August 15, 2017

Overcoming the Fear of Spending in Retirement

Despite sobering statistics about most Americans’ lack of retirement savings, many people have done an admirable job. Through a combination of disciplined savings habits, a moderate lifestyle and a little luck, many find themselves with enough reserves to retire quite comfortably.

However, once it comes time for these retirees to reap the benefits of their financial discipline, the move from saver to spender can feel like an abandonment of all the principles they have known for more than 30 years. A deep discomfort with spending money takes hold and leads to what I call “What If” syndrome.

Retirees with “What If” syndrome often experience a paralyzing fear of what might happen if they spend some of their retirement savings paired with the instinct to build a moat of protection around themselves and their money. Unchecked “What If” syndrome can lead individuals down a path of abundant caution, wealth, and unfulfilled dreams.

An Example of “What If” Syndrome

A recently retired client, a woman with approximately $1 million in savings, was asked to join a group of friends on a girl’s getaway vacation costing approximately $3,000. She had plenty of money to take the trip, but she felt uneasy because it meant breaking her lifetime habit of saving for the future. She had lived a financially disciplined life for so long that she didn’t feel comfortable with spending. “What If” syndrome was keeping her from enjoying a hard-earned vacation with her friends.

It’s Time to Enjoy It!

Retirement income planning can’t eliminate all of your anxiety and fear, but it can grant you the peace of mind necessary to enjoy your retirement years. It’s okay to spend reasonably; you have reached the period in your life that you have been saving for. Go out and enjoy it!