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The Surprising Way Retirees Are Spending Their Money Thumbnail

The Surprising Way Retirees Are Spending Their Money

More and more retirees are doing something very surprising with their nest eggs.


OK, OK, I’m exaggerating a little bit. After all, cracking open that nest egg you’ve worked so hard for and finding money that will support you through your golden years is definitely a very big something.

But most folks who follow the kind of diversified, long-term strategy we advocate at Keen Wealth will retire with a significant cushion of money to last their lifetime. What’s interesting is we find clients sometimes have trouble switching from a savings mode to a spending mode in retirement.

In a good portion of the cases, they’re spending their money relatively conservatively: paying their bills, maybe indulging in a night out or two.

Why is that? Why do retirees sometimes deny themselves comforts, luxuries, and experiences they can afford, and that they deserve to enjoy after a lifetime of diligent planning, saving, and investing?

Trouble flipping the switch

For many new retirees, that very routine of planning, saving, and investing is an engrained routine. They are so used to making those deposits that they have a hard time stopping! They stay in “savings mode” rather than flipping the switch to “reward mode.” They’ve spent their whole working lives planning to have enough money for retirement, and now they’re worried that it won’t be enough.

I certainly understand why so many folks are worried about running out of money in retirement. As we discussed recently, longer life expectancy is leading to higher health care costs across the board. Pensions are becoming rarer. Our tumultuous politics make folks nervous about how the government might affect taxes, Social Security, interest rates, and the markets.

But if you’ve worked with a fiduciary advisor and committed to a long-term plan, your basic costs of living shouldn’t be keeping you up at night. You can always come in and talk to us about any big ticket purchases you’re contemplating. We’ll help you double-check that your plan covers some fun and look for any adjustments that will make you feel more comfortable about the cost. We can also help you plan for any specialized health care needs and put you in touch with pros who will help you make the best Medicare choices.

Familiar (dis)comforts

Have you ever read those studies about how lottery winners aren’t any happier than the rest of us? It sure sounds hard to believe, but the simple fact is that people are very adaptable. We get used to our situation in life, both the good and the bad.

We find comfort in our routines. What we find though, is a successful retirement is an ART that revolves around the Activities you enjoy doing, Relationships with the people you love, and a new schedule that gives you Time to explore your passions. So while routines are comforting, you might want to experiment a bit and try some new things in retirement. You may be surprised at how invigorating it can be.

Again, check with us if you’re worried that practicing this ART might throw off your spending and withdrawal rates.

Your parents’ retirement

We inherit many of our attitudes about money from our parents. We watched them deal with their finances when we were growing up. We heard them whispering about that fancy new car the neighbors bought. We saw how their feelings towards money affected holidays and vacations.

And if you’re a baby boomer, there’s a good chance you absorbed money ideas that were profoundly influenced by your parents’ experiences of the Great Depression and World War II. That belt-tightening probably carried over into how your parents lived in retirement as well.

But your retirement is going to be very different than your parents’ retirement. Advances in technology and our understanding of fitness and nutrition may keep you healthier and more active than retirees from a generation ago. Advances in communication and transportation have made the world much smaller, its wonders and opportunities for learning more accessible. You’re going to have time to create an exciting new chapter in your life.

And your financial plan is going to give you the resources to live that chapter to its fullest. If you’re having trouble “flipping the switch” and getting into a reward mentality, please come in to Keen Wealth and talk to one of my fiduciary advisors. You deserve to live the most rewarding life possible in retirement. We can help.

About Bill

Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.

The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities. 

The Steve Sanduski Advisor Network, Belay Advisor, LLC and other third-party contributors to our blogs and podcasts are not affiliated with Keen Wealth Advisors. 

For additional details on Keen Wealth Advisors, please visit https://www.keenwealthadvisors.com/important-disclosures.

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