Retirees Risk Dying With $0 Enjoyment as 401(k) Fears Drive Underspending
Updated
Updated · The Motley Fool · May 28
Retirees Risk Dying With $0 Enjoyment as 401(k) Fears Drive Underspending
3 articles · Updated · The Motley Fool · May 28
$3 million or $300,000 may not be the real retirement dividing line, the author argues; spending too little can be as damaging as running out of money.
30 to 40 years of saving habits can make retirees psychologically reluctant to switch from accumulation to withdrawals, even when they can clearly afford bigger purchases.
That caution still has a rational basis because retirees do not know how long savings must last and still face inflation, healthcare costs and market downturns.
The author says the planning focus should shift toward a flexible withdrawal strategy with a financial advisor so retirees use savings when needed instead of preserving too much for heirs.
Is underspending a rich person's problem or a widespread retirement crisis?
Why do wealthy retirees live in fear of buying a new oven?