The Spend Everything You've Saved Retirement Plan

Ages ago when I was teaching basic money management at the local Adult Ed I'd mix in a few jokes to keep things light. The problem was that a few adults took offense at my treating a subject as solemn as money so lightly. Whenever I said something I considered mildly amusing those very few just sat and stared like they were attending a hanging. At the break several of them came up to me, munching on my free cookies, and with a condescending air, as if they were smelling something bad, said I'd be much more effective if I didn't try to be cute with my subject. I thought about it and figured if I had to be serious and tedious teaching something as dry a subject as money I'd rather not. It was just a few jokes, dear reader, nothing off color and honestly I never once appeared with my red clown nose or big shoes that flapped.

Today there are many self-proclaimed financial experts writing about money management with a straight face and silly concepts that they make the comedy writers on 30 Rock about as amusing as obit editors. This latest gem, that I am about to share with you, comes from Amy Bell advocating a novel method of investment planning called The Spend Every Penny Retirement Plan. I am not kidding. This sounds a lot like Bobby Layne (football great with the Detroit Lions who played in the middle of the last century), who, when asked about his retirement plan, advocated dropping dead the moment he ran out of money. Ultimately booze and making passes at lasses a quarter his age (or so it is rumored) contributed to his early demise and Bobby ended up being prophetic before the age of sixty.

Now for this latest financial scheme that Amy Bell, writing for the web site Investopedia, suggests that retirees should create a retirement income plan that eventually ends up spending every single nickel they've saved and just live the good life. Don't worry about passing on a legacy, providing for grand kids education or doing good works by establishing a charitable bequest with any spare funds left after a lifetime of work. No, dear reader, Amy Bell makes the case that you earned it, you saved it and you deserve to spend it all before you pass on. Party on, dude.

Naturally this goes contrary to everything we've been taught as morally responsible people. But, just as some economists and financial planners suggest that walking away from a home with a mortgage larger than the market value is a sound civilized decision, so will Ms. Bell Gain her share of converts. Why not? It sounds like fun unless something should go wrong like living past the last banked drachma and being fostered off on society into a Medicaid nursing home or hospice. Then someone else has to pay the caterer.

Amy Bell is quite serious and suggest we do out homework so that doesn't happen and we calculate carefully how long we're going to live. And how does she suggest we do that computation? She writes that we should examine how long our parents lived and then add a decade or more because medicine just keeps getting better and better at keeping people alive. Wow, why didn't anyone else like an insurance company think of that? Does Amy suggest setting anything aside for long-term care, nursing homes or rehabilitation centers? Nope. That's left to chance, good genes and hopefully whatever strikes you, either an illness or accident, is serious enough to keep one down for the permanent count.

Bell is prudent enough to suggest that if someone decides to embark on this fun filled trip that inflation, taxes and not over spending become part of the grand plan.

I can only imagine this Amy Bell person, whomever she is, is probably already hard at work developing other innovative life plans for seniors while locked in her darkened attic wearing an aluminium foil cap to deflect the common sense rays coming from outer space. Bell is not the only one out there with screwball ideas. These new wave financial planner with their odd ideas are everywhere, some may even knock on your door, and today investors have to be more aware and cautious than ever. And the people at Adult Ed thought I was a comic.

If you have questions on this blog or desire additional information on retirement income planning call Paul Stanley @ 877 783 7080 or write to pstanley@westminsterfinancial.com. Send me your e mail address so I may keep you informed as to news and updates.