Frugal retirees: Go ahead, spend your money
Ask yourself what you're afraid of
"There are both rational and irrational reasons to be reluctant to spend," says Jeffrey R. Brown, Ph.D., a professor of finance and a retirement expert at the University of Illinois in Champaign, Ill. A rational reason might be to have enough money to cover a lengthy nursing home stay if that's ever needed, Brown says. Another one might be to send a grandchild to an expensive college someday. Less rational, he says, is hoarding assets simply because you can't bear to see your net worth decline.
Of course, even the most rational concerns can often be addressed in ways other than setting aside enough cash to pay for them with one big check. The possibility of a large nursing home bill can be insured against with a long-term care policy. Annual contributions to a grandchild's 529 plan will go a long way toward paying those college bills.
Achieving retirement success
Whether your retirement plans involve a part-time job or full-time leisure, be sure to think through the details to ensure your dreams come true.