if one doesn't have any needs for the extra monies in that particular year, why spend it?
Because money is ALWAYS spent. There's no such thing as "not spending money". The only question is whether it gets spent today or in the future. Whether it gets spent today in a way that you can enjoy the spending (whatever that may mean for you; it does NOT mean "buy more stuff") or whether it gets spent by your heirs when you are dead.
(What follows is 60% a devil's advocate position....stick with me to the end.)
When you take into account things like the time value of money and the joy of seeing it spent while alive as opposed to the much more nebulous "my estate will inherit it and distribute it to my appointed heirs"....it should be clear that, even if you don't personally subscribe it, the idea of "distribute money now instead of later" is a position people can argue credibly.
Keep in mind that for all of us, except in the most dire historical circumstances of all time, we will die with more money than we have today.
To take a simple example: imagine giving $10,000 a year to your children (to help fund a Roth or 529 or just pay down a mortgage faster or whatever; you know your children, I don't) when you are in your 50s (and they are in their 30s) instead of them getting $500,000 as a lump sum when they are 70 (and you passed away in your 90s).
If you do a simple "time value of money" calculation using a discount rate of 3% then it is better to spend/give/burn up $10,000 a year for 30 years than to leave your estate $196,000.
When people say "if I don't have any extra needs why spend it" they usually really mean something "I'd rather save it until I'm nearly dead JUST IN CASE something comes up". And I get that. I do. I'm not a spreadsheet automaton. I have the same fears & paranoias & whatnot as other people. But that's where a good systematic plan comes in. It helps us defeat our behavioural biases.
If my systematic plan says I can spend $80,000 this year and I'm actually only spending $50,000 (including all the wild bucket list vacations I want) then....sure, like you I'm probably not going to spend that $30,000 "just because" some spreadsheet told me to. But I'd have a serious hard look in the mirror and ask myself what exactly I'm saving that money for? If I don't need it today what am I saving it for tomorrow for? Early retirees should recognise this as just another form of "I don't need the money to support my lifestyle, then why am I still working?" question that we all ask ourselves at some point.
So, sure, I probably wouldn't spend all $30,000. But I'd probably meet the spreadsheet halfway and give my brother $15,000 to pay down his mortgage faster or pay for my niece's college tuition for one semester or donate to my nephew's basketball team or donate to the local temple that teaches literacy to orphans.
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