Afraid to Spend Money in Retirement? Here’s Why, and What to Do About It

Last updated: October 12, 2026

Updated July 2026.

This page was reviewed and updated in July 2026 against new research on how retiree spending actually changes over the course of retirement. The description of late-retirement spending was corrected to reflect what the research shows for most retirees rather than for the average, and a finding about well-funded retirees who hold back anyway was added.

If you’ve saved well and you’re still afraid to spend money in retirement, the problem isn’t you. It’s the tool you were handed. A portfolio balance moves up and down every day, and leaning on it for your groceries and your travel keeps you uneasy no matter how big the number gets. That fear carries a cost almost nobody names: the trips put off, the years spent waiting for the market to feel safe. There are two ways a retirement plan can fail. One is running out of money. The other is running out of time before you ever let yourself enjoy it. This page is about the second one, and how a guaranteed income floor takes the fear off the table.

Let’s put a real number under what you can spend, with an income floor underneath it that makes the number real instead of theoretical.

Watch: The River and the Lake

Five minutes on why people who saved well still cannot bring themselves to spend it, and what actually fixes that.

I have recorded a short video on most of the questions retirees ask me. See them all here.

The couple who skipped Europe twice

A widow came to me a while back, referred by someone who knew her. She wasn’t worried about money. She and her husband had saved well, more than enough. She was grieving, and not only her husband. She was grieving the trips they never took.

Their advisor had told them they were fine. Every year they watched the account balance move, and every year they pulled back a little more, just in case. They talked about Europe. They put it off. Then they put it off again. Her husband got sick. He’s gone now. You don’t get that trip back.

I asked her what her advisor had been telling them all those years. “That everything was fine.” So why didn’t they believe it? “We just kept seeing the balance go down.”

Here’s the part that matters, and it’s the whole reason this page exists. Her advisor wasn’t lying to her. The math probably was fine. What failed wasn’t the math. It was that she could never feel safe enough to use it. A plan that looks good on paper but can’t be felt is of little use to the person living inside it.

The problem isn’t you. It’s the instrument.

Why does spending feel so hard when the numbers say you’re fine? I’ve sat across from people with far more than they’ll ever spend who watch the markets all day and worry about the grocery bill. From the outside it looks irrational. It isn’t.

A portfolio balance is a number that changes every single day. Some days it drops. If that number is what’s supposed to pay for your life, of course every dip lands in your stomach. That’s not a character flaw. That’s the correct response to depending on something that can fall. The instrument creates the anxiety, what we call the Spend-Down Trap behind that fear, and then we tell people to relax. They can’t, and they’re right not to.

This is where traditional planning quietly works against you. The standard answer to “will I be okay?” is a success score, a probability your money lasts. We’ll come back to what that number really means, because it’s the heart of the whole problem.

A success score is also measured over a number of years, usually 30, and nobody compares that to how long you may live. J.P. Morgan gives a non-smoking couple in excellent health who are both 65 a 44% chance one of them reaches 95 and a 16% chance one of them reaches 100.¹ You should see how long you are actually likely to live before you take comfort in any score.

The 90 percent that should comfort you, and the 10 percent you can’t stop staring at

Traditional plans are often graded on a success score. Picture a 90 percent score. It sounds reassuring. It also means a one-in-ten chance the plan doesn’t make it, and built into that grade is the assumption that you’ll cut your spending if markets turn against you.

Most people don’t hear the 90. They hear the 10. And they respond to it the only way they can, by trimming their spending ahead of time, just in case, in the very years they could have been living fully. The 4% rule and its success scores give you a probability, not a promise. A one-in-ten shot at catastrophe isn’t a retirement plan. It’s a retirement hope.

The real difference is this. Traditional planning calls a plan “successful” even if it forces you to cut back along the way. Is your definition of a successful retirement one where you have to cut back because the market didn’t cooperate, or because you never felt free to spend what the plan said you could?

