Transcription
I'm about to say some things in the next 20 minutes that a lot of people in the financial services industry will hate. But I'm saying them anyway, because I have watched this play out too many times for too many good people and the silence about it is starting to feel like complicity.
I know exactly who's watching this video. You've done everything right. You've saved, you've invested, you were patient, you hit your number, probably higher than you or your parents ever thought possible. And then quietly, for reasons you can't fully explain, you just can't seem to let yourself enjoy any of it fully. The trip you've been talking about for years, you haven't booked. The thing with the grandchildren that will cost a fortnight's pension income and be remembered for four decades, you haven't done. The upgrade, [music] the experience, the gift, the gesture, all sat in a quiet mental queue labeled maybe year. And the balance on the statement keeps getting bigger and the feeling in your chest doesn't change. And one day, without you deciding it, you'll be 80 and a lot of the things on that list will no longer be possible. And the money will still be there and somebody else, probably someone you don't want to, will end up spending it. You don't have a money problem, you have a permission problem and it's costing you more than you have let yourself see.
In the next 20 minutes, I'm going to do three things. One, I'm going to show you exactly why your own brain is fighting you on this. 40 years of conditioning combined with hardware built for a world that no longer exists. Two, I'm going to name the actual consequences of not spending. Specific, countable, visceral losses. [music] The stuff nobody in my profession says out loud. And three, I'm going to give you the permission slip [music] backed by behavioral science, by the man who invented the 4% rule, by the author of Die With Zero, by me and unbelievably by the UK Treasury itself. This is going to be Marmite. Some of you will hate it, which is good. But whatever you do, make sure you stay with me right to the end.
Hi, I'm Dan Hayler, retirement planner, coach and regulated financial adviser here in the UK. I specialize in the part of retirement most financial channels ignore, the psychology [music] behind the money. I have sat across the table from too many retirees in their late 70s and heard the same sentence. [music] I wish we'd done it when we could. I have watched families leave fortunes behind that the children didn't need and the parents didn't enjoy. I have realized slowly that this is not an unlucky few. This is almost becoming the default. This is the house edge of the retirement industry and it has been running on good people [music] for 40 years. And I'm done being polite about it.
Four decades, you've been told gently, relentlessly, that the highest virtue of a financial person is to accumulate. Save more, invest longer, preserve capital, be prudent, don't touch the pot, leave something behind. Every one of those sentences was the right advice when you were 30. Then, on a Friday in April, you retire. And nobody tells you the advice is reversed. The skill of the accumulation decades is patience. The skill of the decumulation decades >> [music] >> is the opposite. The capacity to actually deploy capital into the life you built it for. Opposite skills. And most of you have spent 40 years training one and zero years training [music] the other. Worse, the people whose job should be helping you switch are almost without exception commercially aligned with [music] you not switching. Every pound you don't spend is a pound they keep managing. Every year you delay is another year of fees. There's no conspiracy, there's just a quiet structural gravitational pull in [music] an entire industry toward keeping you hoarding. And after 40 years, you have internalized that pull as your own voice. You think the caution is you, it isn't. It was installed.
Bill Bengen, a good friend of mine and the man who invented the 4% rule, published research showing the average retiree using his own rule died with more than five times their starting portfolio. Five times. Not a buffer, a monument untouched. That is a generation of thoughtful people told a worst-case guardrail was a target, who sacrificed the trips, the family moments, the joy they had earned to hand over a larger pile of unlived life to probate. And Bill Perkins, in his wonderful book Die With Zero, lands the follow-up blow. Your money and your life are not the same currency. You cannot save life up. You cannot compound health. Time only moves in one direction. Every pound you leave unspent [music] is a pound you quietly exchanged for experiences, health, time and memories that you chose not to have. Over-accumulation in retirement is as financially [music] reckless as under-saving was in your 30s. It's just that only one of them gets called reckless in public.
Now we get to the bit most retirement content skips, [music] because it's not enough to tell you to spend more. Well-meaning friends and probably your financial adviser have been telling you that for years. The reason it hasn't worked is that you're fighting something much older and much deeper than advice. Your brain isn't broken, it's actually working beautifully. It's just working beautifully at a problem that stopped existing about 5,000 years ago. Your nervous system was built [music] for scarcity. For most of human history, survival meant one thing. Keep a buffer. Store the grain. Don't eat the seed corn. The winter will be bad. There's no bank, no hospital, no pension. There is only what you have. That machinery is still sat inside you. It doesn't know you have a pension. It doesn't know about the NHS. It doesn't know about compound growth. It knows what your [music] ancestors knew. More in storage is safer, less is death. So every time you consider spending from the pot, a very old part of your brain lights up and says no. Keep it. Not because it's calculated anything, because it is literally designed to keep you alive through a winter that isn't coming.
