Why Spending in Retirement is Often Harder than Saving

Understanding the challenges of transitioning from saver to spender in retirement and identifying strategies to make the mindset shift successful.

Most people spend their entire adult lives learning one financial habit: save.

Contribute to your 401(k). Max out your IRA. Build an emergency fund. Pay off debt. Live below your means. After decades of following those principles, many people arrive at retirement with something they’ve worked incredibly hard to achieve—a healthy nest egg.

Then, almost overnight, the rules change.

Instead of saving, you’re expected to start spending.

That transition sounds simple in theory, but in my experience, it’s one of the most difficult adjustments retirees face. In a recent Retire Today podcast, I explored why spending in retirement is often harder than saving for it, drawing on research from retirement experts, an article by Diane Harris in Kiplinger, and stories from clients I’ve worked with throughout my career.

The Fear That Keeps Retirees From Enjoying Retirement

Many retirees aren’t afraid of spending money because they’re careless.

They’re afraid because they’re responsible.

After all, retirement introduces a number of uncertainties. No one knows exactly how long they’ll live, what healthcare costs they’ll face, whether inflation will remain elevated, or how the markets will perform over the next twenty or thirty years. Faced with those unknowns, it feels prudent to spend less than you can afford.

That fear has a name.

While many people have heard of FOMO—the fear of missing out—retirement researchers have begun talking about FORO: the fear of running out.

It’s a perfectly understandable concern.

The problem is that fear can become so powerful that retirees begin protecting money they no longer need to protect.

Saving Isn’t the Goal Anymore

One of the ideas I discuss frequently with clients is matching solutions to risks.

If you’re worried about living longer than expected, simply accumulating more cash may not be the best answer. Increasing guaranteed lifetime income through strategies like delaying Social Security or considering other lifetime income solutions may address that concern more directly.

If you’re worried about long-term care, insurance may be a more appropriate solution than simply refusing to spend your savings.

If you’re concerned about market volatility, a diversified portfolio and an appropriate income strategy often provide more confidence than leaving every dollar untouched.

The point isn’t that these risks disappear.

It’s that retirement planning works best when we address specific risks with specific solutions instead of allowing one generalized fear to dictate every financial decision.

Two Retirees. Two Different Mindsets.

Over the years, I’ve worked with two widows who illustrate this difference remarkably well.

Jean and her husband had accumulated more than a million dollars. One day she told me she was selling the family cabin because maintaining the property had become too difficult. She loved the cabin. Her children loved the cabin. It was where the family gathered and created memories together.

When I asked whether she had considered hiring someone to shovel snow or clean the gutters, she immediately dismissed the idea.

“I couldn’t possibly spend money on that.”

From her perspective, she wasn’t someone who spent money.

She was a saver.

So instead of spending a relatively small amount each year to preserve something deeply meaningful, she sold it altogether.

Jane had accumulated a similar amount of wealth after losing her husband, but her perspective was different. She didn’t see herself primarily as a saver.

She saw herself as a planner.

She and her husband had built their retirement plan with the expectation that one day they would use those savings. As a result, Jane felt comfortable spending money on experiences with her children and grandchildren, traveling together, and creating memories they had planned for years earlier.

Their financial situations were remarkably similar.

Their mindsets were not.

You’re Not a Saver. You’re a Planner.

This may be the most important mindset shift retirees can make.

If you’ve successfully saved for retirement, it’s easy to think, “I’m a saver.”

But that’s only part of the story.

The real skill you’ve developed over decades isn’t saving.

It’s planning.

Saving was simply the strategy your plan required during your working years.

Retirement calls for a different strategy.

Now your plan requires thoughtful spending.

You’re still the same disciplined planner.

The tactics have simply changed.

Why Retirees Spend Social Security More Easily Than Savings

Research cited in the Kiplinger article points to an interesting behavioral pattern.

People are generally comfortable spending income that arrives automatically through Social Security, pensions, or annuities. But when they have to transfer money from investment accounts into checking, many become reluctant—even if they’ve already determined they can safely afford the withdrawals.

I saw this firsthand with a client named Steve.

Steve retired with about $500,000 in savings, along with Social Security and a pension. Every month he insisted he didn’t need additional withdrawals from his investment accounts. Yet almost every month he would call because a car repair, dental bill, vacation, or another expense had stretched his checking account just a little too far.

