I wish there were some quick rules of thumb for making retirement money decisions. Good rules exist for the young and middle-aged: live on less than you earn, increase the amount of money you save every year, stay out of debt, use tax-favored retirement accounts, and invest for the long term. All the rest is ruffles.
When you leave the workforce, however, universal maxims go out the door. Every person and couple is unique. Your financial choices depend on such things as your health, your age when you left work, whether you’re married or single, your spouse’s or partner’s age and health, whether you have a pension, how good your health insurance is, how much (or little) you’ve saved, how much planning you’ve done, whether your retirement was voluntary or forced, whether one of your kids (or a parent) needs financial help, how much debt you’re carrying, how you feel about investment risk, whether you can (or want to) work part-time, and how easy (or hard) it is to match your spending to your means.
Managing your spending is key. Nothing matters more to the financial success of your retirement. The stock market isn’t going to save you if you’re burning through money. You can search for better investments later if you want. But first, pay attention to rightsizing your life.
Rightsizing means finding that happy place where the annual income you expect for the rest of your life matches (or exceeds) your annual cost of living. That’s not always easy to do or, if you’re a big spender, to accept. But once you’ve achieved that balance—emotionally as well as materially—you will find yourself at peace. You’ll know that you can afford your life.