retirement

Frugal retirees: Go ahead, spend your money

Retirement » Frugal Retirees: Go Ahead, Spend Your Money

Ask yourself what you're afraid of
Ask yourself what you're afraid of © michaeljung/Shutterstock.com

"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.

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Getting your financial ducks in a row is particularly important if you are going to be a spouse without a job outside of the home.
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