It's Time to Spend Money!

The other day I read an article in the paper written by a financial planner about a fictional couple.  She was 64 and her husband was 74.  The article focused a great deal on how they need to continue to save money!  They already had quite a large amount in savings and owned a mortage free house.  It really annoyed me.

There was nothing about how they should go about spending their savings.  The average age of mortality is 78 and this guy is 74!  He may only have a few years left and they want him to continue to save money!  I'm not suggesting that people should rush out and spend all their savings; what I am suggesting is that there comes a time when spending your money (and enjoying what life there is left) just makes sense.

This is especially true if you don't have children.  We don't and a few years ago we decided to add a dream kitchen to our house.  I'm a serious cook and had been working in a terribly small kitchen for years.  We decided to use a Home Owner Line of Credit (HOLC) to finance the project, with NO intention of paying back the loan.  That's right; no intention of paying back the loan.  We essentially used the equity in our house to enhance our daily quality of life. It is 3 years since we did it and we are still enjoying the space every day.  We make the interest payments every month; that's all.  There is still a large amount of equity in the house and if we both die, our relatives would still inherit a good deal of money. 

Financial planning in retirement needs to involve a hard look at how much money needs to be protected for the future and how much can be spent now.  I'd like to see a few more planners recommending that people spend some of their savings while they are still young enough to enjoy it.