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Ben Ruttenberg and Chris Pavcic, Wealth Advisors at EWA, share 10 retirement mistakes to avoid. The first major mistake is underspending or living below your means. While many fear overspending and running out of money, some diligent savers struggle to switch to spending what they’ve accumulated. Some advisors, compensated based on assets under management, may not challenge clients who underspend. To address this, EWA asks clients to rank the importance of legacy planning and financial independence on a scale of 1 to 10. Advisors aim to align their clients’ spending with their goals for a fulfilling retirement.
Hi, I’m Ben Ruttenberg. I’m a Wealth Advisor with EWA. I’m Chris Pavcic, Wealth Advisor at EWA. And today we’re going to walk through 10 of the biggest mistakes to avoid in retirement. Number one, and this may actually sound counterintuitive, but the first biggest mistake to avoid is underspending or spending below your means.
I say this may sound counterintuitive because for many the biggest fear is overspending or outliving your money. But for a lot of our clients, we find that the best savers are then in turn the worst spenders. Saving money requires a lot of discipline and a lot of habits that are developed over time.
And for many it could be very difficult to actually flip that switch and begin spending what you worked so hard to accumulate. And there are a lot of advisors out there that bill on an assets under management basis. So they may not necessarily challenge their clients on this, the less money the clients are spending, the more that they’re keeping with their accounts and therefore the more that they’re actually billing.
So an exercise that we walk our clients through that are in this stage, we’ll ask our clients, hey, on a scale of 1 to 10, how important is legacy planning for you? So whether that’s inheritance for kids, for grandkids, for any sort of charitable causes, rank that on a scale of 1 to 10.
And then we’ll have a discussion about that. And then on the flip side, rank on a scale of 1 to 10 how important financial independence is and spending downward you’ve worked so hard to accumulate. Do you have any big travel plans?
How important is it to actually enjoy the money that you’ve worked so hard to accumulate? So for example, if a client says that their legacy planning is a five or six out of 10 but their financial independence is a nine out of 10 and they’re spending as if financial independence is a five or six out of 10, it’s our job as advisors to challenge our clients to give them the peace of mind, to spend more and make sure that their plan is in alignment with their overall goals.
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