Retirees spent their lives saving. Now they’re afraid to spend

PERSONAL FINANCE
Retirement & Pension

Retirees spent their lives saving. Now they’re afraid to spend

American workers are consistently encouraged to spend their entire careers accumulating funds for retirement, building a nest egg they are taught not to touch.

Once that career concludes, retirees are expected to finally tap into those savings and begin drawing them down.

For a significant number of Americans, however, shifting from a mindset of saving to one of spending is not an easy task.

In a recent survey conducted by Allianz Life, 39% of retirees admitted they are hesitant to spend their retirement savings. Furthermore, 71% of working-age Americans indicated they expect to feel reluctant about spending their retirement funds when the time eventually arrives.

Financial advisers note that a major component of their work involves convincing clients—even those with substantial wealth—to actually utilize their savings during retirement.

“It’s hard to get somebody to even go out and spend five dollars for a cup of coffee at 7-Eleven when they’re so used to saving everything,” said Melissa Cox, a certified financial planner in Dallas.

Cox noted that “about half” of her clients find it difficult to spend their retirement nest eggs.

“One of my favorite clients, I am literally begging him to spend money,” she said. “He won’t go on vacation, which he desperately needs.”

For retirees, the transition from saving to spending can be scary

Financial advisers often view retirement planning as two distinct acts. The first is the “accumulation” phase, during which Americans earn income, manage investments, and grow their savingss and similar accounts. The second is the “distribution” phase, where the retiree begins spending those accumulated funds

For many retirees, this shift is intimidating.

“We’re all accustomed to spending our paychecks, but we’re not accustomed to spending our retirement savings,” said Jonathan Swanburg, a certified financial planner in Houston. “If you watch your portfolio go down, it can be a very stressful thing.”

Retirees must adjust to a new reality where their income is largely outside of their control. During their working years, individuals can typically handle unexpected financial burdens or major purchases by negotiating a raise or seeking a higher-paying position. Retirement income, by contrast, is usually fixed.

“The only thing you can really control at that point is your spending,” said Peter Lazaroff, a certified financial planner in St. Louis who has a forthcoming book on investing.

‘I over-analyze every major purchase’

Gerry Elam, 68, of Opelika, Alabama, retired early from his position at General Electric during the pandemic-era downsizing in 2020. Elam had always lived below his means, and his financial planner confirmed he had more than enough capital to retire. The primary challenge, he explained, was learning how to spend it.

“I think the biggest change for me is going from saver to spender,” he said. “I over-analyze every major purchase, and by major, I mean over a couple hundred dollars.”

The most disciplined retirement savers can often be the least effective retirement spenders, Lazaroff observed.

“People who build up a sizeable portfolio over their lifetimes are good savers,” he said. “And good savers, almost by definition, are bad spenders. They’re not good at seeing money go out the door.”

Part of the challenge, Lazaroff explained, is the “mindset adjustment” required to accept that retirement savings are no longer off-limits.

Retirees fear outliving their money, and with good reason

Retirees also harbor legitimate concerns about exhausting their funds, a prospect many Americans claim to fear more than death itself.

“It’s absolutely the number one fear of people headed toward retirement,” said Kelly LaVigne, vice president of consumer insights at Allianz.

The Allianz Center for the Future of Retirement published its 2026 Annual Retirement Study in July.

“I get it that you don’t want to run out of money,” LaVigne said. “But you also don’t want to put off things that are really worth it to you.”

Lazaroff observes retired clients grappling with competing risks. One is the danger of running out of money due to overspending. The other is the risk of living—or dying—with regret because they spent too little.

“If all you do is worry about running out of money, you’re not going to spend enough, and you’re going to end up dying with regret,” he said.

Out of fear that they might overspend, a retiree might hesitate to pursue a bucket-list goal, such as taking a long-delayed vacation or flying first class.

“If you were in the working world, you probably held off on taking that trip because it was too expensive,” Swanburg said. In retirement, “you’ve lost that paycheck, and now you’re trying to take this trip that is really, really expensive.”