That isn’t most people’s definition of success. The fix isn’t better math. It’s removing the uncertainty that makes the math impossible to trust.

The go-go years don’t come back

This is the part that has nothing to do with money, and it might be the most important thing on this page.

There’s a window early in retirement when you have the health, the energy, and often the people around you to do the things you spent decades saving for.

New research from David Blanchett, published in 2026, looked at what retirees actually spend rather than what plans assume they spend. For most people, spending drifts down over time once you account for inflation, and it keeps drifting down. It does not curl back up the way the old picture suggested.

The late rise you may have heard about is real. It shows up in a minority of retirees, and when it shows up it is usually the cost of care rather than the cost of living.

Which raises a question worth asking while every option is still open. What happens to your plan if you turn out to be the one in that minority?

Here’s the finding that ought to change how you read your own hesitation. Blanchett looked at retirees who were clearly overfunded, people with more than enough, and found they reduced their real spending too. Not because they had to. That points to choice, not shortage.²

(David Blanchett, “How Spending Evolves in Retirement: A Smile, a Smirk, or Something Else?” Financial Planning Review, 2026. Open access. Findings summarized here for general education.)

Which is another way of saying the fear does not go away when the money shows up.

Let me summarize this for you… your most alive years tend to come first, and they don’t stay forever.

The question is rarely whether you can afford the trip. For people who’ve saved well, you can. The real question is whether you’ll still be able to take it if you keep waiting three more years for the market to feel calm. That window closes quietly. Nobody rings a bell. Same with the club you keep driving past. We priced what a country club membership actually costs at clubs across five states. We did the same thing for a bucket list golf trip, course by course. We did the same for a week in Italy, an Alaska cruise and a Caribbean week. Here is what a trip in retirement really costs. We did the same for six hobbies, from a cooking school to a fishing charter to a week of woodworking school. Here is what your retirement hobbies actually cost.

A boat is the one that costs you whether you go out or not, so here is what a boat actually costs in retirement, priced in all five states we serve.

And all of it on one page, priced piece by piece: what the retirement you want actually costs.

What are you really buying when you take the trip?

Think about the last trip you took with people you love, or one you keep meaning to take. What are you really buying? Not the flight and not the hotel. You’re buying a memory, and a memory keeps paying you back for the rest of your life.

The author Bill Perkins gave this a name that fits the way we already think about money: a “memory dividend.” A new possession excites you for a while, then you get used to it and stop noticing. An experience does the opposite. It pays a return every time you remember it, retell it, and relive it. And the research backs the idea. Work by Thomas Gilovich and colleagues at Cornell, going back to a 2003 study in the Journal of Personality and Social Psychology, finds that once your basic needs are covered, money spent on experiences tends to bring more lasting happiness than money spent on things.

Notice the condition in that research: once your basic needs are covered. That is the whole case for the income floor. Secure your essential living first, and the spending above it, the adventures, experiences, and memories with loved ones, is the spending that research says makes a life feel rich.

And the dividend runs both ways. The memories aren’t only yours. Years from now, what will your kids and your grandkids carry? Not the size of the account you left them. They’ll carry the trip, the lake, the time you showed up. That’s the legacy most people say they want when you ask them plainly, and it only gets built in the years you’re well enough to build it.

What a guaranteed income floor actually buys you

Here’s the mechanism, in a simple explanation.

When your essential bills and your non-negotiable adventures, experiences, and memories with loved ones are covered by income that arrives every month for life, regardless of what the market does, a market drop stops being a threat to your lifestyle. We call that a guaranteed income floor, or guaranteed lifetime income, which we call Protected Lifetime Income, or PLI for short. It covers your must-haves. Everything above it stays invested for growth, flexibility, and legacy.

The research lines up with what I see in real life. BlackRock’s work found retirees with a guaranteed income floor had on average 22 percent more potential spending power than those relying on withdrawals alone.³ EBRI’s studies tie guaranteed income to higher well-being and a more confident outlook on spending. The reason is simple: people spend income they can count on, and they hesitate to spend a balance that might fall. (These match the figures already cited across the site.)

