An advisor has identified a dangerous new trend. Retirees are spending too little money in retirement. They saved for forty years. They deferred gratification. They maxed out their 401(k)s while their friends bought boats. Now they're sitting on a pile of money and refusing to touch it.
The risk is catastrophic. They might die with money left over.
Imagine the horror. You scrimp and save your entire working life. You eat ramen while your coworkers order sushi. You drive a 1997 Corolla until the wheels fall off. You finally retire at sixty-seven with enough money to live comfortably. Then you keep eating ramen anyway because the spreadsheet says you might run out of money when you're ninety-four.
The advisor calls this dangerous behavior. Personally, I call it the logical conclusion of retirement planning. The entire financial services industry spent decades terrifying these people about outliving their money. Turns out fear is hard to unlearn. Who knew?
The underspenders are making a critical error. They're treating their retirement account like it matters. They optimized their entire existence around a number in a computer. They won the game. Now they're too scared to collect their prize because someone might move the goalpost after they're dead.
The solution is obvious. Spend more money. Take the vacation. Buy the thing. Live a little before you die with a portfolio that your ungrateful children will blow on jet skis.
But they won't do it. They'll die clutching their brokerage statements, terrified that the market might crash the day after their funeral, vindicated at last that their caution was justified all along.
Photo by Brett Jordan on Unsplash
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