The Business Dictionary defines wealth as: “Tangible or intangible things that makes a person, family, or group better off.”

When building a financial plan for my clients, our main goal is that they pursue their own path to wealth. Each person/couple/family have their own ideas: fun cars, lots of vacations, or paid-off mortgages while knowing they have enough income to last their lifetimes (just to name a few things that make some people feel wealthy).

The specific area of wealth pursuit with financial planning I’d liked to focus on today is your spending plan for your ‘wealthy retirement.’ That is, how much do you plan to spend on the things you love such as vacationing and dining out, and how much must you spend on necessities like eating and housing. Think of this as spending for things you want versus the things you need.

Paying your electric bill, your mortgage (if you still have one), your taxes, your groceries and other Basic Expenses don’t make many people feel wealthy. They’re the things we need. You might not feel wealthy if these were your focus.

Alternatively, there are many ways to spend so that we could choose how much and how often we may spend, typically referred to as Discretionary Spending. These are the things we want and make us feel wealthy when we partake. Spending on wants may include: dining out, giving gifts, getting a mani/pedi, hair care, donating, vacationing or pursuing hobbies. Some readers may quibble that a couple of these items are really Basic Expenses, such as hair salon expense (really basic for me).

The pursuit of wealth in financial planning is to maximize the amount of income available for the things we want beyond only enough income for our needs. In financial planning, we strive to ensure the possibility of sufficient funds for the fun things so there’s enough to live comfortably, even if there are some negative surprises (think Great Recession) along the way. Many people live 20 to 30 years in retirement, so we’ll want some room for lots of fun things for many years in a row while knowing there are probably a few recessions along the way.

Ideally, we want enough income to support all of our needs with significant leftover to spend on our wants. Our sources of retirement income combine Social Security, Pensions (for those lucky enough to have one), and income properties, plus the income from our retirement savings, all while never running out of money for as long as we live. The satisfaction that comes from knowing you have enough income to do fun things is one of the intangible things that make us feel wealthy.

Additional sources of retirement income can include running a small business. Some people start a business in retirement to augment their income, stay active and remain relevant, while others are in it for the tax deductions. Perhaps you want your hobby to blossom. Many people who already have a business may decide to semi-retire. That is, work fewer hours, take more time for vacations and hand off day-to-day responsibilities while still taking income.

So, if you want to feel wealthy in retirement, plan your retirement to include plenty of discretionary spending. That is, enough income for your wants and non-essential (fun) purchases such as vacations, dining out, second homes or whatever makes you feel wealthy.

Does your financial plan include having ‘extra money’ for fun? Does it include enough retirement income to live how and where you want? If you’re not sure, or just want a second opinion, let’s build your financial plan together. I’ll help you form a plan that pursues wealth and works toward never running out of money.

Merra Lee Moffitt, CERTIFIED FINANCIAL PLANNER™ Professional (CFP®), is a Senior Partner at Good Life Financial Group, Wyomissing. She loves helping families create and pursue their own unique financial plan towards a wealthy retirement. She helps her clients keep work/family balance while they seek financial success. It’s part of her financial planning process. A recognized source on Pennsylvania business issues call, click or contact Merra Lee at 610-628-2055, one the web at MerraLee.net, or by email at merralee.moffitt@lpl.com.