You’ve probably seen the simple version of this in real life. The happiest retirees tend to be the ones with a pension, a check that lands every month whether the market is up or down. The research agrees. A RAND Corporation study using national survey data from 1992 to 2000 found retirees with a guaranteed income stream were about 43 percent more likely to call themselves very satisfied ten years into retirement than those without one, and the pattern held even after researchers accounted for how much wealth people had.⁴ It wasn’t the size of the nest egg. It was the certainty of the check.

Here’s the part worth holding onto. A pension is only one of three sources of guaranteed lifetime income. The other two are Social Security and an annuity. Most people retiring today won’t get a pension. If you’re one of them, you’re not stuck. You can build that same monthly check yourself by pairing Social Security with an annuity, which is what the guaranteed retirement income page lays out in full.

This is the Lifestyle-First approach. Secure the income floor first, then invest the rest with far less fear, because a bad market can’t reach the part of your life that matters most. Many people end up investing their remaining money more confidently once the income floor is in place, not less.

This also connects to the tax side of the picture. The same structure that frees you to spend can be paired with planning that keeps your income from triggering the Tax Avalanche and helps protect a surviving spouse from the widow’s penalty later on.

How Long Does Retirement Anxiety Last?

There’s no set timeline. In a large U.S. study, most retirees saw little change in how they felt, and about one in four had a rough patch that got better.

That study followed retirees in the Health and Retirement Study for eight years. About 70% saw little change in how they felt. About 25% had a rough patch during the first move into retirement, then got better. About 5% felt better.⁵ Declining health hurt well-being more than money did.⁶

Worry about spending is different. It may not fade on its own, because what causes it is still there: a balance that drops every time you spend. Research by David Blanchett and Michael Finke, published by the Retirement Income Institute, found retirees spend about twice as much each year when their wealth is guaranteed income instead of investments.⁷ A follow-up found married households at 65 were drawing only about 2.1% a year from their savings.⁸ In that research, retirees held on to savings and spent their income.

That’s why we build a floor of Protected Lifetime Income for the right amount, not all of your money. The essentials, the trips, the experiences, and the memories with the people you love get paid for by a check that keeps coming, and the rest of your money stays liquid, with room to grow. What would you do differently if the check came every month no matter what?

What underspending in retirement really costs

We measure retirement risk in dollars left in the account. That’s the wrong ledger.

The real cost of underspending isn’t money. It’s the things the money was for. The trip to see family that turned into “maybe next year” one too many times. The summer at the lake you rented instead of enjoyed because owning it “seemed like a lot.” The grandkids’ memories you were healthy enough to be part of, until you waited too long.

A balance that’s still full at the end isn’t a trophy. For most people it’s a stack of experiences that never happened, and a stack of memory dividends that were never paid. Was the point of 40 years of saving a number on a screen or a statement… or was it the life the number was supposed to pay for?

Well then… what do you actually do about it?

You put a real number under your spending, and an income floor under the number.

It starts with knowing what you actually need, then sizing guaranteed income to cover your essentials and the experiences you refuse to skip, then building a smart withdrawal strategy for everything above that. The math gives you direction. The income floor gives you permission. Running the numbers is free and reversible. The years you live afraid to spend are not.

If the gap between what you could safely spend and what you’re letting yourself spend is large, that’s worth a hard look. For many people it’s tens of thousands of dollars a year across the best years they have left.

We’ll focus on your lifestyle first, so you can spend with confidence and enjoy the retirement you’ve earned.

