You spent 30 years putting money into your 401(k). Now the plan says to start taking it out, and every withdrawal feels like a step backward.
The fear of spending money in retirement is common, and research shows it leaves real money unspent. Couples at 65 withdraw about 2% of their savings a year, about half the 4% rule’s starting rate. A written spending plan and a steady income floor are what make spending feel safe.
Why Are Retirees Afraid to Spend Their Savings?
Retirees are afraid to spend their savings because decades of habit taught them to protect the balance. For 30 or 40 years, a growing account meant you were on track. A shrinking one can feel like failure, even when the shrinking is the plan.
Only 28% of pre-retirees and retirees are comfortable with the idea of their retirement savings declining to cover living expenses. That’s from a 2026 Corebridge Financial survey of 2,210 adults ages 45 to 79 with at least $100,000 invested.
The worries behind the fear are concrete. No paycheck refills the account. Nobody knows how long they’ll live. Markets fall, and health costs can climb fast. The biggest worry for most people is running out of money in retirement.
Are Retirees Spending Too Little in Retirement?
Many retirees spend too little in retirement, based on decades of household data. David Blanchett and Michael Finke studied households in the Health and Retirement Study. Retirees treated income and savings as two kinds of money. On average, they spent about 80% of their lifetime income from Social Security, pensions, and annuities. They took far less from savings.
EBRI found the same pattern in 2018. Wealthier retirees and retirees with pensions drew down the least.
The habit doesn’t fade with age. In a 2026 study, Blanchett found that inflation-adjusted spending tends to fall over time, even among retirees who could afford more.
What Research Shows About Retiree Spending
| Study | Who it looked at | What it found |
|---|---|---|
| Blanchett and Finke (2025) | Retiree households in the Health and Retirement Study, 2000 to 2018 | Spent about 80% of lifetime income; 65-year-old couples withdrew about 2% of savings a year |
| EBRI Issue Brief 447 (2018) | Retirees who started with $500,000 or more in non-housing assets | Median spend-down of 11.8% in about two decades |
| EBRI Issue Brief 447 (2018) | Retirees with and without a pension | Median assets fell 4% with a pension and 34% without one in the first 18 years |
| Blanchett and Finke (2024) | Households with at least $100,000 in assets | Spent about twice as much a year from guaranteed income as from the same amount in investments |
Source: Blanchett and Finke, “Retirees Spend Lifetime Income, Not Savings,” Financial Planning Review (2025), and “Guaranteed Income: A License to Spend,” Retirement Income Institute (2024), both using Health and Retirement Study data; EBRI Issue Brief 447, April 2018.
Underspending has a cost. It can mean trips you put off until your health makes them harder. It can mean help for your kids that arrives after they needed it most, or an estate far larger than you meant to leave. If a large estate is your goal, plan for it on purpose. The trouble starts when you drift into it because spending felt unsafe.
When Is the Fear of Spending Justified?
The fear of spending is justified when your spending and your savings don’t line up. Watch for three signs. You don’t have a written plan, your withdrawals run well above a safe rate, or you haven’t planned for long-term care.
Morningstar’s 2026 research puts a safe starting withdrawal rate at 3.9% for fixed spending. Retirees willing to adjust spending with markets could start as high as 5.7%.
Someone turning 65 today has almost a 70% chance of needing some type of long-term care. That’s according to the federal Administration for Community Living. If long-term care isn’t in your plan yet, caution makes sense until it is.
How Do You Get Comfortable Spending Money in Retirement?
Getting comfortable spending money in retirement starts with a number you trust and a way to adjust it. These steps help you spend down retirement savings without guessing.
Build a Spending Plan
Split your budget into must-spend and like-to-spend. Must-spend covers housing, food, insurance, and taxes. Like-to-spend covers travel, dining, hobbies, and gifts. A retirement spending plan built this way shows which costs your income has to cover and which ones can flex.
Spend More in Your Active Years
Spending in most households doesn’t stay flat for 30 years. It runs higher in the early, active years and eases later. Mapping your budget to those phases lets you travel in your 60s without assuming that pace for three decades.
Set Guardrails
Guardrails are rules for when to cut back and when to give yourself a raise. If a bad market pushes your withdrawal rate above your upper limit, you trim spending. If a good one pulls it below your lower limit, you spend more. A guardrails strategy can start at a higher withdrawal rate than the 4% rule because it adjusts along the way.
Pay Yourself a Monthly Paycheck
Set up a fixed transfer from savings to checking each month. A regular deposit feels like income, and retirees are quicker to spend income than savings.
