Why Playing It Safe in Retirement Can Backfire
#RetirementPlanning #PersonalFinance #MorningstarResearch
Plus, three ways retirees can determine if they’re underspending.
Will you give yourself permission to fully enjoy your nest egg? Many retirees spent years saving to enjoy this chapter of their lives, but when they finally get there, a lot of them hold back. Of course, lavish spending can be a problem in retirees’ golden years. But so can not spending enough! New Morningstar research has found retirees often withdraw their money very conservatively, even when they’re not especially afraid of running out of money. As a result, they might deny themselves a dream vacation or trying new hobbies. So, what’s behind it, and how can you learn to spend more in retirement and still live within your means? One of the researchers is Dr. Danielle Labotka, who’s a behavioral scientist for Morningstar.
Is Your Cautious Retirement Spending Doing More Harm Than Good?
On this episode:
00:00:00 Welcome
00:01:07 Why Morningstar researchers studied retirement underspending
00:02:35 How retirees decide how much to spend
00:03:30 Why simple withdrawal strategies generally lead to underspending
00:04:49 What typically happens to retirees’ wealth over time
00:05:32 Why cautious spending persists even when retirees can afford more
00:07:42 Three ways to tell if you’re underspending in retirement
Watch more from Morningstar:
Why Do Active Funds Lag Even With Winning Picks? https://youtu.be/szYNPz6QRMQ?si=kwB67HMBm0Wz2WY6
Target-Date Funds With Annuities Are Gaining Ground. Is That Good for Your Retirement Plan? https://youtu.be/qPeNAfjSc1A?si=BdG-VUb13IdLxosT
AI ETFs Are on the Rise. Are They Worth the Risk? https://youtu.be/Oc8ft0x71dM?si=ppGypDXIHT6Cof9H
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This episode is sponsored by Vanguard: https://advisors.vanguard.com/engagement/fixed-income