Myths and Truths

• Myth: “If I have enough, I’ll naturally feel free to spend it.”
  Truth: Feeling free to spend depends on the source of your income, not the size of your balance. People spend income they can count on and hesitate to spend a number that can fall.
• Myth: “A high success score means I’m safe.”
  Truth: A success score is a probability, not a promise, and it assumes you’ll cut spending if markets drop. It doesn’t show how a bad year would actually feel or what it would cost you.
• Myth: “Spending on experiences is frivolous. Saving is the responsible choice.”
  Truth: Once your essentials are secure, research finds experiences tend to deliver more lasting satisfaction than possessions, and the memories keep paying off for you and your family for years.
• Myth: “Underspending is just being careful. No harm done.”
  Truth: The harm is real, it’s just not on the statement. It shows up as experiences that never happened during the years you were healthy enough to have them.
• Myth: “A guaranteed income floor means giving up growth.”
  Truth: The income floor covers only your essentials. Everything above it stays invested. Many people invest more confidently once their essentials are secure, not less.

Spending in retirement doesn’t hold flat either. It usually dips through the middle years and lifts again late, and that shape changes how big a paycheck you need to build. Read The Retirement Spending Smile Nobody Told You About.

Frequently Asked Questions

What does it mean to be afraid to spend money in retirement?

In reality, it is the very common experience of having enough, or more than enough, and still holding back out of fear the money won’t last. It usually isn’t about the size of your savings. It’s about depending on a portfolio balance that moves every day, which keeps you uneasy no matter how large the number is.

Is underspending in retirement really a problem?

For a lot of well-prepared retirees, yes. Research suggests many people could spend a good deal more than they do. The cost shows up not as a financial shortfall but as trips, time with family, and experiences postponed during the years they were most able to enjoy them.

What is a memory dividend?

It’s a term from the book Die With Zero for the return you keep getting from an experience long after it happens. Unlike a possession that fades, a good memory pays you back every time you recall it and share it, and the people you shared it with carry their own version of it too. It’s a useful way to see what your money is really for once your essentials are covered.

Why do people with plenty of money still worry about running out?

Because a portfolio balance can fall, and your eye goes to the days it does. A success score of 90 percent still leaves a one-in-ten failure scenario, and most people fixate on that 10 percent. The worry is a rational response to an uncertain tool, not a sign you’ve done anything wrong.

How does guaranteed income help me spend with confidence?

When your essential expenses and your non-negotiable adventures, experiences, and memories with loved ones are covered by income that arrives for life regardless of the market, a downturn can’t force you to cut your core lifestyle. BlackRock’s research found retirees with a guaranteed income floor had about 22 percent more potential spending power than those relying on withdrawals alone, largely because people spend income they trust.³

How do I know how much I can safely spend?

That’s what a plan is for. You match your guaranteed income stack (Social Security, a pension if you have one, and guaranteed lifetime income) to your essentials and non-negotiables, and the rest of your money no longer has to pay the bills, which means it doesn’t have to be sold in a down market. The numbers show the size of what’s at stake and give you direction. With an income floor underneath, the number stops being theoretical and becomes something you can act on.

About Kurt H. Jackson

Experience: Since founding KJ Financial in 2010, Kurt H. Jackson has worked with retirees and pre-retirees across Missouri, Nebraska, Kansas, Iowa, and Florida who discovered that the retirement plan they had built around a fixed withdrawal rule was far more fragile than they realized. He has worked directly with clients coming out of the 2008 crash, and with clients who retired into the 2020 COVID drop and the inflation spike of 2021 to 2023, and he has seen firsthand what sequence of returns risk does to a withdrawal-only strategy versus a Lifestyle-First plan with a guaranteed income floor. Before founding KJ Financial, he spent 20 years as a Certified Mortgage Planner working with more than 1,000 clients on major financial commitments, giving him deep insight into how financial decisions compound over time.

Expertise: Kurt is a Retirement Lifestyle Architect and the creator of the Lifestyle-First Retirement Income Planning framework. He builds guaranteed lifetime income, which he calls Protected Lifetime Income (PLI), under both his clients’ essentials and their non-negotiables, the adventures, the experiences and the memories with those they care about. With that income floor in place, the rest of their money no longer has to pay the bills, which means it doesn’t have to be sold in a down market. He is Life and Health Insurance Licensed in MO, NE, KS, IA, and FL. His practice focuses exclusively on insurance-based, tax-optimized retirement income strategies. He does not manage investments or sell securities.