Ease Into It
Pick one category that matters to you, such as travel or time with grandkids, and raise it for a year. See how the plan holds up, then decide on the next step. Moving from a saving to a spending mindset takes practice for most people. A gradual transition into retirement gives you the same room on the work side.
Does Guaranteed Income Make It Easier to Spend?
Guaranteed income makes it easier to spend, according to Blanchett and Finke. In their 2024 study, retirees spent about twice as much a year from guaranteed income as from the same amount invested.
You can widen your income floor in three ways:
- Delay Social Security. Your benefit grows 8% a year past full retirement age until 70, and claiming later raises the check for life.
- Buy a lifetime annuity. You trade a lump sum for monthly income for life, at the cost of access to that money. Weigh the pros and cons of annuities, and estimate the payment with a lifetime annuity calculator.
- Take a pension as monthly income if your plan gives you the choice.
Blanchett and Finke found evidence that required minimum distributions push retirees to spend more from their tax-deferred accounts. A scheduled withdrawal starts to feel like income.
Does a Written Plan Make Spending Easier?
A written plan makes spending easier, based on the Corebridge survey. People with a plan for drawing down their savings were about twice as likely to feel highly confident. Only 29% of pre-retirees 55 and older had a plan for their withdrawals.
Confidence With and Without a Plan
| Highly confident | With a plan | Without one |
|---|---|---|
| Pre-retirees 55 and older (withdrawal plan) | 57% | 26% |
| Retirees (spending plan) | 55% | 29% |
Source: Corebridge Financial, June 2026. Greenwald Research surveyed 2,210 adults ages 45 to 79 with $100,000 or more in investable assets, October 14 to November 3, 2025.
The Boldin Planner projects your spending, income, and savings year by year. You can add Social Security, pensions, and annuities as income, including a future annuity purchase, and see the effect before you buy. Your plan also shows a Retirement Chance of Success score, based on 1,000 simulated market scenarios.
PlannerPlus adds the Monte Carlo Explorer and the Detailed Budgeter, with separate Must Spend and Like to Spend budgets. It also lets you save up to nine scenarios beside your baseline and compare three side by side. Try a bigger travel budget in your 60s and see whether the plan holds.
If you’d like a second opinion, Boldin Advisors offers fee-only planning with CERTIFIED FINANCIAL PLANNER™ professionals.
What Retirement Spending Brings the Most Satisfaction?
Experiences tend to bring longer-lasting satisfaction than things. Cornell psychologist Thomas Gilovich has studied money and happiness for decades. He put it this way: “We buy things to make us happy, and we succeed. But only for a while.”
Retirement gives you time, and money spent on how you use it tends to pay off. Think trips, classes, a new hobby, or long visits with family.
A sense of purpose in retirement makes spending easier too. Money spent on a goal you care about feels like progress.
Giving while you’re alive counts. Helping a child with a down payment or paying for a grandchild’s camp lets you see the money land.
Fear of Spending Money in Retirement FAQs
Why are retirees afraid to spend money?
Retirees are afraid to spend money because a falling balance can look like a loss with no way to make it back. Without a paycheck, each withdrawal feels permanent. Unknowns about lifespan, markets, and healthcare add to it. A plan that shows how long your savings last answers most of those questions.
Do most retirees spend too little?
Many retirees spend less than their savings could support. EBRI found that retirees with $500,000 or more in non-housing assets at the start had spent a median of 11.8% of it in about two decades. Retirees with pensions spent down even less. In both groups, most of the money they saved was still in place.
How do I feel comfortable spending money in retirement?
Comfort with spending money in retirement often starts with routine. An automatic deposit on the same day each month makes your savings behave like the paycheck you had at work. Set the amount from a projection of how long your savings last, then revisit it once a year as markets and plans change.
How much of my savings can I spend each year in retirement?
The amount you can spend from savings each year depends on your age, your other income, and how flexible your spending is. Morningstar’s 2026 research suggests about 3.9% of your starting balance for fixed spending that rises with inflation. Retirees who cut back after bad market years can start higher. A personal projection beats any single rule.
Does an annuity help retirees spend more?
An annuity can help retirees spend more because it turns a lump sum into income that lasts for life. Studies of retiree spending find that a monthly check gets spent with less hesitation than a balance does. The trade-offs include less access to that money, less to leave heirs, and payments that may not keep up with inflation.
Is it normal to feel anxious about drawing down retirement savings?
Anxiety about drawing down retirement savings is common among new retirees. It often comes from decades of saving habits more than from the numbers. Checking your plan once a year keeps attention on whether spending is on track. Watching your balance every day tends to feed the worry instead.