If the hardware were the only problem, it would be bad enough. But then 40 years of your life got laid on top. >> [music] >> Training the same pattern harder. The post office savings book, not blowing your ground, paying down the mortgage, maxing the ISA, topping up the pension, being sensible. Every one of those moments trained the same neural pathway. Accumulation is good, deployment dangerous. And it trained it in the parts of you that run fastest >> [music] >> and most invisibly. The reflex parts. The parts that decide before your conscious mind has even shown up. So, when you sit in your 60s with a million pounds and consider booking a 6,000 pound trip, >> [music] >> something happens in a fraction of a second that feels like I don't really [music] want to. But is actually a neural pathway trained daily for 40 years >> [music] >> firing and telling you no. You don't experience it as conditioning, [music] you experience it as your own voice. That's how conditioning works.
And on top of all of that, a third layer, >> [music] >> Kahneman and Tversky won a Nobel Prize for it. Losses hurt about twice as much as equivalent gains feel good. Run that through a retiree's brain, every spend from the pot is processed in a fraction of a second as twice the pain of the pleasure it's about to buy. You want the holiday, you also don't want to lose the 6,000 pounds. And the don't want to lose side is wired in at approximately double the volume of the do want the holiday side. No wonder your hand hesitates. [music] Your amygdala isn't calculating, it's defending. Plus, there's one specifically us, very British, in that you've absorbed centuries of a cultural script that treats thrift as virtue >> [music] >> and indulgence as slightly suspicious. I couldn't possibly. That's a bit extravagant. We don't need to. This doesn't go away when you retire. It gets louder, because now you're not earning it and spending on yourself from the pot feels a bit like cheating.
On top of the hardware, the conditioning, the loss aversion and the cultural overlay, your brain runs five specific traps. I see them in virtually every retiree I work with. Name them and they start losing their grip. Trap one is the scoreboard. 40 years of staring at the number trained you to treat it as a score. Any spend registers as a loss on the scoreboard. And the pot becomes a trophy rather than a tool. Trap two is the never enough ratchet. You pick a number, hit it, then quietly revise it upward. The goalposts drift, and because you're moving them, you don't notice. Safety was never arithmetic. It's an internal state. [music] Trap three is identity attachment. For a lot of hard-working high earners, the pot is a monument. 40 years of discipline externalized into [music] a spreadsheet. Spending from it doesn't feel like spending, it feels like dismantling yourself. Trap four is the endowment effect. What we already own, we overvalue. Every pound in the pension is psychologically worth more than the identical pound you'd earn tomorrow. And trap five is avoidance dressed as virtue. "I'm saving it for the kids." is for some people a genuine position. For others, it's behavioral avoidance wearing a morally respectable [music] hat. Giving money to your children after you die requires no decisions, no planning, no permission, no facing the truth that your time is finite, and there are things [music] you want that you haven't let yourself have. Leaving an inheritance is what happens if you do nothing.
Your brain, your culture, your industry, and 40 years of your own life are pulling you in the same direction. Toward the pot, away from the life. You're not failing at this, you're being acted on by something you can barely see. The first move is seeing it.
Now, the bit nobody in my profession wants to discuss, [music] the actual price you are paying for not spending. We spend so much time in retirement content talking about the risk of spending too much that we never name the opposite risk, which is odd because for most of the people watching this, the risk of spending too little is already materializing, >> [music] >> and you cannot see it because the loss is invisible. There is no statement for the holidays you didn't take. No quarterly report for the memories you didn't [music] make. No red number for the year your grandson stopped wanting to go to Colemore because he'd rather be with his mates. Under spending is the most expensive retirement strategy available, and it's invisible. Let me make it visible for you with six specific costs.
Cost one, the health span window that quietly closes. You have a window >> [music] >> right now where you have money, health, and time all at once. For most people watching, that window runs from your late 50s to your mid-70s. 12, 15, perhaps 20 good years if you're lucky. After that, the menu of what you can still do shrinks. Not because the money runs out, because the knees go, the back goes, the stamina goes, the partner's hip gives up, the friend who would have come now has an operation. Every year of that window you don't deploy [music] is a year you cannot get back. You can earn the money back. You probably cannot earn the knee back.
Cost two is the family moments that age out. Your grandchild is five once, eight once, 15 once. The version of them who will adore getting into a garden fort you built is available for three-year window. The version who will sit on a beach with you for a week without wanting to be elsewhere, a narrow strip of childhood. The version who will let you teach them to fish, narrower still. The parents I watch who grasp this deploy. They book the cousins all together cottage when the grandchildren are eight, not 18. The parents who don't rationalize into next year, and [music] next year, and then look up and the grandchildren are 17, and nobody wants a family holiday anymore. The pot is £40,000 larger for it. And they carry the trade to the grave, [music] largely without naming it.
