Structuring Your Spending
Many people know about Maslow’s Hierarchy of Needs—
a pyramid of physiological needs, starting with the foundation of food, shelter, air and water and rising to the
spiritual or self-actualization desires. In the same vein, the image below suggests the hierarchy of retirement
spending requirements as most people view them.
The first goal is to be sure your basic needs are covered—
that you have confidence that you are not going to outlive your money, and that you won’t have to radically
change your lifestyle to reduce spending in order or make it from year to year.
When your basic needs have been met, then you can relax a little and think about spending beyond the security
level of life. This is the “golden” part of retirement that so many people dream of but may never see because
they did not make wise decisions with their retirement funds.
Finally, there need to be provisions made for end-of-life issues. No one likes to think about them, but that very
mindset causes many people a lot of anguish. Once you have put a plan in place that provides for your own
care and arranges for the sustenance of your surviving spouse, your family, and your heirs, you can put all that
out of your mind and feel greater peace, knowing you have a plan.