The depletion of wealth as a problem

It is becoming increasingly evident how disciplined young people are saving money. The prospect of an OASI and a dilapidated BVG pension seems too uncertain to them. This increases the pressure to close any gaps in the third pillar.

Disciplined and long-term securities savings have become widespread, particularly profitable thanks to the effect of compound interest. On the other hand, it has been shown that long-term bank savings cannot even compensate for the loss of purchasing power caused by inflation. And dreamy attempts to save long-term capital using (de facto flimsy) crypto assets have recently suffered a massive setback in reality. But it is not yet known whether the fraud or the disillusionment is greater in this regard.

But saving alone is not enough. From an economic point of view, it is a renunciation of consumption in the present for later use. There is no “fasting for life”. Capital should also be used pleasantly and pleasantly. However, towards the end of the life cycle, a new problem emerges. Older people find it mentally difficult to consume capital. The financial “switch” from capital accumulation to capital reduction is a sticking point that many people are putting off for as long as possible.

So that I am understood correctly: Of course, an emergency help reserve makes sense. But some fear the depletion of capital, as if an avalanche of emergencies is precipitating in their later years. Despite the end of travel restrictions caused by the pandemic, they can no longer even afford holidays, others do without new clothes. The main thing is that the resources remain intact.

Financial planning would help. Once realistic expenses for daily living are recorded, including an apartment or house, leisure and pleasure, it quickly becomes clear how great the potential is to afford something “big” once or twice a year. It can be an expedition on the Hurtigruten (with the revolutionary hybrid drive) or the long-awaited safari in the Serengeti.

Older homeowners usually no longer have a significant mortgage burden. As a result, the property itself becomes the ultimate source of cash, either because you increase the mortgage, or because it is too large and has become too expensive to maintain due to the garden and needs to be sold.

Driven by the fear that the money may not last “in the end”, arguments are sought as to why the capital is not even “occasionally” withdrawn. The ascetics add up everything there is to it: the increased incidental expenses, the runaway health care premiums, the impending rent hikes. And then there’s the former schoolboy who now has to pay so much for the retirement home.

But when I’m bedbound with incontinence at the highest level 4, I realize at the latest that I could and should have afforded a little more in advance – perhaps a safari with the children and grandchildren. They would remember him for the rest of their lives and if they came to see me they would tell me about this fascinating journey. Is this the case even if you stay at home in abstinence and save terribly on everything, capital, experiences and adventures?