Cost three, is the help that come too late. You want to help your children. The version of help that changes their life most profoundly is almost always help that arrives early. The house deposit at 30 that shapes [music] which neighborhood they raise their family in. The career risk they can take at 34 because you [music] backstop them. The month of your time when the baby arrives. These are moments where your pound compounds into their life at an enormous multiple. The same pound [music] arriving through probate when they're 56 and already established is a fraction of the gift the earlier version would have been. Deferred generosity is not generosity with compounding [music] interest. It's generosity at a discount.
Cost four is the marriage that quietly narrowed. This one nobody says out loud. Under spending retirement over time tend to narrow marriages >> [music] >> because the alternative, the travel, all the experiences, the novelty, the shared projects, is what keeps a long marriage alive well into its fifth decade. Experiences are like oxygen. >> [music] >> Staying home every weekend because we've got everything we need works for a while, and then quietly doesn't. The world shrinks, the conversation narrows. Two people who live in the same house rather than two people [music] who share an adventure. You saved for decades so you'd finally have time together. If you then ration the experiences that were meant to fill it, you have bought yourselves a well-funded boredom. Your marriage deserves more than that. You both do.
Cost five is the version of you that never [music] got built. You have inside your head a version of yourself that would exist if you let yourself become them. The one who finally did [music] the Italian course, who learned to sail, who did the charity work, who finished the novel, who got fit, who was generous and unembarrassed [music] about spending on experiences, who said yes instead of we'll see. That version requires investment, not just time, money. Every year you don't spend on that version is a year that version [music] doesn't exist. And at some point, the window in which that version could still be built closes without any big grand announcement. And you keep going as the smaller, quieter, more rationed version. Which, by the way, is not the person that people who love you >> [music] >> actually wanted you to be.
And finally, cost six, the Treasury takes it. And the bitter cherry, from the 6th of April 2027, most unused pension funds fall inside your estate for inheritance tax. Which means the money you hoarded for the kids is [music] for a meaningful number of households about to have 40% taken [music] by HMRC before your children see a penny. Add the beneficiaries' income tax on drawdown, and the effective rate can exceed [music] 60%. Some cases, it could be north of 70%. You hoarded the pension, [music] you denied yourself the life it was meant to fund, and after you die, HMRC takes the largest share. Your children get a fraction of what you thought you were leaving. And the balance [music] of the trade you made is now just visible. You gave up a decade of health span spending, >> [music] >> memory-making with grandchildren, marriage-deepening experiences, and the version of yourself that never got built so that the UK tax system could have the pension you hoarded. That is the actual trade. Nobody in my industry is willing to show you that trade clearly. I'm showing it to you now.
So, what do you do instead? Perkins' Die With Zero argument rests on one idea. You don't just have money, [music] you have three currencies running in parallel on completely different clocks. >> [music] >> Money, health, and time, and they are not interchangeable. Money grows steadily and [music] peaks in your 60s and 70s, exactly when most people start being careful with it. >> [music] >> Health has already begun its decline from your mid-50s. The overlap window where you have meaningful amounts of all three at once [music] is narrower than you realize. 15 or 20 good years, [music] maximum. And that is exactly the window in which most retirees hold back the most. The right question isn't, "Can I afford to spend this?" You can. If you're watching this video, almost certainly you can. The right question is harder. When does spending this pound create the most value in the life, the relationships, the version of me this money was supposed to buy? And for most of the important things like travel, experience, generosity, health, learning, the answer is almost always the same. Earlier than you think, sooner than you've let >> [music] >> yourself.
Die With Zero isn't spend wildly and hope you don't outlive the money. It's design the drawdown so the pound you don't spend before you die isn't a success. [music] It's a sign the plan was too conservative. In one of the stranger accidents of UK tax policy, the April 2027 change has made die with zero the most tax efficient retirement strategy in the country. Spend it in your lifetime, HMRC stays out. Hoard it to leave behind, HMRC takes most of it. Bengen's research has joined the case. Perkins has joined the case. Your own health span is joining the case. The tax system has joined the case. The only thing still pulling you toward hoarding is the wiring and the conditioning. [music] The entire landscape has moved. The question is whether you have.
If you accept even half of what you've just heard, the next question is how. Because [music] you cannot unlearn 40 years of hoarding in an afternoon. Just spend more is not a plan. Learning to spend is a skill [music] built through practice. And four moves.
