Dynamic retirement Spending

Dynamic retirement spending is a strategy that involves adjusting your spending patterns in retirement to align with your changing needs and financial circumstances. AV Wealth Advisors can help you understand your upper and lower annual spending guardrails, which will keep you in control of your financial situation - giving you the ability to flex your budget as your personal circumstances change. 

Let's explore some examples to illustrate how dynamic retirement spending works:

1. Market Volatility: During periods of economic uncertainty or market downturns, you will get alerts from AV Wealth Advisors when you have hit a guardrail and will require you to cut back on discretionary expenses like travel and dining to preserve savings and avoid depleting retirement funds too quickly.

2. Health Care Costs: With age, healthcare costs rise. AV Wealth Advisors will help you use dynamic spending to adjust your budget to allocate more funds to insurance, prescriptions, and medical procedures, ensuring your financial well-being.

3. Long-Term Care: If the need for long-term care arises, AV Wealth Advisors will partner with you to figure out how to adjust your budget to reallocate your funds to cover the costs of assisted living facilities or in-home caregivers without compromising your financial stability.

4. Travel and Leisure: Many retirees enjoy traveling or pursuing hobbies and activities. Dynamic spending allows you to indulge in these experiences while being mindful of your budget. For instance, you might plan trips during off-peak seasons or explore budget-friendly travel options, adjusting your leisure expenses without sacrificing the quality of your experiences.

5. Inflation: Inflation erodes purchasing power over time. By utilizing dynamic spending, you can regularly assess your budget to keep pace with inflation. By factoring in rising costs for goods and services, you can adjust your spending to maintain your desired lifestyle and cover essential expenses effectively.

6. Legacy Planning: If you aim to leave a legacy for your heirs or charitable causes, dynamic spending allows you to balance your desire to leave an inheritance with your need for financial security. You can adjust your spending patterns to strike a suitable balance between enjoying your retirement and preserving assets for future generations.