Living in Arizona, I had a friend who was in her 80s. Her retirement left her a widow with a paid-off home and almost no bills.
She had so much money in savings that she would never run out, yet she was hesitant to spend any of it on herself for clothing, household items, travel, etc. Her financial advisor kept urging her to spend her money. And yet she hesitated. She was afraid that she would somehow run out of money.
She’s not alone.
A recent study found that half of retirement plan participants (51%) have money left in a workplace plan.
They worry it will run out.
That fear is up from 30% less than a decade ago.
Forty-four percent of retirees say they’ve already cut back spending because of that fear.
Plenty of Money, Living Like You Don’t
For many retirees, fear of running out of money creates the very scarcity the money was meant to prevent. Retirement coach and financial advisor Dan Haylett has seen this happen many times with his clients. He warns in his Humans vs Retirement Newsletter of March 5, 2026:
“And so you end up living small, carefully, anxiously, experiencing the very financial stress and constraint you spent 40 years trying to avoid.”
Living small as a retiree looks like hesitating over purchases, buying with stress, choosing the cheaper option over the nicer one that costs a little more, and skipping experiences the money could easily cover.
One might conclude that many retirees hesitate to spend because they have limited financial resources. However, that’s often not the case. As Dan Haylett wrote in his Newsletter in November 2025,
“Most retirees aren’t tight with money because they’re sensible. They’re tight with money because they’re scared.”
I Was That Retiree, Too
I was that retiree, too. For my first 5 to 7 years of retirement, I hesitated to spend much beyond the basics. We ate lots of fast food when we went out, and nicer meals felt like an unnecessary expense. We limited ourselves to one “big” trip a year to Disneyland.
The turning point came when my retirement research revealed that many retirees live far below their means because they’re afraid. I recognized myself in that.
My wife and I talked about it, and we decided to stay prudent while still spending more when we could. We realized we, too, were retirees afraid to spend money.
Why 40 Years of Saving Won’t Let You Spend
Retirees hesitate to spend even when they can afford it. A years-long savings habit doesn’t just disappear when someone retires. After years of saving, starting to spend instead of saving can feel reckless and scary.
Retirees spend 80% of their guaranteed income but only half of their savings. Breaking a 40-year saving habit is hard.
An unrealistic fear of running out of money can also cause retirees to hoard their assets and live small lives. In Why You’re Wasting Your Time Worrying About Running Out of Money, Dan Haylett wrote:
“You’re not going to run out of money. Almost nobody does. But you’re going to spend your retirement years worrying about it anyway, denying yourself experiences and joy, living small when you could be living fully, all to protect against a disaster that probably isn’t coming.”
Advisers report that boomers’ reluctance to spend in retirement often traces back to parents who lived through the Depression. They now see part of their job as giving retirees permission to spend their own money.
Not Everyone Should Spend More
On the other hand, not all retirees are affluent; some don’t have enough income and savings to spend more in retirement. Perhaps they have no pension, little Social Security, and almost no savings.
Many must work at least part-time to cover basic expenses. In that situation, caution makes sense, and it is well justified.
Is Your Money Protecting You — or Your Anxiety?
If you’re a retiree who hesitates to spend money, how do you tell whether that’s based on fear or legitimate prudence?
You need to have a clear understanding of your financial situation. Having a budget is foundational.
How much income is projected to come in, and what expenses are projected? You also need to know what savings you have, what they can be reasonably expected to generate over time, and what withdrawal percentage is reasonable.
Prudence means making sure you have enough income or withdrawals from savings to cover bills and projected expenses, with a monthly cushion. It’s wise to check in periodically with your financial advisor to reassess your financial situation.
Dan Haylett suggests you use this test when making decisions about spending:
“Start asking whether a choice protects your money or protects your anxiety.”
What Happened When We Let the Money Work
When my wife and I reviewed our finances, we realized we had wiggle room to increase our spending.
However, we had been living ‘too small’ in retirement.
This past year, we took $120,000 from our savings and invested it in a single-family home.
We did this so we could move out of our apartment. Six months later, we feel great about the decision; we’ve put that $120,000 to work as both a financial investment and a major quality-of-life improvement.
We’ve also taken more domestic trips. In September, we did a 10-day West Coast road trip. In October, we spent a week enjoying a cabin in the Colorado Rockies. We have a Disney World vacation booked for next year.
The old hesitation is still there, but it’s much weaker. We’ve decided the money was just sitting in a savings account and wasn’t really doing much for us.
Our rule of thumb for spending in retirement now is whether we consider the expense “worth it.” For us, spending $3,000 on a trip to Disney World is worth it, but spending $30,000 on a cruise is not. Of course, everyone values what’s worth it differently.
When, If Not Now?
Here’s the takeaway: If you’re retired, look at your finances objectively. If you can spend more in ways that enrich your life, start doing so. What was the point of sacrificing for all of those years if you’re not going to spend your savings in retirement?
If you’re not going to spend it now, when will you? Remember, as we age, we all have a limited health span, and we may not be able to do the things we enjoy if we wait too long.
Spend It While You Can Still Enjoy It
Money can be replaced. Time and health can’t. The trips, the meals and the experiences we’re postponing won’t wait forever, and neither will our ability to enjoy them.
Take a few minutes today and write down one thing you’d regret not doing if your health changed next year. Then look at whether your finances can cover it. If they can, book it.
Note: I wrote this blog post myself using my own words and thoughts for the initial draft. I used AI only to suggest headlines, section headings, images and text improvements.
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