{"id":13642,"date":"2025-01-29T15:06:33","date_gmt":"2025-01-29T15:06:33","guid":{"rendered":"https:\/\/zacksim.com\/blog\/?p=13642"},"modified":"2025-01-29T15:06:34","modified_gmt":"2025-01-29T15:06:34","slug":"fear-of-spending-in-retirement","status":"publish","type":"post","link":"https:\/\/zacksim.com\/blog\/fear-of-spending-in-retirement\/","title":{"rendered":"Fear of Spending in Retirement"},"content":{"rendered":"\n<p><em>Toni F. from San Antonio, TX asks: <\/em>Hello Mitch, I\u2019ve been retired for a few years now. I\u2019ve noticed something about myself as I think about my nest egg and the future, which is: that I seem to be very reluctant to spend! I\u2019m worried as I\u2019m sure many retirees are about running out of money, living too long, needing a lot of medical care later in life, etc. Do you have any advice for retirees about these types of concerns? Thank you.<\/p>\n\n\n\n<p><strong>Mitch\u2019s Response:<\/strong><\/p>\n\n\n\n<p>Thanks for writing, Toni, and you\u2019re absolutely right \u2013 many retirees (especially the newly retired) often grapple with \u2018feeling good\u2019 about spending some of their hard-earned savings. The worry you\u2019re feeling is quite normal.<\/p>\n\n\n\n<p>One of the foremost thinkers on the psychology of money, Meir Statman of Santa Clara University, says that fear is the key reason folks become so reluctant to spend retirement savings. Fear sets in at the moment when retirees finally \u201chave the time and the money and wisdom to enjoy their lives in a way they never could before.\u201d<sup>1<\/sup><\/p>\n\n\n\n<p><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\">Tips on Spending Money During Retirement<\/a><\/u><\/strong><\/p>\n\n\n\n<p>Retirement means living the life you want, in the place you want, with activities you enjoy. Of course, making all that happen means spending some of the money you\u2019ve worked so hard to accumulate.<\/p>\n\n\n\n<p>If you want to ensure your money will last, it&#8217;s essential to understand some strategies and best practices. Our free guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\">4 Strategies for Spending Money in Retirement<sup>2<\/sup><\/a><\/u><\/em><\/strong> offers some guidelines to help ensure your retirement nest egg lasts as long as possible. You\u2019ll also get insight on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Spending 101: Understanding Tax Buckets<\/li>\n\n\n\n<li>The 4% Rule<\/li>\n\n\n\n<li>Dynamic Spending with the 5% Rule<\/li>\n\n\n\n<li>And more\u2026<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest, download our guide <em>4 Strategies for Spending Money in Retirement<\/em>.<sup>2<\/sup>\u00a0Simply click on the link below to get your copy today!<br>\u00a0<br><strong><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\">Download Zacks Guide, <em>4 Strategies for Spending Money in Retirement<sup>2<\/sup><\/em><\/a><\/u><\/strong><\/p>\n\n\n\n<p>Part of this reluctance is learned behavior. Consider that you\u2019ve spent decades saving money and investing to reach this point. In a sense, your brain may be somewhat hard-wired to view saving as good and spending as bad, which makes doling out money for a second home or a vacation especially challenging. According to Statman, taking money out of your retirement accounts can feel just as painful as watching your account value decline with market volatility or a downturn. So again, what you\u2019re experiencing is understandable.<\/p>\n\n\n\n<p>As for the advice portion of your question, I think the first step is to work with a financial advisor to do some cash flow modeling and to run scenarios for how your investment portfolio and liquid net worth will hold up against various return outcomes\u2014and over an extended time horizon. If you\u2019re in good health, I would not hesitate to assume you\u2019ll live to be 100, which will help you build in conservative estimates into your projections.<\/p>\n\n\n\n<p>Another good piece of advice, in my view, is to allocate your fixed cash flow sources\u2014like Social Security, pensions, fixed annuities, etc.\u2014to your everyday needs. These would include food, mortgage\/rent, utilities, and healthcare. Once you \u2018cover your bases\u2019 with a reliable source of income, you can start to think more about discretionary spending.<\/p>\n\n\n\n<p>I think it\u2019s important to outline your retirement goals, whether that be traveling or helping kids and grandkids, and match these against the level of cash flow your investment portfolio can provide you over a 30+ year time horizon. The goal would be to ensure that your savings could withstand even the worst 30-year period in U.S. economic and market history, which you can learn from simulations that account for volatile returns and annual withdrawals. In nearly all cases, having a more than 50% allocation to U.S. equities and withdrawing 3% to 4% of your portfolio each year would mean you\u2019d still have money left over after 30 years.<\/p>\n\n\n\n<p>Today, I am offering our exclusive guide, <strong><em><u><a href=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\" data-type=\"link\" data-id=\"https:\/\/go.steadyinvestor.com\/arrow-spending-in-retirement-guide?source=zim&amp;medium=blog&amp;term=steadyinvestor_spending_in_retirement_zim_01_30_2025&amp;content=spending_in_retirement\">4 Strategies for Spending Money in Retirement<sup>3<\/sup><\/a>,<\/u><\/em><\/strong> to all Mitch\u2019s Mailbox readers. In this guide, we explore some effective strategies and best practices that investors should consider when developing a retirement spending plan. You\u2019ll get insight on:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Spending 101: Understanding Tax Buckets<\/li>\n\n\n\n<li>The 4% Rule<\/li>\n\n\n\n<li>Dynamic Spending with the 5% Rule<\/li>\n\n\n\n<li>And more\u2026<\/li>\n<\/ul>\n\n\n\n<p>If you have $500,000 or more to invest and are ready to learn more, click on the link below to get your copy today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>It&#8217;s common for retirees to feel anxious about spending too much of their retirement savings. Mitch discusses how planning can help you overcome this fear.<\/p>\n","protected":false},"author":3,"featured_media":13575,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-13642","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized"],"acf":[],"_links":{"self":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13642","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/comments?post=13642"}],"version-history":[{"count":1,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13642\/revisions"}],"predecessor-version":[{"id":13643,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/posts\/13642\/revisions\/13643"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media\/13575"}],"wp:attachment":[{"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/media?parent=13642"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/categories?post=13642"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/zacksim.com\/blog\/wp-json\/wp\/v2\/tags?post=13642"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}