Eventually, after months of encouraging him, we established an automatic monthly distribution from his investment portfolio.

The amount was almost identical to what he had already been withdrawing sporadically.

The difference wasn’t mathematical.

It was psychological.

Instead of feeling like he was taking money away from his savings every time an expense arose, he received a predictable monthly deposit that felt much more like the paycheck he’d lived on throughout his career.

And something else changed.

He stopped worrying.

Spend With Purpose, Not Guilt

One of my favorite ideas discussed in Morgan Housel’s The Art of Spending Money is that the goal isn’t simply to spend more or save more.

It’s to minimize future regret.

When you look back on retirement, what will matter most?

Will it be having an extra $20,000 sitting in an investment account?

Or will it be the family vacation you took, the grandchildren you helped, the experiences you shared, and the memories you created?

Every retiree will answer that question differently.

But it’s a question worth asking before fear quietly makes the decision for you.

The Bottom Line

Saving for retirement takes discipline.

Spending in retirement takes confidence.

That confidence doesn’t come from guessing. It comes from having a plan that addresses the risks you’re concerned about and gives you permission to use the resources you’ve spent decades building.

After all, the purpose of retirement isn’t to finish life with the largest account balance possible.

It’s to use your financial resources to create a retirement with fewer regrets, greater meaning, and the freedom you’ve worked so hard to earn.

Don’t forget to leave a rating for the “Retire Today” podcast if you’ve been enjoying these episodes!

Subscribe to Retire Today to get new episodes every Wednesday.

Apple Podcasts: https://podcasts.apple.com/us/podcast/retire-today/id1488769337 

Spotify Podcasts: https://bit.ly/RetireTodaySpotify

---

About the Author:

Jeremy Keil, CFP^®, CFA is a retirement financial advisor with Keil Financial Partners, author of Retire Today: Create Your Retirement Income Plan in 5 Simple Steps, and host of the Retirement Today blog and podcast, as well as the Mr. Retirement YouTube channel.

Jeremy is a contributor to Kiplinger and is frequently cited in publications like the Wall Street Journal and New York Times.

---

Additional Links:

• Buy Jeremy’s book – Retire Today: Create Your Retirement Master Plan in 5 Simple Steps
• “Is Your Retirement Facing a Midlife Crisis? With David Blanchett” Mr. Retirement YouTube Channel
• 5StepRetirementPlan.com
• “Retirement Planning Books to Read in 2026 (by Goal and Stage of Retirement)” KeilFP.com 
• “Is Your Retirement Facing a Midlife Crisis? With David Blanchett” Mr. Retirement YouTube Channel 
• “The Art of Spending Money: Simple Choices for a Richer Life” by Morgan Housel
• “Master the Art of Spending in Retirement” by Diane Harris, Kiplinger Magazine

Connect With Jeremy Keil:

• Keil Financial Partners
• LinkedIn: Jeremy Keil
• Facebook: Jeremy Keil
• LinkedIn: Keil Financial Partners
• YouTube: Mr. Retirement
• Book an Intro Call with Jeremy’s Team

Media Disclosures:

Disclosures

This media is provided for informational and educational purposes only and does not consider the investment objectives, financial situation, or particular needs of any consumer. Nothing in this program should be construed as investment, legal, or tax advice, nor as a recommendation to buy, sell, or hold any security or to adopt any investment strategy.

The views and opinions expressed are those of the host and any guest, current as of the date of recording, and may change without notice as market, political or economic conditions evolve. All investments involve risk, including the possible loss of principal. Past performance is no guarantee of future results.

Legal & Tax Disclosure

Consumers should consult their own qualified attorney, CPA, or other professional advisor regarding their specific legal and tax situations.

Advisor Disclosures

Alongside, LLC, doing business as Keil Financial Partners, is an SEC-registered investment adviser. Registration does not imply a certain level of skill or expertise. Advisory services are delivered through the Alongside, LLC platform. Keil Financial Partners is independent, not owned or operated by Alongside, LLC.

Additional information about Alongside, LLC – including its services, fees and any material conflicts of interest – can be found at https://adviserinfo.sec.gov/firm/summary/333587 or by requesting Form ADV Part 2A.

The content of this media should not be reproduced or redistributed without the firm’s written consent. Any trademarks or service marks mentioned belong to their respective owners and are used for identification purposes only.

Additional Important Disclosures