Successive generations always seem to be better off than the last. Our parents had a better standard of living than their parents and our children seem set to have a much more than we ever had. For that reason, most retirees don’t seem very concerned at all about leaving an inheritance. However, despite having a desire to spend their own money, many retirees struggle with the idea of seeing their hard-earned wealth disappear and with knowing how to safely spend it without being in danger of running out of money.

On retirement, the logical starting point for a financial plan for retirement is paradoxically the end point. How much do you want to have left in the bank when you reach the end of life? The difference between the amount of wealth you have at the start of retirement and the amount you plan to have at the end of life is how much you get to spend. You could plan to spend it evenly over retirement by dividing the amount by the number of years you expect to live. However, it doesn’t have to be a straight-line reduction.

The first stage of retirement is the most active stage – it’s a time for travelling the world, joining sports clubs and enjoying life. Your preference may be to spend more per year during this stage to make the most of life while you are still fit and healthy. On the other hand, if you are worried about who is going to look after you in the final stage of life, you may wish to spend less per year in the early years to make sure you have enough money for end-of-life care.

Everyone is different, but make a spending plan, because if you don’t spend your money your children certainly will.