What’s Behind Your “No”?
Many years ago, I recommended a disability insurance policy to a prospective client. The purpose was simple. If an illness or injury ever stopped him from working, his family would still be protected.
He thought it over and said no. The premium, a little over $2,000 a year, was too expensive.
Two weeks later, I saw him driving a brand-new Porsche SUV. He had bought it for his wife.
I’m not proud of what I thought next, I have to admit. I decided he was irresponsible, a man who didn’t really care about protecting his family. I knew what a long disability can do to a household’s finances, and he had chosen a luxury car instead.
A second look
I see that story differently now, though it took me years.
Today, I think he was simply showing love to his wife, only in a different way than I was suggesting. The car was something real. He could hand her the keys, share in her excitement, and enjoy the drives together. The insurance policy, however, was abstract, a bet against something that might never happen. Both were ways of caring for her. He chose the one he could see and feel at the moment. His “no” to the policy wasn’t carelessness. It came from what mattered most to him.
That doesn’t mean my recommendation was wrong. Nothing bad has happened to him, and I’m glad. But the last time we spoke, his family was still carrying significant debt, which would make a sudden loss of income even harder to absorb. The risk I was concerned about never went away.
So, here is where I’ve landed. I was right to offer the policy. I was wrong to judge his heart. Love explains a choice, but it doesn’t remove the risk that comes with it. Both things are true at the same time.
The same judgment, in reverse
That story has been on my mind because of something I see in my own profession.
When people retire, the advice world often worries about the opposite problem. Retirees who could afford to spend more, but don’t, are treated as if something needs fixing. A plan shows a comfortable spending number, and when someone spends well below it, the usual response is to encourage them to loosen up, travel more, and enjoy it while they can. The assumption is that a lifelong saver should be able to flip a switch and become a spender on the first day of retirement.
Much of this comes from good intentions. Financial models assume people will gradually spend their savings over their lifetime, so anyone who doesn’t may look like they’re making a mistake. And because advisors see the numbers so clearly, unspent money can start to look like a plan that isn’t working.
But I’m not so sure.
I have clients, a couple, who simply don’t enjoy travelling, so travel was never part of their retirement. They aren’t missing out. They’re living the life they want. Another couple I know travelled for a few years after retiring and then decided it wasn’t for them. I admire that. They tried it, paid attention to how it felt, and learned something about themselves that no spreadsheet could have told them.
Neither couple has an underspending problem. They know what matters to them. They are content, and contentment isn’t something that needs to be fixed.
When fear looks like contentment
And there is one more part of the Porsche story that applies to retirement.
My prospect turned down protection against something that might never happen. Some retirees do the reverse. They hold on tightly to their money as protection against things that might never happen, and the cushion keeps growing because no amount ever feels like enough.
From the outside, contentment and fear can look the same. Both mean spending less than you could. The difference is on the inside: in how the decision feels, and in what it quietly costs you and the people around you.
Three quiet ways to tell the difference
If you sometimes wonder which one is guiding you, these questions may help.
Notice how your “no” feels afterward. When contentment says no, the matter is settled, and you rarely think about it again. When fear says no, the decision tends to come back. You replay it, second-guess it, or feel a small pang when you hear about someone else doing the thing you passed on.
Ask the person beside you. Contentment is easier to recognize when it’s shared. If you’re married, ask your spouse whether your careful choices feel like peace to them, or like something they’ve learned to live without. The answer may surprise you in either direction.
Ask what you’re protecting the money from. Try to name it. A fear with a name can be planned for, and your plan may already account for it. A fear without a name tends to grow.
My wife often reminds me of something I need to hear more than I’d like. I can’t simply tell her not to be afraid. And it isn’t enough for her just to say what she feels. She needs to feel acknowledged and understood before I start reasoning with her. I think the same is true of the fears we carry about money. Before asking whether your plan has an answer, give the fear room to be spoken and understood, whether by your spouse, by me, or simply by you. Reasons land better once the feeling has been heard.
If you’re content, stay curious
Contentment deserves the same respect. But being content doesn’t have to mean the door is closed.
On a recent shopping trip, I got talking with a saleswoman at the Running Room. She told me she had retired from a corporate job a few years earlier. One day, while shopping in that same store, she mentioned her retirement to the manager, whom she had known for years, and he invited her to work there part-time.
She had no plans to work, and she didn’t need the income. She said yes anyway, just to try it. To her surprise, she loved it. The work keeps her mind engaged, and she enjoys the people she meets. It was something she had never considered, and she grew to love it only after she tried.
The thing is, she didn’t go looking for it – she was simply open when the invitation came. If you have time, energy, or money to spare, you don’t need a grand plan. A small experiment may be enough, such as a few hours volunteering, a gift to a cause you care about, or saying yes to something you’d normally turn down. You may find something you love, as she did. Or you may find, like the couple who stopped travelling, that it isn’t for you. Either way, you’ll know yourself a little better.
Whose voice is it?
There is no right amount to spend in retirement. Your money already reveals what you love, whether that’s a car your spouse is excited about, a quiet life close to home, or a cushion that lets you sleep well at night. The question is whose voice is making the decision: yours, fear’s, or someone else’s script. That includes mine.
This week, think about the last thing you said no to. Was it contentment, or was it fear? If it was contentment, enjoy the peace it gives you, and stay open to the next invitation. If it was fear, bring it to our next review. I’d like to hear about it and understand it first, and then we can look together at whether your plan has an answer for it.
Warmly,
Vincent
The comments contained herein are a general discussion of certain issues intended as general information only and should not be relied upon as tax or legal advice. Please obtain independent professional advice, in the context of your particular circumstances. This newsletter was written, designed and produced by Vincent Lam, CFP®, Financial Planner with Intentional Retirement Planning and Investia Financial Services Inc., and does not necessarily reflect the opinion of Investia Financial Services Inc.
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