Funding Discretionary Spending: EDU #2533
The Retirement and IRA Show
Jim Saulnier, CFP® & Chris Stein, CFP®
4.3 • 729 Ratings
🗓️ 13 August 2025
⏱️ 69 minutes
🧾️ Download transcript
Summary
Chris’s Summary
Jim and I continue discussing funding discretionary spending in Robert Merton’s three bucket retirement income framework from last week’s article, focusing on how his flexible and aspirational spending categories compare with our philosophy. We explore why annuities are insurance products, where TIPS fit into income planning, and why funding Go-Go years demands liquidity and principal protection. The conversation also examines how Minimum Dignity Floor
expenses differ from discretionary goals and why tying those goals to high-risk investments can be problematic.
Jim’s “Pithy” Summary
Chris and I pick up where we left off last week, taking a closer look at Robert Merton’s second and third retirement income “buckets” and how they’re presented in the article we’ve been dissecting. While I can see value in some of the thinking, I have a hard time with the notion that your passions and big adventures should be considered optional spending that you cut when markets turn. These Go-Go years don’t last forever, and I’m not about to tell someone to shelve an elk hunt, delay a trip to see family, or skip the project that brings them joy because of a short-term dip. That’s not my idea of funding discretionary spending.
We also look at the tools Merton and the article highlight for flexible spending—TIPS, for example—and how those compare with keeping your discretionary funds liquid and principal-protected. On paper, some of these options sound flexible, but real life rarely plays out as neatly as a model suggests. If the market timing works against you, that “flexibility” can disappear fast.
Then we’ll get into the aspirational spending—the so-called extras—and the suggestion to tie them to higher-risk assets. We share our thoughts on matching the right investments to the right spending, why emotional comfort matters in retirement planning, and how your Go-Go years deserve a funding approach that lets you enjoy them while you can.
The post Funding Discretionary Spending: EDU #2533 appeared first on The Retirement and IRA Show.
Transcript
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| 0:47.0 | This is the retirement and IRA show coming to you from beautiful Northern Colorado. |
| 0:52.6 | Join us as certified financial planner Jim Solnier, as well as Colorado State University Finance instructor andified Financial Planner Chris Stein teach you about IRAs, |
| 0:58.1 | borrow-en-case, annuities, Social Security, pension plans, and estate planning in a fun and enjoyable show. |
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| 1:10.5 | Jim and Chris want you to know that they're |
| 1:12.4 | available to help you plan for your retirement. Just visit their website at Jimhelps.com. |
| 1:18.3 | That's Jim H-E-L-P-S dot com and click the Meet the Team button on the homepage. Now here's Jim |
| 1:25.5 | and Chris with today's show. |
| 1:33.9 | Well, hello and welcome to the Retirement and IRA show, EDU edition for this week. |
| 1:54.2 | I've got Jim back with us today and this will be either the last or maybe second to the last show in our series that started back in 2008, I believe, at this point, where we're walking everyone through our process and approach and philosophy. |
| 1:57.8 | I know it was in 2008, but it seems like a long time ago. |
| 2:03.3 | I think we started it back in March or April, somewhere in there, took a pause during National Newty Awareness Month, and then we've been kind of sprinkling in shows as we've been |
| 2:10.7 | able to since June. |
| 2:13.9 | And here we are, I think, towards the end. |
| 2:16.5 | So today we're going to talk a little bit about what we call positioning, |
| 2:21.4 | a term that Jim came up with to distinguish it from the more classically understood |
| 2:29.4 | bucketing approach to asset allocation. |
| 2:38.3 | So we'll talk about what are the, what are the differences, |
| 2:46.4 | the nuances. I think you could call them, I don't know, I'm not sure one's an evolution of the other. I think one's the cousin of the other. I'll tell you what I mean when we get to that point. |
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