Countless workers scrimp and save for years with the goal of enjoying a comfortable retirement. Many of those folks do not abandon their penny-pinching ways once their golden years finally arrive.
Surprisingly, fear of running out of money is not the No. 1 factor that drives retirees to stay frugal, according to the Employee Benefit Research Institute’s (EBRI’s) Spending in Retirement Survey.
Instead, the survey — which asked 2,000 individuals ages 62 to 75 about their spending habits and their situation at and during retirement — found four more-common reasons that retirees keep their wallets shut.
The five reasons the retirees most often cited for not spending down assets are:
- Saving assets for an unforeseen cost later in retirement — 38%
- Feeling that spending down assets is unnecessary — 37%
- Wanting to leave as much as possible to heirs — 33%
- Simply feeling better when account balances remain high — 31%
- Fear of running out of money — 27%
Among these retirees, the average amount of current financial assets was $200,000, with a median of $75,000. More than two-thirds — 69% — said their standard of living is the same or higher than it was when they were working, and 61% believe their spending is appropriate for what they can afford.
The power of a fat nest egg should not be underestimated. Among survey respondents, 64% said saving as much as possible leaves them feeling happy and fulfilled. That finding seems to support recent research that has revealed that — contrary to common folk wisdom — having more money does indeed make people happier.
In fact, the retirees in the EBRI survey said they wish they had saved more for retirement. Just 18% said they saved more than was needed, while 46% reported saving less than they needed in retirement.
Saving for a great retirement
In life, it’s smart to learn from the wisdom of those who are in the place today that you are headed toward tomorrow. If many of today’s retirees wish they had saved more, chances are good you will feel the same way when you retire.
So, now is the time to begin building your retirement nest egg. The Money Talks News course The Only Retirement Guide You’ll Ever Need can get you off to a great start.
This 14-week boot camp offers everything you need to plan the rest of your life, know you’ll have enough money and make your retirement dreams a reality.
The course, intended for those who are 45 or older, can teach you everything from “Social Security secrets” to how to time your retirement.
For more tips on how to build and maintain a nest egg, check out “Your Top 5 Retirement Questions, Answered.”