'It’s not the climb up. It’s the way down': 38% of retirees have trouble spending their money — here's how to assuage anxiety over diminishing savings

He compares retirement to climbing a mountain. Climbers train to scale a mountain, but they rarely train for the descent.

“It’s not the climb up. It’s the way down,” says Supe. You spend your working life climbing that mountain: saving, maxing the match, buying and holding.

“The day you retire is the summit. And the money you’ve saved has to last you the rest of your life,” he says. “This is the most dangerous stretch — and the one almost nobody trained you for.”

Many retirees never make that descent. It’s the retirement paradox: they finally have money to spend, but they protect the balance instead.

They follow the same plan as they did on the ascent: never touching the principal and living below their means. But there are ways to safely enjoy the fruits of your labor with confidence.

Why retirees have spending anxiety

For many retirees, making the shift from saving to spending is one of the biggest challenges in retirement — and one they’re unprepared for. They train to save; they don’t train to spend.

Decumulation is the term for this descent: It means you convert your savings into income to support your lifestyle in retirement.

But more than two-thirds (70%) of American retirees believe it’s “very important” their nest egg doesn’t shrink in retirement, according to Corebridge Financial’s decumulation survey. And 38% say they’ve spent less than they wanted — not because they don’t have the money, but because they want to preserve the size of their nest egg.

This anxiety could be explained by what Corebridge describes as a “planning gap between the accumulation and decumulation phases of retirement.”

For example, only 29% of respondents aged 55+ have a plan for how they’ll withdraw money in retirement, and just 14% have a strategy for required minimum distribution (RMD) withdrawals.

And while one-third of respondents say they have a consistent withdrawal strategy, oftentimes they don’t have a broader retirement income plan. Almost half (46%) of those surveyed had never even heard of the term decumulation.

Spending hesitation appears to be largely due to concerns about inflation, market volatility and healthcare costs — rather than a desire to leave money to beneficiaries — according to the survey.

“Concerns about running out of money often shape spending habits that limit fulfillment later in life,” said Terri Fiedler, president of retirement services at Corebridge Financial, in a press release. “Having a thoughtful decumulation strategy can help individuals manage complex financial decisions and feel more secure about the future.”

Creating a decumulation plan

Creating a decumulation plan starts with understanding all of your income sources in retirement. For example, lifetime income could include Social Security (which is adjusted for inflation), pensions and annuities.

An annuity is purchased through an insurance company and, while it can be costly upfront, it turns your savings into a stream of guaranteed lifetime income.

If you take your Social Security retirement benefit early (as early as age 62), you’ll end up with a permanently reduced benefit, by up to 30%. To get your full benefit, you’ll have to wait until your full retirement age (FRA), between ages 66 and 67. But if you delay your benefit past your FRA, you’ll receive an annual 8% boost until age 70.

Covering your basic needs with guaranteed income could allow for more flexibility with other retirement savings, such as individual retirement accounts (IRAs), workplace savings plans like 401(k)s as well as brokerage accounts. These funds can supplement your basic needs or fund your retirement goals, like travel.

But having a plan to draw down those savings can help to stretch them further and, perhaps more importantly, provide peace of mind so you can actually enjoy your money in retirement.