Disposing is the term commonly used to describe the activity of those people beginning to spend their wealth in their retirement years. This term comes from the idea that the people are 'disposing' of their money; they are effectively getting rid of it before the time of their death. Of course, they are doing so in a way that will benefit them. Many of those who have been recently retired spend their wealth going on luxury holidays, buying an apartment abroad or going on outings with the grandchildren.
• Why dispose?
The main reason people seek to dispose is so they can enjoy their remaining years as much as possible. If they have built up a store of wealth, they see it as their right to spend the money and enjoy it. After all, they have spent many years working hard to earn it. They will want to do this in their early retirement years, as later on they are more likely to contract illness or disability. In addition, people seek to dispose due to the high levels of inheritance tax in place, particularly on high earners. Rather than seeing a large proportion of their savings go to the government, they spend it as they see fit while they can.
• How disposing can benefit the economy - or not
Although disposing does, to an extent, deny the government of tax revenue, it can be beneficial to the economy in various ways. If people dispose by spending money on US goods and services, as they often do, there is an increase in consumption; businesses and firms benefit from this. However, if money is invested abroad, the US economy loses out as money is leaking out. There is very little the US can do about this besides raising trade barriers (which it is thoroughly against doing) and making US products more attractive to disposers.
• Why dispose?
The main reason people seek to dispose is so they can enjoy their remaining years as much as possible. If they have built up a store of wealth, they see it as their right to spend the money and enjoy it. After all, they have spent many years working hard to earn it. They will want to do this in their early retirement years, as later on they are more likely to contract illness or disability. In addition, people seek to dispose due to the high levels of inheritance tax in place, particularly on high earners. Rather than seeing a large proportion of their savings go to the government, they spend it as they see fit while they can.
• How disposing can benefit the economy - or not
Although disposing does, to an extent, deny the government of tax revenue, it can be beneficial to the economy in various ways. If people dispose by spending money on US goods and services, as they often do, there is an increase in consumption; businesses and firms benefit from this. However, if money is invested abroad, the US economy loses out as money is leaking out. There is very little the US can do about this besides raising trade barriers (which it is thoroughly against doing) and making US products more attractive to disposers.
