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Billionaire investor Ray Dalio has a blunt line for anyone who feels rich on paper: “everybody says ‘I’m worth a billion dollars’ but ok, try to spend that.”
He said it at the Forbes Global CEO Conference in Singapore on Oct. 7. His point: “In order to spend that you have to sell wealth in order to get money—and so the bubble usually pricks at that.” (1)
Dalio was talking about AI stocks and a possible bubble. I’ll leave the bubble call to him. But his line about spending applies to nearly every retiree, just with fewer zeros.
I’m a CPA, and I’ve made millions in stocks in the 45 years I’ve been investing. Here’s what that taught me: wealth on a statement and money you can spend are two different things.
When I sold half my Nvidia shares in 2025, I took about $115,000 in profit off the table. That was money. The other half is still wealth — a number that moves every day.
Retirees face the same conversion problem, with a tax bill and a calendar attached. Withdrawals from a traditional IRA are generally taxed at your income tax rate, and the IRS requires your first required minimum distribution for the year you turn 73. (2)
And many people start converting sooner than they planned. In the Employee Benefit Research Institute’s 2026 Retirement Confidence Survey, nearly half of retirees said they retired earlier than planned, and the median retirement age was 62. (3)
Here are 5 reasons your retirement account isn’t quite the money it looks like — and what to do about each.
1. Your IRA balance is a before-tax number
If you have $1 million in a traditional IRA or 401(k), you don’t have $1 million to spend. Withdrawals are generally taxed at your income tax rate; the main exception is money you contributed after tax. (2)
Simple math: if every dollar came out taxed at 22%, about $220,000 would go to federal income tax. State tax, where it applies, comes on top. Plan your spending on the after-tax number.
2. The government decides when you start selling
You can’t leave a traditional IRA alone forever. The IRS requires your first minimum distribution for the year you reach 73. (2)
That means you’ll be pulling money out every year from then on, which usually means selling something, in good markets and bad ones. The question is whether you’ve decided in advance what you’ll sell.
3. Selling in a down market makes a loss permanent
This is Dalio’s point in miniature. Paper losses can recover. Losses you lock in by selling can’t.
Say your $1 million account drops 20% to $800,000. To get back to $1 million, it needs to gain 25%. Now say you also withdraw $50,000 to live on, leaving $750,000. Getting back to $1 million now takes a gain of about 33%.
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4. Keep a cash cushion so the market never picks your selling date
A common rule of thumb: keep a year or two of planned withdrawals in cash or short-term savings. When stocks fall, you spend the cash and give your investments time to recover. When stocks are up, you refill it.
Getting the order right — what to sell, from which account and when — is where a good advisor earns their fee.
A free service like SmartAsset matches you with up to three fiduciary financial advisors, who are legally required to put your interests first. It’s aimed at people with $100,000 or more in investments.
The questionnaire takes about 10 minutes and asks for a phone number near the end, but you control whether and when you respond to anyone. SmartAsset only makes the match; the advice comes from the advisor you choose. Find a fiduciary advisor through SmartAsset.
5. Your house is wealth, not money, too
If you own your home, some of your wealth sits in the house. And like Dalio’s billion, home equity doesn’t buy groceries until you sell, borrow or otherwise turn it into cash.
If you’re 62 or older, the equity in your home could become cash you can use now. A reverse mortgage lets eligible homeowners convert part of their home equity into funds — while keeping ownership of their home.
It could free up your monthly budget with no required monthly mortgage payment*, cover everyday expenses or build an emergency cushion. See how a reverse mortgage works and whether you qualify.
*A reverse mortgage still requires borrowers to pay property taxes, homeowners insurance and home maintenance. The loan must be repaid when the home is sold or the last borrower leaves the home.
My honest take
Dalio’s line sounds like a billionaire’s problem. It isn’t. It’s the central problem of retirement.
For 40 years you build wealth. Then, almost overnight, you need it to become money — every month, on a schedule, after taxes, in whatever market you’re handed.
The people who do this well decide in advance what they’ll sell and when. The people who don’t let the market decide for them.
Your account balance is a promise, not a paycheck. Turn it into cash on your schedule, not the market’s.
Sources: 1. Forbes; 2. IRS; 3. Employee Benefit Research Institute
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