The latest Chairman’s Corner article at Vanguard.com is out and in it John J. Brennan, Chairman of Vanguard, warns that retirees have to be careful not to increase spending as they enter retirement. There’s a temptation, a reasonable and totally understandable temptation, to increase spending to “reward” yourself in retirement. Going on lavish vacations, buying all sorts of nice things, and any number of high expense things to “celebrate” your retirement certainly feels good but imperils your future livelihood.
This, coupled with the specter of inflation and longevity, are the three things retirees must be wary of. So, treat your retirement not as a goal, not as a finish line, but more like the start of a new stage in your life. Be prudent with your spending so you can keep spending for years to come.