Authoritativeness: Kurt founded KJ Financial and operates MaxMyRetirementIncome.com as a dedicated educational resource for retirees. His work is grounded in peer-reviewed and independently published research, cited directly on each page. He applies that research to the practical income planning decisions retirees face every day in the states he serves.

Trustworthiness: KJ Financial is a compliance-first firm. All figures and research citations on this page are sourced from publicly available, independently published studies and are linked directly in the content. Kurt is paid by commission from the insurance company that issues the policy. Kurt H. Jackson is not a securities broker, registered investment advisor, or CPA. Guarantees rely on the claims-paying ability of the issuing insurance company.

Contact KJ Financial:
1014 E. 5th St., Maryville, MO 64468
Direct: 816.582.5532
Email: kurt@kjfinancialonline.com
Website: www.MaxMyRetirementIncome.com

Educational only. Not tax, legal, or individualized investment advice. Guarantees rely on the issuing insurer’s claims-paying ability. Any figures shown are illustrative and may differ for your situation based on age, health, product features, fees, allocations, and market conditions. Research findings referenced on this page are drawn from BlackRock, EBRI, the RAND Corporation, and academic work by Thomas Gilovich and colleagues, and are current as of June 2026. Always consult a qualified financial, tax, or legal professional for your specific situation.

Sources

1. J.P. Morgan Asset Management, Guide to Retirement 2026, the Life Expectancy Probabilities page. J.P. Morgan’s own longevity chart for a non-smoker in excellent health who is age 65 today, giving a man a 64% chance of reaching 85, 43% of 90, 21% of 95 and 6% of 100; a woman 73%, 54%, 30% and 11%; at least one member of a couple 90%, 74%, 44% and 16%; and both members of a couple 47%, 23%, 6% and 1%.
2. David Blanchett, “How Spending Evolves in Retirement: A Smile, a Smirk, or Something Else?” Financial Planning Review, 2026. Blanchett’s analysis of eleven Health and Retirement Study consumption surveys from 2001 through 2021, which finds that retirees reduce their inflation adjusted spending over time rather than holding it steady, and that even relatively well off retirees who could afford to spend more typically do not, which points to choice rather than shortage.
3. BlackRock, guaranteed income and retirement spending research. BlackRock’s own modeling, which finds that embedding a guaranteed retirement income solution in a target date fund drives a 22% average increase in potential spending ability across all income levels, and a 25% increase for lower income workers.
4. Constantijn W. A. Panis, “Annuities and Retirement Well-Being,” Pension Research Council, Wharton School. The published version of the RAND paper on annuities and retirement satisfaction. Table 14-3 shows that among retirees ten or more years into retirement, 67.3% of those with a defined benefit pension called themselves very satisfied against 46.9% of those without one, a gap of about 43%, and the paper reports the pattern holds after controlling for the present value of retirement resources. The figures are the author’s computations from the 1992 to 2000 Health and Retirement Study.
5. Wang and Wanberg’s 2017 review in the Journal of Applied Psychology summarizes Mo Wang’s 2007 Health and Retirement Study research: about 70% of retirees had minimal well-being change, about 25% declined at first and then improved, and about 5% improved.
6. Bowling Green State University’s 2008 report on Mo Wang’s study notes that declining health had a bigger effect on retirees’ well-being than financial declines.
7. Blanchett and Finke’s “Guaranteed Income: A License to Spend” (Retirement Income Institute, June 2024) found retirees spend about twice as much each year from guaranteed income wealth as from investment wealth.
8. Blanchett and Finke’s “Retirees Spend Lifetime Income, Not Savings” (Retirement Income Institute, April 2025) found withdrawal rates from savings of about 2.1% for 65-year-old married households.