Retirees spent their lives saving. Now they’re afraid to spend

Retirees spent their lives saving. Now they're afraid to spend.

Key points

• The Allianz Center for the Future of Retirement published its 2026 Annual Retirement Study in July.
• IRS increases 401(k) and catch-up contribution limits for 2026, allowing workers to save up to $32, 500 for retirement.
• Gerry Elam, 68, of Opelika, Alabama, retired early from his job at General Electric against the backdrop of pandemic-era downsizing in 2020.
• In a recent survey by Allianz Life, 39% of retirees remarked they are reluctant to spend their retirement savings.
• "We're all accustomed to spending our paychecks, but we're not accustomed to spending our retirement savings, " remarked Jonathan Swanburg, a certified financial planner in Houston.

Retirees spent their lives saving. Now they're afraid to spend. Daniel de Visé USA TODAY. IRS raises 401(k) contribution limits for 2026.

American workers are informed to spend their entire career saving for retirement, building a nest egg that they dare not touch.

When that career ends, retirees are projected to break the nest egg and commence spending it down.

For plenty of Americans, the transition from saving to spending does not come straightforward.

In a recent survey by Allianz Life, 39% of retirees remarked they are reluctant to spend their retirement savings. And 71% of working-age Americans remarked they expect to be reluctant concerning spending retirement funds when the time comes.

Financial advisers say one of the biggest parts of their job is persuading clients, even the rich ones, to spend their savings in retirement.

"It's hard to get somebody to even go out and spend five dollars for a cup of coffee at 7-Eleven when they're so used to saving everything, " remarked Melissa Cox, a certified financial planner in Dallas.

Cox remarked "about half" of her clients struggle with spending retirement savings.

"One of my favorite clients, I am literally begging him to spend money, " she remarked. "He won't go on vacation, which he desperately needs." For retirees, the transition from saving to spending can be scary.

Financial advisers often conceive of a retirement plan in two distinct acts. When Americans are earning income, allocating investments and building retirement savings through 401(k)s and other accounts, the first is the "accumulation" phase. When the retiree spends down the savings, the second is the "distribution" phase. For plenty of retirees, the change is frightening.

"We're all accustomed to spending our paychecks, but we're not accustomed to spending our retirement savings, " remarked Jonathan Swanburg, a certified financial planner in Houston. "If you watch your portfolio go down, it can be a very stressful thing."

Retirees have to embrace a new reality in which their income is largely beyond their control. In working years, you can cover an unexpected financial shock or big-ticket purchase by negotiating a raise or a higher-paying job. Retirement income, by contrast, tends to be fixed.

"The only thing you can really control at that point is your spending, " remarked Peter Lazaroff, a certified financial planner in St. Louis who has a forthcoming book on investing. 'I over-analyze every major purchase'.

Gerry Elam, 68, of Opelika, Alabama, retired early from his job at General Electric against the backdrop of pandemic-era downsizing in 2020. Elam had always lived below his means, and his financial planner remarked he had more than enough capital to retire. The only difficulty, he stated, was learning to spend it.

"I think the biggest change for me is going from saver to spender, " he remarked. "I over-analyze every major purchase, and by major, I mean over a couple hundred dollars."

Meanwhile, the best retirement savers can be the worst retirement spenders, Lazaroff remarked.

"People who build up a sizeable portfolio over their lifetimes are good savers, " he remarked. "And good savers, almost by definition, are bad spenders. They're not good at seeing funds go out the door."

Part of the difficulty, Lazaroff stated, lies in the "mindset adjustment" that your retirement savings are no longer off-limits. Retirees fear outliving their funds, and with good reason.

Retirees additionally have well-grounded fears of running out of capital, a setback plenty of Americans say they fear more than death itself.

"It's absolutely the number one fear of people headed toward retirement, " remarked Kelly LaVigne, vice president of consumer insights at Allianz.

Meanwhile, the Allianz Center for the Future of Retirement published its 2026 Annual Retirement Study in July.

"I get it that you don't want to run out of money, " LaVigne remarked. "But you also don't want to put off things that are really worth it to you."

Lazaroff sees retired clients struggling with competing risks. One is the risk of running out of funds if you spend too much. The other is living – or dying – with regret if you spend too little.

"If all you do is worry about running out of money, you're not going to spend enough, and you're going to end up dying with regret, " he remarked.

For fear of overspending, a retiree might balk at fulfilling a bucket-list item, like taking a long-delayed vacation, or flying first class.

"If you were in the working world, you probably held off on taking that trip because it was too expensive, " Swanburg remarked. In retirement, "you've lost that paycheck, and now you're trying to take this trip that is really, really expensive." SMS Facebook Twitter Email. Share your feedback to support improve our site! Share your feedback to support improve our site!

Taken together, the developments around retirees spent their lives saving. Now theyre afraid to spend point to a situation that is still moving, and the coming days should bring more clarity.