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Why Retirees Hoard Savings Instead of Spending Them
38% of retirees hold back spending just to protect savings. Only 14% have a detailed strategy for retirement withdrawals. Experts say budgeting and calculators can help break the barrier.
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Seven in 10 retirees say keeping their nest egg from shrinking is very important. Fewer than one in three feel comfortable spending from savings, according to a new Corebridge Financial report.
The gap between saving for retirement and spending in retirement is the quiet risk that undermines decades of accumulation. Bryan Pinsky, president of individual retirement and life insurance at Corebridge, calls it a disconnect between expectations and the broad resistance to actually spend money.
More than a third of retirees–38%–admit they've held back spending specifically to protect their savings stash. The majority plan to leave "whatever is left over" rather than a specific inheritance.
Jean Chatzky, a personal finance expert who worked on the report, points to the shift from pensions to 401(k)s. "We've got to take this big chunk of assets and figure out on our own how to make it last," she said. "That's really scary." She described watching her mother spend nothing beyond Social Security, pension, or interest.