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Listen "Are You Spending Too Little in Retirement?"
Episode Synopsis
Navigating the risks to retirement, maintaining security and transforming your spending strategy from a “save-only” mindset in order to enjoy your retirement.
Today, we’re tackling a question that might surprise many: Are you spending too little in retirement?
Understanding Retirement Spending
Recently, I came across an intriguing article in Barron’s titled “These Retirees Have a Good Problem. They Aren’t Spending Enough.” This piece piqued my interest, and I dove deeper into the study it was based on, conducted by New York Life. For those who might not have access to Barron’s, I’ve linked the study and a similar article available for free from Insurance NewsNet.
The crux of the matter is this: Many retirees have diligently saved throughout their working lives, yet when it comes time to enjoy the fruits of their labor, they hesitate. Economists studying retirement behavior have two major questions:
Why don’t retirees purchase more annuities for guaranteed lifetime income?
Why do so many retirees underspend, even though they have sufficient savings?
The Fear of Outliving Your Money
One significant factor behind this conservative spending is uncertainty about future expenses, particularly healthcare. The study highlighted that only 16% of retirees withdraw regularly from their portfolios, while a staggering 30% don’t touch their savings at all. This cautious approach often stems from a fear of depleting resources prematurely, particularly in the face of potential health issues.
Changing the Spending Mindset
Bill Perkins’ book, “Die With Zero,” offers a compelling perspective on retirement spending. Perkins argues that money represents your life’s effort and energy. If you don’t spend it, you effectively waste those parts of your life. While I don’t fully endorse the notion that unspent money equates to wasted life, it’s essential to remember why you saved in the first place: to enjoy your retirement.
I’ve seen this firsthand with clients. One couple, for instance, would call me around the 25th of each month, asking for small withdrawals to cover their expenses, despite having ample savings. They felt guilty and stressed about depleting their funds. After some discussion, I convinced them to set up a systematic monthly withdrawal, which significantly reduced their anxiety and guilt.
The Comfort of Regular Income
Receiving a consistent monthly payout can be incredibly reassuring. Think about it: during your working years, you received a regular paycheck, which provided financial stability. Replicating this in retirement can alleviate the stress of wondering if you can afford your monthly expenses. It allows you to enjoy your retirement without the constant worry of watching your account balance dwindle.
A quote from the Barron’s article resonates with many retirees: “Getting used to this new pattern of spending… I kind of need permission.” After decades of saving, shifting to a spending mindset feels strange. Saving money felt like a win, so spending it might feel like a loss. However, with proper planning, you can give yourself permission to enjoy the money you’ve saved.
The Role of Insurance
Another significant concern for retirees is the potential cost of long-term care. This worry often leads to under-spending. However, insurance can mitigate these risks. The Employee Benefit Research Institute found that retirees with long-term care insurance spend more annually compared to those without. This insurance provides peace of mind, allowing retirees to spend more freely, knowing they’re covered for potential future expenses.
Planning for a Confident Retirement
Effective retirement planning involves more than just accumulating savings. It’s about creating a strategy that allows you to enjoy your retirement years without fear. This often includes:
Setting up Regular Withdrawals: Mimicking the paycheck cycle from your working years can reduce stress and make spending feel more natural.
Considering Annuities: These can provide a guaranteed income stream, alleviating the fear of outliving your savings.
Incorporating Insurance: Long-term care insurance can help manage the risk of significant healthcare expenses, allowing you to spend more confidently.
Conclusion
The study from New York Life and insights from Bill Perkins both encourage a similar sentiment: you’ve worked hard and saved diligently–now, it’s time to enjoy your retirement with confidence. Don’t let the fear of the unknown prevent you from living your best life.
If you’re looking for more ways to optimize your retirement income, minimize taxes, and avoid common mistakes, visit our website at KeilFP.com. And remember, knowing more about your money leads to feeling better about your money and making better financial decisions.
Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!
Subscribe to Retirement Revealed to get new episodes every Wednesday.
Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337
Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify
Additional Links:
Barron’s article: “These Retirees Have a Good Problem. They Aren’t Spending Enough”
Insurance NewsNet: “The Decumulation Paradox: Why many retirees underspend”
New York Life study “Understanding underspending in retirement: The Decumulation Paradox reexamined”
Employee Benefit Research Institute
Bill Perkins’ “Die With Zero” review from Mr. Retirement: https://www.youtube.com/watch?v=JFAgKDRWdt4
Connect With Jeremy Keil:
Keil Financial Partners
LinkedIn: Jeremy Keil
Facebook: Jeremy Keil
LinkedIn: Keil Financial Partners
YouTube: Retirement Revealed
Book an Intro Call with Jeremy’s Team
===
Disclosures
Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.
All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.
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.
For important disclosures visit: https://keilfp.com/disclosures/
===
Today, we’re tackling a question that might surprise many: Are you spending too little in retirement?
