The Transition to Spending – Retire Before Dad

One of the more common retirement concerns I hear from new subscribers is the transition from saving for retirement to spending retirement savings.

During our careers, we’re programmed to sacrifice spending to invest in accounts we don’t plan to use for decades.

But when “decades later” arrives, retirees don’t want to spend what’s accumulated.

The reasons for this mindset are many.

First, some are fortunate to have a pension or Social Security and other income that sufficiently supports their modest lifestyles.

If the pension covers all the necessary expenses, why draw down savings for luxuries when you might need them for something else?

Sufficient, reliable retirement income allows you to maintain the spend-less-than-you-earn mentality fortified in the preceding decades.

Fear of a market downturn is another. When the market falls (and it always does), wealth disappears quickly. It’s scary.

Market Turmoil headlines dominate the business channels, but the market recovery chyron doesn’t attract as much attention.

Anticipating long-term medical expenses is a valid reason to maintain some assets.

Excessive or “bonus” spending today feels like a risk when you see others drawing down their life savings on memory care or nursing homes.

But the many variables make it challenging to estimate costs. Easier to overestimate.

Lastly, the primary consequence of not spending your retirement savings is leaving it to the next generation.

For many parents, leaving a legacy is a net positive outcome versus spending the money on themselves.

I’ve watched my parents settle into the comfort zone of a pension and Social Security covering their expenses, leaving a surplus every month.

Now in their 80s, they only sell investments to satisfy required minimum distributions (RMDs).

They spend when they need to spend, treat themselves to nice meals, splurge on grandkids, and buy new cars when the old ones hit their teens.

But aside from that, their lifestyles haven’t changed much since their working years.

For those without a pension, the discomfort of selling assets for living expenses is real.

I’m not retired. But I’m already selling some assets to pay for things that my irregular income doesn’t cover.

My family just returned from a two-week Spring Break trip, paid for, in part, by selling some investments.

When I had a full-time job, I could cover vacations from my paycheck, but I also only had time for a one-week trip.

As a self-employed person, I can treat my family to more memorable adventures if I’m willing to tap into savings.

More noticeably to my family, I’m comfortable spending more while traveling, saying yes to their constant requests for more food, drinks, and souvenirs at overpriced tourist traps.

It’s taken me almost three years, but I’m comfortable spending some of the investments I made decades ago to live the lifestyle I want now.

However, the market has been strong. Watching my account balances continue to rise even after selling makes the process more strategic than regretful.

When the market turns, I WILL NOT feel so comfortable.

But I have faith in the math and the software tools (e.g., Boldin, ProjectionLab) that visualize spending, asset growth, and success probabilities.

Plus, I still receive dividends and have an active income, and I’m withdrawing less than 1% of my invested assets.

The 4% rule of thumb says you can withdraw that much each year and still have enough cash for a 30-year retirement.

New research says even up to 5% is safe. My withdrawals are nowhere near that (

The research behind these withdrawal rates accounted for worst-case scenarios, not the average.

So even if 2026 becomes the worst market year since 2008, the math holds.

That’s easier to believe in market highs than market lows — but true in both.

Featured image by Alicja via Pixabay.