Running out of Money

Planning is not just about living an amazing life.

I normally talk about the amazing things we can do as The Wealth Farmer and as financial planners when working with people who want to take control of their resources and life and build their best life.

But the other day I had to have such a tough conversation,  not tough in a “someone did something wrong” kind of way, but rather in an I’m pretty torn on what the best way forward is for my client, here’s the story:

Jack and Jill are 71 and 65, both retired for 8 years. They have $1 million between the two of them, and currently draw an income of $84,000. They have no debt. But at the current drawdown, and market return, they don’t have enough to get to age 82. THEY WILL RUN OUT OF MONEY.

We’ve worked the budget hard, we’ve made the investment pot sweat, but still, they can’t get past 82.

MY DILEMMA.

What if they don’t make it past 80 (as in they die before), they’ve been living so lean in retirement when they could have enjoyed more of life?

What if they enjoy more of life now while still healthy but then live past 82?

It’s such a common problem, in that people don’t realize how much they actually need in retirement, and when they do it’s too late.

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