Suzanne Woolley at Bloomberg reported on retirees who have saved enough but still can't bring themselves to spend on enjoyment, and quoted me on why.
A recent Prudential Financial survey found that more than six in ten retirees with $500,000 or more in investable assets are not comfortable spending on pleasure. A separate TIAA survey of 1,000 people found that more than half named running out of money before they die as their biggest retirement worry. Prudential's David Blanchett described it as people weighing the fear of missing out on retirement against the fear of running out of money.
My contribution was the psychology. Spending down savings you worked decades to build triggers something closer to loss aversion than logic. For most of their working lives the job was saving, and few retirees were ever handed a plan for the next job, which is turning those savings into spending they can actually use.
I see this as a planning gap more than a character flaw. Without a number, every purchase feels like a withdrawal from a fund that might run dry. With a spending number, a trip becomes a line item. That number depends on how much you spend each year and from which accounts, what you set aside for down markets, and how taxes, Social Security timing and healthcare costs move it over time.
Read the full article at Bloomberg →
