After decades of saving, deciding what to spend in retirement is its own skill.

By Matt D’Amico, CFP®, ChFC®

For 30 or 40 years, the assignment never changed. Save more. Fund the 401(k). Pay down the mortgage early. Building the balance is the obvious part of retirement planning, and you got good at it. Somewhere along the way the habit stopped being a strategy and became part of who you are.

Then retirement starts and the assignment flips. The money you spent a career safeguarding is now supposed to pay for your life, but how do you make the switch?

That transition is the real challenge. Two households can retire at the same time with identical savings, yet land in completely different places. One ends up afraid to spend a dollar on a long-awaited trip, while the other burns through cash by overspending on family.

In both cases, the issue isn’t the math, it’s how spending feels.

The Two Directions Retirement Spending Drifts

Underspending is the more common surprise. 

Research published by the Employee Benefit Research Institute in May 2026, drawing on three decades of Health and Retirement Study data, found that roughly one-third of retirees still held 100% or more of their original assets by their mid-eighties. 

Those aren’t people who ran out of money. They’re people who reached their 80s with a full balance and a list of things they never got around to doing.

Underspending rarely announces itself. It looks like the kitchen remodel pushed to next year, or the family reunion skipped because the timing felt extravagant. Each decision is defensible on its own. Stacked over 20 years, they add up to a retirement that was funded but not fully lived.

Overspending runs the other direction, and it tends to show up early. The first few years after a career ends carry real pent-up demand: the trip to Italy, the camper, the second bathroom. Add a paid-off mortgage and a lump-sum pension election, and the statement balance can look larger than the math supports. Withdrawals in those first years carry the most weight, because a dollar taken out at 63 isn’t invested through the decades that follow.

Different symptoms, same root cause: what spending feels like rather than what the plan can support.

The Emotional Triggers Behind the Decisions

A handful of these come up in nearly every client conversation.

Identity. After decades of saving, frugality becomes a personality trait rather than a tactic. When your self-image is built on discipline, writing a large check can feel like a character failure instead of the plan working as designed.

The missing paycheck. For your entire working life, money left the account and came back every two weeks. In retirement, the refill stops. Watching a balance drop with nothing arriving to replace it is uncomfortable, even when the withdrawal sits inside what the plan anticipated.

Fear of unexpected expenses. Many retirees hoard extra cash to protect against healthcare costs or market drops. But without a clear target, this “self-insurance” becomes an unnecessarily large reserve that stops them from enjoying their money.

An undefined legacy goal. Wanting to leave an inheritance is a worthy goal, but it needs a specific dollar amount attached. Without a clear number, every dollar you spend on yourself can feel like money you’re stealing from your children.

Requests from adult children. Whether it’s a down payment, a wedding, or a grandchild’s tuition, they arrive one at a time, each easy to say yes to, and few retirees ever total them up.

Calendar triggers. The first Social Security deposit. An inheritance. The first required minimum distribution… each changes the numbers, and each can prompt a spending decision made in a single afternoon.

Recognizing which trigger is driving a decision is most of the work; the rest is building a structure to check that instinct against.

Finding a Balance You Can Live With

The target is a spending level you can defend on a bad market day and enjoy on a good one. A few practices help.

Plan for phases, not a flat line. Retirement doesn’t typically cost the same every year. The early years tend to be the most expensive, travel, postponed projects, time with grandchildren while everyone is healthy. Spending often eases through the 70s as the pace slows, then can climb again if healthcare or long-term care enters the picture. Advisors often call these the go-go, slow-go, and no-go years. A plan built on one flat number for 30 years misjudges all three.

Build yourself a paycheck. Coordinating Social Security, pension income, and a defined withdrawal into a predictable monthly deposit gives your brain the rhythm it spent a career depending on. The EBRI research points the same way: retirees with reliable income streams tend to spend more comfortably than those drawing from a single balance.

Give every dollar a job. Essentials, discretionary spending, and legacy each get their own allocation. Our Retirement GPS Process treats income, investments, taxes, healthcare, and legacy as one connected picture, and approaches like the retirement bucket strategy exist for the same reason. When the travel money is labeled travel money, spending it stops feeling like a withdrawal.

Put a number on the legacy. Deciding on an actual figure you intend to leave turns an open-ended obligation into a line item. Everything above that line is yours to use.

Compare notes with your spouse. Couples rarely arrive at retirement with matching instincts. One wants the RV, the other wants the reserve. Putting both positions on the table early can prevent years of repeated friction.

Where This Leaves You

Retirement spending is a decision you’ll make a few hundred times a year, usually in the moment and usually with some emotion attached. A written plan doesn’t remove the emotion, but it gives you a reference point to weigh it against.

If you’d like a clearer view of what your plan can support, the team at Networth Advisors would be glad to talk it through. Call (800) 822-3639 or email schedule@networthadvisorsllc.com to start the conversation.

Frequently Asked Questions

Why is it so hard to spend money after you retire?

Because the habit runs backward. After decades of saving, spending feels like losing ground rather than following the plan. 

Three drivers show up most often:

  • Identity: Frugality has become a personality trait, not a tactic.
  • No replenishment: The paycheck stopped refilling the account.
  • Unscheduled costs: Health events and long-term care have no fixed price.

How do I know if I’m underspending in retirement?

Underspending shows up as postponed plans rather than financial strain. Watch for a portfolio balance that’s grown since you retired, trips you keep deferring, and withdrawals running well below what your plan allows. Networth Advisors builds a defined spending range into every retirement plan, so clients know what they can comfortably use.

Does retirement spending stay the same every year?

No. Inflation-adjusted spending typically follows a curve rather than a straight line, higher through the early active years, lower through the middle, then rising again as healthcare costs increase. Researchers call this the retirement spending smile. Planning around one fixed annual number tends to misjudge both ends of retirement.

About Matt

Matt D’Amico, CFP®, ChFC®, is a registered Investment Adviser Representative and financial advisor at Networth Advisors, LLC, a financial planning and wealth management firm in Canonsburg, PA. The firm is dedicated to helping clients enjoy a successful retirement, specializing in income planning and legacy preservation for pre-retirees and retirees. Matt excels at simplifying complex retirement concerns to help clients make smart financial decisions.

Matt discovered his passion for finance in college, inspired by a trusted mentor, and earned a degree in finance and business management from Saint Vincent College. Before joining Networth Advisors, he gained valuable experience at New York Life and MassMutual, where he obtained his Life, Accident & Health Insurance Licenses. Matt is also a CERTIFIED FINANCIAL PLANNER® professional and Chartered Financial Consultant®.

Outside of work, Matt is a sports junkie and music enthusiast. He enjoys spending time with friends, embarking on adventures with his wife, Kayla, and their mini labradoodle, Nellie. He is also the co-author of Networth for Retirement: Mapping Out Your Journey. To learn more about Matt, connect with him on LinkedIn.