The most important first step after retirement is not to start extreme savings immediately, but to first figure out "where the money is spent." (Graphic, Bloomberg)
[Financial Channel/Comprehensive Report] If you have a house, savings, and an annuity after retirement, you should be able to enjoy your old age with peace of mind. However, a 68-year-old man in Japan had 30 million yen (approximately NT$5.99 million) in capital when he retired three years ago. After retiring, he paid a lump sum to buy a medieval apartment. He thought that he had solved the last housing problem in his life, and with the monthly annuity, he should be able to spend his old age stably. Unexpectedly, life gradually lost pace after retirement, and the way of spending money became unplanned. Eventually, it turned into a dilemma of spending all the annuity every month, or even using up the savings in advance, leading to "retirement bankruptcy" step by step.
Japanese media reported that 68-year-old Matsuo (pseudonym) entered the company after graduating from high school and worked in the company until he retired. Since he has never been married, he has enjoyed relatively free consumption space in the past. I lived in the company dormitory while working, and my housing expenses were not high. In addition, I didn’t have much time to spend money. Therefore, even if I didn’t deliberately save money, my savings gradually accumulated.
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After retiring at the age of 65, he began to think about his future residence. Originally, he planned to continue renting a house, but after thinking that his main source of income after retirement was only an annuity of 150,000 yen (approximately NT$30,000) per month, and if he had to pay rent for a long time, the pressure of life in the future may increase, so he finally decided to buy a house directly.
After searching for half a year, he found a second-hand apartment that met his needs, and he used 15 million yen (approximately NT$3 million) of his retirement funds to pay off the house in one lump sum. After buying a house, he still has to pay about 13,000 yen (approximately NT$2,596) in management fees and repair funds every month, but he believes that this expenditure will not cause too much of a burden.
However, six months after retiring, he began to find another problem in his life. In the past, I had to go to work every day, so my time was naturally filled with work. After retirement, I suddenly had a lot of free time, which made Mitsuo not sure how to spend it. He began to go out without a specific destination. Sometimes he just walked around. When he got outside, he would eat and occasionally buy some things. The amount spent each time may not be large, but in the long run, the frequency of spending money will significantly increase.
The bigger problem is that he is not a person accustomed to precise expenditure management. When you are working because you don’t have time to consume, you naturally save money slowly; after retirement, it is completely the opposite, you have more time, and the opportunities for consumption also increase.
Matsuo couldn't even say how much money he spent in a month. It was not until he began to discover that the annuity he received every two months often did not last until the next payment date that he gradually felt financial pressure.
On days when he didn't go out, he stayed at home all day. Food such as instant noodles and snacks are often prepared at home, and alcoholic beverages such as beer have also become a part of daily life. This kind of life also begins to be reflected in health. Due to a long-term lack of exercise and overeating, Matsuo gained 10 kilograms after retirement, and his health examination also pointed out that he had lifestyle diseases.
Financial problems gradually worsened. The original monthly annuity income of 150,000 yen has gradually become "spending as much as you receive", and it is not even enough. About 10 days before the next annuity is credited, he increasingly needs to use his original savings.
But the problem is, he knows he is spending money, but he doesn't know where to start changing it. The report pointed out that from a financial planning perspective, spending 15 million yen to buy a house after Matsuo retired may not be a wrong decision in itself. But what really needs to be noted is that after retirement, his income structure, life rhythm and consumption habits changed at the same time, but he did not establish a new financial management method.
Another problem for Matsuo was having no family to rely on. Once illness, disability or other emergencies occur in the future, in addition to medical and care expenses, you may also face problems such as property management and life care. Therefore, simply owning a house without a mortgage does not mean that you are financially secure in old age.
Experts suggest that the most important first step after retirement is not to start extreme savings immediately, but to first figure out "where the money is spent." However, experts also remind that retirement financial management is not about "saving more is better." The real purpose of post-old age funds is not just to "have money to spend", but to support a person's life until the last stage of his life. How to strike a balance between limited income and assets, and use money where it really matters, are the issues that need to be faced in financial management after retirement.
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