Saving for Retirement Was Easy. Spending It Is Hard.
How do you spend money confidently after 40 years trying not to?
I write about retirement a lot. Part of the reason is because I’m staring down my own retirement future. But it’s also because every day I hear from people who come to Wealthramp worried about running out of money during retirement and whether they can really afford to stop working. And I truly think saving for retirement may have been the easier part.
Now it’s about learning how to spend the money confidently after 40 years trying not to.
A million dollars still sounds like it’s enough to support a good lifestyle for the rest of your life, and it may be, but retirement math in 2026 looks very different than it did twenty years ago.
Morningstar’s latest research suggests roughly a 3.9% starting withdrawal rate for retirees seeking a high probability that their savings will last 30 years. That means someone with $1 million invested may realistically generate about $39,000 a year from the portfolio before Social Security.
Add another $35,000 to $45,000 from Social Security for a couple and suddenly the household may realistically be living on roughly $80,000 gross income before taxes.
Comfortable in some places. Tight in others depending on where you live, and how you live.
Now layer in inflation that averages 3% annually. I’m using 3% because it’s much closer to what many economists and retirement planners now view as a realistic long-term planning assumption.
Inflation erodes your money over time so a lifestyle costing $100,000 today could require roughly $135,000 in ten years.
This is where I see retirees often split into two camps.
One group becomes really anxious, almost paranoid about overspending. Every larger expense suddenly comes with huge consequences. They travel and spend but do it with a sense of constant worry.
The other group underspends almost reflexively. They hold back from experiences they could easily afford because they never developed real confidence about what was actually safe to spend. In other words, their retirement plan was never really a ‘spending plan.’
Many people I talk to share that they believed they already had a withdrawal plan because in 2018 they sat down with the guy at Fidelity who printed out a report with pie charts and projections, and confidently told them: “You’re going to be fine. You can retire.”
I’m going to say this very strongly and with a lot of confidence myself: this is one of the few moments in life where you truly need to sit down with a highly qualified, fee-only fiduciary advisor who specializes in retirement income planning. (You can always find one here).
Retirement today is too complex — inflation, taxes, healthcare costs, Social Security timing, withdrawal strategies, market volatility — and the stakes are simply too high to rely on old projections or assumptions, even for financially sophisticated people.
Frankly, I’m doing the same for myself. I know a lot about retirement planning after 30 years, but I’m going to be a lot more confident getting a pair of fresh eyes from an advisor — a peer who I know is highly qualified and won’t be afraid to tell me what I need to hear. In other words: an expert who’s objective.
I’ve also challenged my own thinking over the last few years about retirement itself. Why does retirement have to be one big ‘on’ or ‘off’ switch to work or not work?
I think the healthier model today is a dimmer switch approach. Flexibility and optionality become the real goal rather than unplug completely. Working because I want to means that even earning a small income dramatically reduces both financial and emotional pressure.
If that person with the $1 million portfolio earns even an extra $20,000 to $30,000 a year after taxes through part-time work, consulting, seasonal work, or remote work for a few additional years, it means they may only need to withdraw $10,000 to $15,000 a year from investments for a period of time instead of the full roughly $39,000.
Even just a couple of years of extra income adds up. That reduced pressure during the early retirement years while investments continue compounding can preserve tens of thousands, and sometimes substantially more, over someone’s lifetime.
Even more importantly, people feel less trapped. That’s why I think people should focus less on some mythical “perfect retirement number” and more on building a retirement plan that can evolve as life changes.
If you’d like to explore how a one-time financial plan can meet your needs, get started here.
I’d genuinely love to hear from you about this. What are you hoping retirement will actually feel like for you — security, freedom, purpose, flexibility, family time, something else entirely? Put your thoughts in the comments.
Great thoughts!
I would just add that people should focus just as much on planning for non-financial aspects of retirement, as they do the money part.
Two benefits: far better wellbeing if planned before retirement, and also those non-financial aspects often have financial ramifications.
I’ve written some articles about finding meaning in retirement, if anyone’s interested.
The dimmer switch framing is something I wish more people talked about. The all-or-nothing model creates so much pressure — especially for women who may have had interrupted careers and already feel like they're starting from behind.