. It defines our status in the world, what we can and cannot have. Money is integrated into every area of our lives, whether we like it or not. Even the most basic choices in life, like the shirt you are wearing or what you do for dinner tonight, is the result of a money decision.

There are conflicting values within each of us when it comes to money. For example, will it really matter if you eat out for lunch today? Surely it won’t affect your college savings. Setting aside money is great, but what about spending a little on that trip you’ve always wanted to take? Add another person into the equation and you have all the makings of an uncomfortable, but entertaining game show: the conflicts are endless.

When it comes down to it, we’re not talking just about money, we’re talking about values.

Ok, so these conversations are threatening, but they need to take place. So what do you do about it?

Make the conversation safe

The fastest way to make a conversation not feel “safe” is to start accusing your spouse. Remember, this is a values conversation, not just a money conversation. Neither of you want what is important to you to be minimized or insulted.

The goal of each conversation is to understand your spouse and for your spouse to understand you. Granted, sometimes you may never understand why your spouse has to spend money on that, but realizing it’s important to your spouse allows you to respect their decision.

Practical steps to making the conversation safe:

  • Find a time that works for both of you. Trying to have a financial conversation when you are multitasking or concerned about everything else in life will only lead to frustration.
  • Know each other’s strengths. If one of you hates math, budgeting can be more difficult. Forcing a spouse who hates math to balance the budget to the closest penny may be the equivalent to torture. Find a middle ground.
  • Remember the person you fell in love with. Conversations can be tense, but remember what drew you to your spouse in the first place. If this is your focus, the edge will come off your voice and your spouse will feel the difference.

Establish ground rules

Which topics are off limits or which topics need to wait until the end?

What happens when you or your spouse gets overwhelmed in the details? Does the meeting stop? Do you take a fifteen minute break? Know what your triggers are and plan for them before you walk into the discussion.

Other ground rules may be to limit the amount of time you spend on the conversation. One person may not be able to focus longer than 30 minutes, making anything over that time fruitless.

Some people may want the numbers ahead of time. They may need time to process and think through their feelings before the discussion, allowing them to not feel blindsided in the conversation.

Go beyond the numbers

As you work through your budget, commit to talking about what’s below the surface. Instead of becoming defensive over numbers, share what they represent and why their important. For example,

“This line is important to be because .....”

Being aware and identifying why you are spending, saving or investing your money is incredibly important for yourself and your spouse. You have to lead the conversation to find the underlying issues.

Lower your expectations

You may walk into a financial conversation with your spouse and expect to come to a conclusion by the end of it. Anything short of this may be a failure in your mind. Lower your expectations. Financial conversations are never a one and done type of deal. The first conversation may simply be to identify a problem. Turn your expectations into goals and realize that it may take time before you end up where you want to be.

There’s nothing to lose and everything to gain when you take the necessary steps to open the lines of financial communication with your spouse. While it may be difficult to return to the rosy glow of honeymooners, thoughtful, deliberate conversations about money in marriage can bring you one step closer to wedded bliss.

Enjoying the Best of Times in the Worst of Times

The Bloomberg article on Monday, August 24th leads with the line: “Panic. Judgment Day. Carnage. Meltdown. Fearful. Depressing. Psychologically Draining. Wired.” These are words money managers used as they tried to process the effects of the current market downturn. I had a client meeting the same afternoon. Reading the headlines and the words used to describe investor fear, you would expect the mood of this meeting to reflect that.

“Upbeat. Excited. Anticipation. Calm.” These are the words that I would use to describe my meeting.

This meeting was special because the husband is retiring in three weeks. It is likely the last time I will see this couple before they both are officially retired.

Wait, a meeting finalizing a retirement during such dire market conditions and those are the words used to describe it?


We had a plan for how my clients were going to retire, regardless of what the market was doing. In fact, we planned for exactly this scenario; what would happen when the market fell. It’s simply coincidence that the market fall is corresponding with my client’s retirement.

Here are the reasons my clients have confidence as we go through these rough market days:

They have perspective

We did talk about the market downturn, but my clients recalled the lessons they learned in 2008 and the years prior to that. They discussed how their experiences have given them perspective on what they hear and see in the news now.

They have a plan

This couple knew what they wanted their future to look like and took steps to plan for it. We have been working together for several years and this is simply an extension of the plan we created for them to retire. We considered their social security, their strategy to take money out of their investments and what retirement would realistically look like for them.

But this didn’t all just happen recently. My clients have been saving diligently with their 401(k)s for most of their careers. They paid off their house and continually made saving a priority.

They control what they can

My clients had calculated how much they needed to maintain their lifestyle in retirement. To that end, they monitor their spending by tracking their monthly expenses. They know the potential costs of long term care and other liabilities and they’ve insured for them. They are aware of the uncertainties that come with retirement, but they’ve done what they could to prepare.

Don’t get me wrong. Market downturns are a big deal. They are unnerving at best and it’s important to pay attention to them. But planning is even more important. Planning for retirement is what separates the panic, carnage and meltdown from the joy, peace of mind and excitement of retiring on your terms and your timeline. When you take control of your finances you won’t need to worry about market upsets having control over you.

Determine if Hiring a Financial Advisor is Right for You

Deciding whether or not you need a financial advisor is the first step in getting your financial house in order. In making this important decision, let's look at the type of person who benefits most from working with a financial advisor.

