Retirees are scared to spend the money they saved, study finds

Millions of retirees have the cash to live a little, yet many are choosing to keep the wallet shut because they fear watching their savings shrink.

That is the problem highlighted by Kurt Supe, a CPA and retirement planner, in a MarketWatch opinion column published July 18. Supe argues that the hardest retirement mistake is not only running out of money, but spending healthy years afraid to use the savings built for that exact stage of life.

Supe cites a Corebridge Financial decumulation study that found 38% of retirees have intentionally spent less than they wanted so their nest egg would not decline. A separate release on the same Greenwald Research survey said only 28% of respondents were comfortable drawing down savings to pay for living expenses.

The survey included 2,210 adults ages 45 to 79 who had saved at least $100,000, according to the research cited by Supe.

The spending problem after decades of saving

Supe’s central point is that many Americans are trained for accumulation, not withdrawal. Workers hear for decades to save more, avoid touching principal and let investments grow. Once retirement arrives, those same habits can make spending feel unsafe, even when a plan says the money is available.

The study data suggest the emotional side is doing plenty of damage. Supe wrote that half of those surveyed associated retirement spending with uncertainty, while 44% connected it with anxiety.

There is also a language gap. According to the Corebridge study cited in the column, 46% of respondents had never heard the term “decumulation,” the process of drawing down assets in retirement.

Written plans appear to change confidence

The column points to one finding as especially important: among people 55 and older with a written plan for drawing down savings, 57% reported high confidence about retirement spending. Among those without such a plan, that figure was 26%.

Yet written withdrawal plans remain uncommon. Corebridge found that only 29% of pre-retirees 55 and older had a withdrawal plan, while just 14% of retirees had a strategy for required minimum distributions, according to Supe’s summary of the findings.

Supe says a proper retirement spending plan should test whether savings can survive different market outcomes, create a year-by-year spending map and set aside money for later-life care. He specifically points to Monte Carlo analysis, which models a retirement plan across many possible market scenarios.

The column also notes that retirement spending is unlikely to stay flat. Supe cites research describing higher-activity “go-go” years, slower years from about ages 70 to 84 and later years shaped by health needs and end-of-life care. He wrote that average retiree spending falls by more than 30% between ages 60 and 85.

Health costs drive fear

Late-life care is one reason retirees may be reluctant to spend early. Supe cites CareScout and Genworth data showing that in 2025 the national median cost of a private nursing-home room reached $355 a day, or about $129,575 a year. CareScout also says roughly seven in 10 people will need some form of long-term care during their lives.

Supe’s advice to retirees is to ask advisers for a written withdrawal plan, including what spending is safe for the current year and what the probability modeling shows. For people managing their own money, he recommends planning software that can estimate safe withdrawal rates and test outcomes over time.

This story draws on original reporting from MarketWatch.