The Top 6 Ways Retirees Plan to Spend Their Savings

Despite the uncertainties of the past two years, 73% of a representative sample of American workers, and 78% of retirees, recently told pollsters they’re feeling at least somewhat confident they’ll have enough money to live comfortably in retirement.

Roughly one-third of these optimists are “very confident,” according to the Employee Benefit Research Institute’s 2022 Retirement Confidence Survey.

Pollsters interviewed a diverse sample of more than 2,600 people age 25 and older, including workers and retirees. The EBRI routinely studies topics regarding workers’ retirement, health and other benefits.

We’ve focused on findings about how retirees (not including workers) are spending or plan to spend their retirement savings, aside from bills and necessities. Here are the retirees’ top choices when asked to select their priorities.

6. An inheritance

Retirees who say this is a top priority for how they use or will use their savings: 19%

“Saving/holding money aside so that you can leave an inheritance” was a priority for 19% of retirees polled.

If leaving an inheritance matters to you, take steps today to prepare the right legal documents so you’ll feel confident that your wishes will be carried out. For help getting started, check out:

• “8 Documents That Are Essential to Planning Your Estate”
• “7 Things You Should Not Include in Your Will”

5. Home upgrades

Retirees who say this is a top priority for how they use or will use their savings: 24%

Retirement often inspires people to examine how and where they want to live and prepare their homes for this next stage. About one-quarter of retirees in the EBRI’s survey named “spending on home improvements, renovations or home furnishing” as a top priority for their savings.

Here are “8 Essential Home Features for Aging in Place.”

4. Health or long-term care

Retirees who say this is a top priority for how they spend or will spend their savings: 31%

Health care and long-term care put big demands on retiree budgets.

The retirees in the survey seem to acknowledge that, as 31% chose “spending, saving or holding money aside for health or long-term care needs” as a top priority for their retirement savings.

3. Leisure activities

Retirees who say this is a top priority for how they use or will use their savings: 35%

Of those surveyed, 35% are spending, or will spend, savings on their own leisure or entertainment activities. That includes dining out and buying clothes, electronics or media.

Incidentally, entertainment also is among the expenses we cite in “11 Huge Retirement Costs That Are Often Overlooked.”

2. Growth of savings

Retirees who say this is a top priority for how they use or will use their savings: 40%

Retirement can last several decades or more, which means most retirees will need to invest savings so the money will grow. “Holding money aside, saving or investing the money so that it continues to grow” was a top concern for 40% of retirees surveyed.

1. Travel

Retirees who say this is a top priority for how they use or will use their savings: 45%

Wanderlust is big in the golden years, the survey reveals. The largest share — 45% — of the retirees surveyed said they are using, or plan to use, retirement savings to fund travel.