Move one is to define what your money is for. Single page, no advisor in the room, write [music] the top 10 things you want this money to deliver into your life or the lives of people you love [music] while you're alive to see it. Be specific, be honest, don't edit yourself. If the list is hard to write, that's the most important information you could have. >> [music] >> You've been so focused on the size of the pot, you've never sat down and written what the pot is for. The list is your compass. Without it, you'll default to accumulation because >> [music] >> that's what your brain already knows.
Move two is to build a spending plan, not a savings plan. Most cash flow planning is still framed [music] as a minimization problem. Flip it. Given the life you're building, what does a deliberately designed spending plan look like? Where is the step up in the go go years? Where are the one off transfers to family at moments that matter the most? That is a harder plan to build. It's also the plan most retirees should have and almost none do. Ask your planner for it. If they don't know what you mean, find one that does.
Move three is to practice spending on something deliberately unnecessary. The move most retirees resist hardest and benefit from most. Pick something this month well within your means, squarely on the do I really need this side of your mental line. Do it anyway. Pay attention to what happens. You enjoy it, the pot remains fine, the sky does not fall, and your nervous system learns through repetition that deploying capital into your own life is not the same thing as losing it. You're retraining the reflex that 40 years installed, same way it was installed, repetition. [music]
And move four is to give now while you're here to watch it land. For those who want to leave meaningful wealth to family, brilliant. Consider this. Giving while you're alive is a fundamentally different gift [music] than giving through probate. Higher compound multiple, more tax efficient post [music] April 2027, and it puts you in a room where the money does its work. If you want to be generous, be generous now. Your children will gain more. You will gain more. And unlike the probate version, you actually get to witness the gift landing. [music]
I want to hold a mirror up briefly because this is the bit where the video either lands or it doesn't. Imagine the version of you that dies at 92. You have lived a full life, the obituary is kind, the family is present, your estate is settled. [music] And your children or your favorite charity or whoever it goes to receives, [music] plausibly for many of you, substantially more money than you had the day you retired. Now ask [music] the hard question. What did the 92-year-old you not do to leave that big number behind? Which trips? [music] Which help for the children while they still needed it? Which shared experiences with your partner? Which version of yourself, which bit of your joy, your generosity, your marriage, your adventure, your life was quietly traded for the larger balance someone else will now inherit? I'm not asking to be cruel. I'm asking because the honest answer for many of the people I work with is a lot. And I did not realize it at the time because [music] the not doing is always quiet and the not doing is always the default and the not doing is what the entire industry [music] called prudent.
Nobody at your funeral is going to admire the balance of your pension. They will remember [music] whether you showed up, whether you were generous, whether you did the trip, whether you made the joyful, slightly silly decisions, whether you actually [music] lived. So, the question, the one I want you to sit with tonight properly [music] with your partner if you have one. If I die today, what would I most regret not [music] having spent the money on? Write whatever comes up. Don't edit, don't justify, don't have your inner advisor in the room. Then, [music] the harder question, what is stopping me doing that? Properly, honestly, this year. For almost all of you, the answer won't be money. You have the money. The answer will [music] be the permission. And permission is not something anyone can hand you, it's something you have to give yourself starting with the first uncomfortable spend in the first uncomfortable week [music] before the part of you that was trying to say no gets another 40 years to keep saying it.
Let me leave you with this. I love my job, genuinely. I get to sit with people in the most important transition [music] of their lives and help them navigate it. But the most frustrating part of the job is watching people who have done everything [music] right, saved, invested, been patient, earned it, step up to the finish line of 40 years of work and [music] then refuse in a thousand small, invisible ways to actually use what [music] they've built. You built this, it's yours. The kids, if you've done the parenting right, will be fine >> [music] >> and their lives will be made by the parent you actually are, not by the size of your bequest. The tax [music] system has joined the case for spending. The research has joined. Your own health span [music] has joined. Your marriage has joined. Your grandchildren have joined, though they won't say it. The only thing still holding you back [music] is the stone age wiring, the decades of conditioning, the cultural voice in the back of your [music] head, and a retirement industry commercially aligned with your continued [music] silence. You are not a scoreboard. You are a life and the life is meant to be lived, not admired from a distance by a man in a suit managing a spreadsheet on your behalf. Spend the bloody money.
If this video has hit hard, good. That means it did its job. Hit the like button, it helps other people like you find this channel. And subscribe if you're not already. Drop me a comment. What is the thing you have quietly been refusing to let yourself spend on? Name it. Just name it. It's the start of the shift and I read [music] every single one. And if you want to understand more, I've got a free are you ready to retire scorecard. The link to take that is in the description. And if you want to chat about your retirement, [music] the link to book a meeting in with me is in that description as well. Thanks for watching. Book the trip and I'll see you in the next one.