How to Transition From Saving to Spending

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November 12, 2024

What are you afraid of?

Last month, Allianz Life Insurance Company released its 2024 annual retirement study. Among the findings emerged a notable trend: Americans are fearful of transitioning from saving for retirement to spending in retirement.

Specifically, the study found that:

• 56% have no plan on how they will access income in retirement
• 48% worry they’ll live too frugally and not enjoy retirement to its fullest
• 45% express concern about how to best take distributions from retirement savings

These findings aren’t necessarily surprising. People work their entire lives to ensure they’re sufficiently covered in retirement. Worrying about prematurely exhausting that nest egg is natural, and convincing yourself to spend those savings once retired can be challenging, especially when looking at the root causes of Americans’ concerns.

Inflation tops the list, with 42% of respondents worried about increasing costs. Longevity is another issue, with 35% of those surveyed saying they’re fearful of outliving their money. And, perhaps unique to America, 32% said they’re hesitant to spend their retirement savings because of health care costs. 

So what can you do? For those concerned about how to tap your savings to get income in retirement, or how to best manage distributions, educate yourself. Money’s retirement hub has resources that explain that, and much more, which can help put your mind at ease.

And for the 48% of you who worry you’ll live too frugally and not enjoy retirement as much, don’t hesitate to treat yourself. You’ve earned at least that. To quote Oscar Wilde, “Everything in moderation, including moderation.”

— Jordan Chussler, investing and banking editor

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Cleveland, OH | Getty Images

In America's 50 largest cities, 32.1% of renters paid less than $1,000 per month in 2023, according to a report by real estate company Redfin. That share is down from about 50% in 2012. But these 15 cities have the highest share of rents under $1,000.

Studies have shown that more than half of Americans over age 65 will require some form of long-term care. However, nursing homes and assisted living facilities are not covered by Medicare or Medigap unless medical care is needed. So what happens when you need help with daily activities like bathing, dressing and managing medications? One way to be prepared is by having a long-term care insurance policy. The right policy can provide you with the financial support you’ll need during your golden years.

Check out Money’s list of top-rated long-term care insurance providers and find a plan that fits your needs.

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