Understanding Retirement Spending
Recently, I came across an intriguing article in Barron’s titled “These Retirees Have a Good Problem. They Aren’t Spending Enough.” This piece piqued my interest, and I dove deeper into the study it was based on, conducted by New York Life. For those who might not have access to Barron’s, I’ve linked the study and a similar article available for free from Insurance NewsNet.
The crux of the matter is this: Many retirees have diligently saved throughout their working lives, yet when it comes time to enjoy the fruits of their labor, they hesitate. Economists studying retirement behavior have two major questions:
Why don’t retirees purchase more annuities for guaranteed lifetime income?
Why do so many retirees underspend, even though they have sufficient savings?
The Fear of Outliving Your Money
One significant factor behind this conservative spending is uncertainty about future expenses, particularly healthcare. The study highlighted that only 16% of retirees withdraw regularly from their portfolios, while a staggering 30% don’t touch their savings at all. This cautious approach often stems from a fear of depleting resources prematurely, particularly in the face of potential health issues.
Changing the Spending Mindset
Bill Perkins’ book, “Die With Zero,” offers a compelling perspective on retirement spending. Perkins argues that money represents your life’s effort and energy. If you don’t spend it, you effectively waste those parts of your life. While I don’t fully endorse the notion that unspent money equates to wasted life, it’s essential to remember why you saved in the first place: to enjoy your retirement.
I’ve seen this firsthand with clients. One couple, for instance, would call me around the 25th of each month, asking for small withdrawals to cover their expenses, despite having ample savings. They felt guilty and stressed about depleting their funds. After some discussion, I convinced them to set up a systematic monthly withdrawal, which significantly reduced their anxiety and guilt.
The Comfort of Regular Income
Receiving a consistent monthly payout can be incredibly reassuring. Think about it: during your working years, you received a regular paycheck, which provided financial stability. Replicating this in retirement can alleviate the stress of wondering if you can afford your monthly expenses. It allows you to enjoy your retirement without the constant worry of watching your account balance dwindle.
A quote from the Barron’s article resonates with many retirees: “Getting used to this new pattern of spending… I kind of need permission.” After decades of saving, shifting to a spending mindset feels strange. Saving money felt like a win, so spending it might feel like a loss. However, with proper planning, you can give yourself permission to enjoy the money you’ve saved.
The Role of Insurance
Another significant concern for retirees is the potential cost of long-term care. This worry often leads to under-spending. However, insurance can mitigate these risks. The Employee Benefit Research Institute found that retirees with long-term care insurance spend more annually compared to those without. This insurance provides peace of mind, allowing retirees to spend more freely, knowing they’re covered for potential future expenses.
Planning for a Confident Retirement
Effective retirement planning involves more than just accumulating savings. It’s about creating a strategy that allows you to enjoy your retirement years without fear. This often includes:
Setting up Regular Withdrawals: Mimicking the paycheck cycle from your working years can reduce stress and make spending feel more natural.
Considering Annuities: These can provide a guaranteed income stream, alleviating the fear of outliving your savings.
Incorporating Insurance: Long-term care insurance can help manage the risk of significant healthcare expenses, allowing you to spend more confidently.
Conclusion
The study from New York Life and insights from Bill Perkins both encourage a similar sentiment: you’ve worked hard and saved diligently–now, it’s time to enjoy your retirement with confidence. Don’t let the fear of the unknown prevent you from living your best life.
If you’re looking for more ways to optimize your retirement income, minimize taxes, and avoid common mistakes, visit our website at KeilFP.com. And remember, knowing more about your money leads to feeling better about your money and making better financial decisions.
Don’t forget to leave a rating for the “Retirement Revealed” podcast if you’ve been enjoying these episodes!
Subscribe to Retirement Revealed to get new episodes every Wednesday.
Apple Podcasts: https://podcasts.apple.com/us/podcast/retirement-revealed/id1488769337
Spotify Podcasts: https://bit.ly/RetirementRevealedSpotify
Additional Links:
Barron’s article: “These Retirees Have a Good Problem. They Aren’t Spending Enough”
Insurance NewsNet: “The Decumulation Paradox: Why many retirees underspend”
New York Life study “Understanding underspending in retirement: The Decumulation Paradox reexamined”
Employee Benefit Research Institute
Bill Perkins’ “Die With Zero” review from Mr. Retirement: https://www.youtube.com/watch?v=JFAgKDRWdt4
Connect With Jeremy Keil:
Keil Financial Partners
LinkedIn: Jeremy Keil
Facebook: Jeremy Keil
LinkedIn: Keil Financial Partners
YouTube: Retirement Revealed
Book an Intro Call with Jeremy’s Team
===
Disclosures
Videos/Podcasts/Blogs (media) published prior to June 30, 2025, were recorded and approved while the advisor was affiliated with Thrivent Advisor Network. These media reflect the advisor’s views and interpretations at that time. The information and disclosures contained in those media were believed to be accurate and complete as of the date of recording, but may not reflect current market conditions or Alongside, LLC, policies.
All content is provided for educational purposes only and does not constitute personalized investment advice. Read below for current disclosures and potential conflicts of interest.
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.
For important disclosures visit: https://keilfp.com/disclosures/
===
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