She has a full schedule

You know the importance of financial planning , but don't have the time to commit to learning all the intricacies involved in managing your money. To you, spending time with family and doing things you enjoy are more important. A financial advisor can do the work and let you live life.

He is intimidated

To this person, money is a confusing thing. I work with a lot of people who are highly competent in every area of their life and yet feel intimidated by investing. This could be largely in part because they have never had to do it or they just don't feel comfortable with numbers. A financial advisor can easily alleviate many of the financial fears you might have.

She is facing a major life transition

You don't know what you don't know. Going through a transition, whether it be retirement, the recent loss of your spouse or switching jobs, can be a tremendous source of stress, both in terms of finances and life in general. Walking with a financial advisor through those times of transition, especially an advisor who has been trained in working with transitions, can be invaluable.

He values financial advice

You may not be able to watch your finances on a regular basis. In this circumstance, you may want financial advice to guide you toward the future you desire.

Financial decisions weigh heavily on her

If financial decisions keep you up at night, you are probably in need of an advisor. A well-developed plan should ease financial concerns and allow you to focus on the things that are important in life.

There's the marriage issue

Managing your finances on your own is one thing, partnering with your spouse is another. This can be done well, but even if one spouse is very comfortable managing the finances, if the other spouse is not, an advisor may be a benefit to both.

Not everyone needs a financial advisor

This may sound strange coming from a professional financial advisor, but it's important to recognize that when it comes to finances, one solution is not right for everyone. Anyone who tells you anything different is lying to you!

Here are the characteristics of someone who probably doesn't need a financial advisor:

They love personal finance and read about it all the time

There is a wealth of information on the internet about personal finance. There are entire websites set up to provide the step-by-step guidance on how to get your financial house in order. To some, this is an exiting way to spend an evening. People who enjoy it will not need a professional to take it off their plate.

They have the time to learn and manage their investments going forward

It's one thing to know how to do something and another thing to actually do it and do it consistently. Financial planning takes consistent time and effort. Those who are willing to put in that time and effort do not need a financial advisor.

Market uncertainty excites them

One of the biggest advantages of working with a financial advisor is staying on course when the market goes down. Making a mistake at the bottom of a market cycle can have significant implications on your portfolio. DIY investors must have the stomach for the market cycles and intuitively understand how markets work.

They want to be in control

This is sobering to write as I can be this person. I'm independent, self-employed and know that I am capable of learning most things. I'm learning to get help where needed, but know that if someone is not willing to give up control with their finances, they won't. People who cannot let go of control of their finances should not bother with employing an advisor.

They don't want to spend the money

If you don't want to pay for financial advice, then don't. You will always be thinking about the price tag, which will deter you from focusing on what's really important.

If it seems you are a person who does not need a financial advisor for any of these reasons, but you are still unsure of your next steps, schedule a call with me. I would love to point you in the right direction and give you the resources you need to help you get on track. There are absolutely no obligations or strings attached. I gain tremendous satisfaction from helping people with their finances, even when it means they do not use me as their financial advisor.

Reality Check: Are You Spending Too Much During Retirement?

Despite confidence in retirement stability increasing slightly across the board, many Americans are falling prey to the misconception that retirement planning is a low priority. Often citing cost of living as an excuse, those without a financial plan for retirement are headed for fiscal ruination. Whether you’ve diligently planned for retirement or not, overspending can lead to a future filled with financial insecurity.

The Facts on Retirement Spending

According to the Employee Benefit Research Institute’s 2014 Retirement Confidence Survey, nearly half of all retirees surveyed reported concerns about rising debt. Approximately 3 in 4 adults without a retirement savings account had less than $1,000 saved. Similarly, nearly 60% of retirees have less than $25,000 in savings. For those planning to live a long and fulfilling life, a lack of adequate savings puts a kink in well-laid plans. Sadly, less than 20% of retirees had more than a quarter million dollars saved.

What does this mean for you? Being outside that 20% may result in financial ruin and serious stress. Don’t let that happen – make a change now before it’s too late.

Planning for Retirement (It’s Not Too Late)

Even if you’re in retirement, there are things you can begin doing today to make your financial future more secure:

  • Evaluate needs and assets. The first step in responsible retirement spending is to evaluate your total assets and needs. Are you buying high-priced items, or are your financial problems stemming from recent medical expenses? Identify the major expenses contributing to your situation.
  • Hire a financial planner. When overspending on a fixed income, the quickest way to get back on track is to enlist the help of a financial planner. A thorough review of your financial status will enable an adviser to suggest the best course of action.
  • Reduce unsecured debt. With unsecured debt, each passing month leads to more interest and fees. A large part of achieving financial stability is reducing this debt so you can keep more of your hard-earned money.
  • Make wise investment decisions. Working with a financial advisor will help you identify and follow through with wise investment decisions. Depending on the market, financial gains will equip you to save more and achieve financial security during retirement.

Live Your Way

Ultimately, it’s up to you how to spend your hard-earned money. What isn’t up to you (or any of us) is how long we have to live. Overspending in retirement can lead to a crippling lack of funds for the future, and outliving your savings isn’t a pleasant way to spend your golden years. By realistically planning for retirement and spending money responsibly, you can ensure you’ll have paved the way to a more satisfying life.

Do you know someone in danger of outliving their savings? Are you worried about doing the same? Consider signing up for our newsletter for helpful financial tips, news, and information!