Members of this group seek a balance between saving and spending during retirement years. This strategy is a variation on the previous one, but the differences are significant. Those who adopt the capital-protection package enjoyed success in Phase I. They establish a cut-off date on earning and saving, however, and promise themselves to begin spending [...]

: Preoccupation with money. Many use valuable leisure time to earn more money than they can ever spend. Money has a destructive hold on some people. A few miss out on the special rewards of retirement because their lives are centered around making more money instead of enjoying it. Excessive worry. The bigger the cushion, [...]

Check if People agree Excellent sense of security. Although big-cushion people frequently admit they are hooked on money, they say the size of their security blanket is responsible for most of their happiness. Ego rewarding. Making and saving money is a form of personal fulfillment for some. It is how they get their “kicks.” They [...]

Retirees subscribing to this strategy often do so with little forethought. They probably had good luck during Phase I (accumulating wealth). They enjoyed the process so much and their egos were so gratified that they have trouble switching to Phase II. No matter how large their cushion, it is never enough. As a result, they [...]

Cushion investments can turn sour. Some people lose a good cushion through unwise investments. Figuring the right amount may be a problem. Some retirees keep changing their minds when they get close to a predetermined cushion amount. They never reach a point where they can relax and start spending. Spending cushion money for emergencies is [...]

Check if People agree Provides both security and discretionary income. For many it seems to be the right combination. People can have their cake and eat it, too. Cushion earns additional money. Properly invested savings should grow. Spending discretionary money is more fun. With a cushion, it’s easier to enjoy spending money foolishly.

It’s easy to envy those adopting this strategy. Frequently these retirees calculate how much money they think they will need for a comfortable cushion. They then invest or bank that sum and relax. Once they have their personal cushion, they cease to worry about money. From that point on they buy necessities, pay bills, and [...]

Loss of immediate rewards. People who save rather than spend lead more restrictive lifestyles. Possibility of fewer friends. A few individuals are so motivated to save that they chase their friends away. They often turn down social events because of the cost. Money saved may be worth less later. Under inflationary conditions, money saved now [...]

Check if People agree Provides a feeling of financial security. Money in the bank provides peace of mind. A motivating goal for some. Saving money is a reward in itself for some individuals. Money available for emergencies. Provides a sense of independence no matter what happens.

This plan is similar to squeeze-and-spend and also applies to retirees with modest incomes. It is specifically designed for those who enjoy saving more than spending and are happy building a nest egg. Splurging is not their style. They prefer to cover themselves with a security blanket of savings. Some go to extremes and deny [...]