Randy Smith has diligently saved for retirement throughout his 36-year career, particularly during his last five years as general manager of a material handling company.
“I put so much of my salary into a health savings account and a 401(k) account that it was almost 50 percent,” Mr. Smith, 64, said.
His wife, LeeAnn Smith, 62, worked as an elementary school teacher for 34 years. She retired in 2020. Her only source of retirement provision is a pension equal to half her salary.
Despite their accumulated resources, the couple, who live in Idaho Falls, Idaho, fear they will run out of money and become dependent on their children, Mrs. Smith said.
Couples like the Smiths, who have been saving for retirement for decades, may experience what might be called a good problem: transitioning from building up their savings to spending them. New retirees are often afraid. They imagine worst-case scenarios like a stock market crash or rapid inflation. And they may tie their self-worth to their ability to save more than others, said Mark Stancato, founder of VIP Wealth Advisors in Decatur, Georgia.
“It’s not a math problem; it’s a thinking problem,” Mr. Stancato said.
“When you retire, you’re often in your highest earning years,” said Regina Neenan, director of cash flow and insurance planning at FPFoCo, a wealth management firm in Fort Collins, Colorado. Suddenly you’re faced with a shocking reality: No revenue is coming in, except perhaps Social Security, and most of the money is going out. The immediate concern Mx. Neenan hears from retirees: “What if I run out of money?”
Before Mr. Smith retired in 2024, the couple met with a financial manager to determine when to claim Social Security benefits and to assess their overall situation by comparing their estimated annual budget with their savings and investments. They explained their expected life expectancy, which is 30 more years for Mr. Smith and 25 more years for Mrs. Smith, based on their parents’ longevity.
The finance manager ran several scenarios taking into account inflation, changes in the stock market and unexpected expenses such as health care and home repairs. Financial models showed the couple how much they could spend each month, and Mr. Smith decided he wouldn’t claim Social Security until he was 70.
“It gave us reassurance that we enjoy what we do,” Ms. Smith said.
Spending retirement savings can be deeply emotional, says Ashley Quamme, financial therapist and founder of Beyond the Plan in Augusta, Georgia.
When clients experience anxiety about money despite having sufficient resources—a type of financial dysmorphia—Ms. Quamme examines where these feelings originate and works with clients to reconcile their feelings with their reality.
“Sometimes just being able to say out loud is very powerful: ‘You know what, spending this wealth that I’ve built over decades is really hard and very emotional,'” Ms. Quamme said.
However, getting comfortable with spending that money doesn’t happen overnight. Here are four ways you can go from saving your emergency fund to enjoying the money you save. This will ensure you have enough money to last your entire life and, if you wish, leave some behind for your children.
Adjust your spending based on your life stage
People typically spend the most money in the first 10 years of retirement because they can travel and enjoy the activities they put off while working full-time, Mr. Stancato said.
After age 65, annual household spending declines by 1.7 percent for singles and 2.4 percent for couples, according to a RAND study. As we age and our health declines, we typically spend more time at home and less money on travel, dining out and hobbies, Mr. Stancato said.
After meeting with the counselor, the Smiths felt more confident. They decided to take month-long trips to Costa Rica and Europe each year, as well as several trips to the United States to visit their 13 grandchildren. Mr. Smith admits that a month-long trip to Costa Rica in 10 years will probably be a challenge. “Not that we can’t still travel, but how far we can go and how much stuff we can take with us will limit some of our travel options,” he said. “These are our go-go years,” Mr. Smith said, “and if you take it slow, it won’t work.”
Give yourself a retirement paycheck
“One of the most difficult transitions for retirees is losing their regular pay while still having to pay for housing, health care and expenses like food and utilities,” said Jared Gagne, wealth manager at Claro Advisors in Boston.
“It’s very difficult to go from making money and having a consistent paycheck to not getting one and still having to pay the same bills and wondering where the money is going to come from,” Mr. Gagne said.
Inflation is exacerbating the problem, he said. “Because of inflation, people are spending more money, so it feels like you’re constantly chasing a moving target,” he said. But if your money is invested, your wealth on paper has grown significantly more than the price of eggs has risen over the past five years, he said.
According to a 2025 Gallup poll, about 61 percent of Americans ages 65 and older have money invested in the stock market, whether in an individual stock, a stock fund, a self-directed 401(k) account or an individual retirement account.
The math of compounding, diversification, risk management and disciplined withdrawals will become even more important as younger generations prepare for retirement, Mr. Stancato said. Many older retirees built their savings habits knowing they would receive a pension, making their savings feel like a safety net rather than a resource to draw from. And that makes them feel like spending is emotionally risky.
However, younger generations cannot rely on a traditional pension. “Millennials, on the other hand, will build wealth knowing they have full responsibility for generating their own lifetime income,” Stancato said.
To help clients feel more secure, Mr. Gagne recommends automating a predictable monthly transfer from their investment account to their checking account on the 1st or 15th of each month, similar to receiving a paycheck. This is particularly helpful for people who don’t have a pension as it creates a reliable source of income, he said.
Although everyone’s financial situation is different, Mr. Gagne offered some general advice: Follow the so-called 4 percent rule. In general, you can use about 4 percent of your assets each year in retirement without worrying about running out of money or overspending. For example, if your brokerage account, IRA, and other assets total $1 million, you can withdraw about $40,000 per year. Divide that number by 26, and you can afford about $1,538 every two weeks.
This structure also prevents people from overspending. If the markets are strong, the customer could potentially withdraw more money. If the markets are uneven, the customer can adjust the amount transferred to checking account.
Try Small Splurges
We often assume that we need to reduce our spending when we retire, but if you’ve saved consistently and paid off your mortgage or if your rent is manageable, you can enjoy retirement without pinching pennies, Mx. Neenan said.
To determine how much newly retired customers can spend each month, Mx. Neenan records how much they spent in the year before they retire and then calculates their account assets, adjusted for inflation and market returns.
Even if customers can spend $1,000 more per month, Mx. Neenan suggests starting small and spending an extra $200 per month on something you enjoy. Maybe it’s about taking a weekend trip, having lunch with friends every week, or spending money on a hobby you want to try.
At their next meeting, Mx said. Neenan will ask the customer how it felt to spend that extra $200 and what impact it had on the customer’s quality of life. Then they check the budget and Mx. Neenan shows the client that spending an extra $200 didn’t hurt their financial plan.
Link your spending to your goals
Identify specific ways to use your money, such as: For example, for family vacations, gifts to loved ones or charities or projects to customize your home to suit your needs, Mr. Stancato said. When the conversation turns to personal fulfillment or the ability to create memories with family, customers tend to spend more money, he said.
“I remind you that your wealth is not meant to last forever; it is meant to fund a fulfilling life,” Mr Stancato said.
Since retiring from NASA with a pension two years ago, Ed Wagoner has been using his retirement money to do just that.
A friend suggested Mr. Wagoner, 78, read “Die With Zero” by Bill Perkins, which is about making the most of your money and enjoying it while appreciating it. The book, Mr. Waggoner said, changed his outlook on retirement.
“I decided to focus on the present and seize opportunities to make a difference while I was still alive,” said Mr. Wagoner, of Alexandria, Virginia. That included working with his alma mater, Samuel Ginn College of Engineering at Auburn University in Alabama, to establish a scholarship and give his two adult sons a generous sum of money last Christmas.
“It allowed me to see her joy while she was still alive,” Mr. Wagoner said, “and that’s meaningful to me and to her.”