Podcasts Business Retirement Starts Today Retirees Arent Spending Enough, Ep #231

Retirees Arent Spending Enough, Ep #231

Published: Feb. 14, 2022, 9 a.m.

You may be worried about money in retirement, but are you worried that you won\u2019t spend enough of it? Today\u2019s retirement headline comes from Neil Templin over at\xa0Barrons.com\xa0and it examines how people\u2019s core spending and saving habits from their working years continue in their retirement years.\xa0

Listen to this episode to hear the author\u2019s suggestion for how to rectify this issue and whether or not I agree with him.\xa0

Outline of This Episode
  • [1:22] Retirees aren\u2019t spending enough
  • [5:30] Create a retirement paycheck
  • [7:20] My thoughts on the article
  • [10:00] join the newsletter
  • [11:07] How to invest for retirement with limited assets
Retirees aren\u2019t spending enough

Why do people continue to save in retirement when they are expected to be spending?\xa0Retirees Aren\u2019t Spending Enough of Their Nest Eggs, Here\u2019s Why, an article written by Neil Templin, examines the reasons why some people don\u2019t plan to spend down their assets in retirement. These retirees' portfolios remain the same or sometimes even grow at a time of life when they should be diminishing. The author looks into why this phenomenon is happening.

Reasons for reluctant spending in retirement

One study even revealed that \xbe of participants had seen their assets remain the same or grow in retirement. There are numerous reasons why this could happen.\xa0

The robust stock market over the past ten years could contribute to a steady or growing portfolio. However, even with strong returns, some people may not feel comfortable enough to loosen their purse strings and spend their savings in retirement. Templin lists these reasons for reluctant spending habits in retirement:

  • Fear of running out of money paired with uncertain longevity\xa0
  • Worry about future medical expenses\xa0
  • Concern over rising long term care costs
  • Learning from a parent\u2019s retirement experience
  • Spending habits from working years continue through retirement\xa0
  • Not wanting to be a burden on their children

It is difficult to change the core values that people have about spending. Saving is a habit developed over time and retirees are discovering that they can\u2019t simply flick a switch and turn it off.\xa0

A solution to reluctant retirement spending\xa0

The author next examines research on retirees with pensions. The research showed that those who received more than half of their income in regular payments spent much more in retirement than those who received less than half of their income regularly.\xa0

The article concludes that creating a pension-style income or regular paycheck by using annuities could be a solution for retirees who are reluctant to spend in retirement.\xa0

An alternative to purchasing annuities in retirement

My concern with purchasing annuities to solve this problem is that this solution eliminates the freedom to choose. With a flexible spending strategy, retirees can spend confidently. They understand that when the market doesn\u2019t behave ideally that there is always a plan b to fall back on. This flexible spending strategy relies on education and knowledge to give retirees the peace of mind they need to spend confidently. Listen in to hear how Guyton\u2019s Guardrails could inspire confidence in your retirement spending strategy.\xa0

Resources & People Mentioned Connect with Benjamin Brandt

Subscribe to Retirement Starts Today on

Apple Podcasts,\xa0Stitcher,\xa0TuneIn,\xa0Podbean,\xa0Player FM,\xa0iHeart, or\xa0Spotify