Retirees aren’t spending enough of their nest eggs - Interesting Barton’s article

[EA-Sports]

Interesting article inline with a few threads here: https://apple.news/AEBCB_5nZRNuDsuUpQxWjJA

 

[MichaelB]

Interesting article inline with a few threads here: https://apple.news/AEBCB_5nZRNuDsuUpQxWjJA

This is a naked link to an article behind a paywall. Do you think you could summarize it for us?

 

[NW-Bound]

I found the same article readable free at this site: https://editorials24.com/2021/12/retirees-arent-spending-enough-of-their-nest-eggs-heres-why/.

Some excepts:

A recent study from the Employee Benefit Research Institute surveyed average retirees between age 62 and 75 and found that three-quarters of them had seen their assets remain the same or grow in retirement... A robust stock market has also been a key factor in this dynamic—helping retirement portfolios stay steady or even grow as many retirees still spend what they need...

Retirees are heavily influenced by the experience of family members. “We have clients where the parents died at a young age, and they think very differently than people whose parents died in their 90s and needed care,” says David Frisch, a financial advisor in Melville, N.Y.

Other factors affect spending rates. Research has found that retirees who get most of their income from pensions and annuities spend more freely in retirement than those who rely on income from an investment portfolio...

 

[EA-Sports]

This is a naked link to an article behind a paywall. Do you think you could summarize it for us?

Sorry, didn’t realize it was a naked link:

“A robust stock market has also been a key factor in this dynamic—helping retirement portfolios stay steady or even grow as many retirees still spend what they need.

Such growth strengthens the case for increased spending in retirement. So why the reluctance to spend? Academics and financial advisors say the fear of running out of money is the biggest reason. Retirees don’t know how long they are going to live, what medical expenses they’ll face, and how their investment portfolios will perform over decades. So they protect themselves by spending less than they could.”

That’s a pretty common knowledge but this is a twist I wasn’t aware of:

“Other factors affect spending rates. Research has found that retirees who get most of their income from pensions and annuities spend more freely in retirement than those who rely on income from an investment portfolio.”

And in closing:

“A big predictor of how someone will spend in retirement is how they spend while they’re working. Elser, the Indianapolis advisor, says clients that tend to save money while working tend to keep saving money after they retire. And clients that tended to overspend while working keep doing so as retirees.

“You really cannot change the core values people have,” she says. “We can help people to change at the margins.””

 

[EA-Sports]

Let’s try it again:

https://www.barrons.com/articles/retirement-spending-nest-eggs-savings-51639778414

 

[Aerides]

A naked link is defined as a post like this:

Hey lookie here: <<link>>

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As opposed to the preferred way to post:

Hey, here's a thing it's interesting because X,Y,Z, and I thought about A,B,C and would like other folks input and wanted to share, also this quote from it stands out:
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<<link>>

 

[MichaelB]

Sorry, didn’t realize it was a naked link:

“A robust stock market has also been a key factor in this dynamic—helping retirement portfolios stay steady or even grow as many retirees still spend what they need.

./.

And in closing:

“A big predictor of how someone will spend in retirement is how they spend while they’re working. Elser, the Indianapolis advisor, says clients that tend to save money while working tend to keep saving money after they retire. And clients that tended to overspend while working keep doing so as retirees.

“You really cannot change the core values people have,” she says. “We can help people to change at the margins.””

Thanks for the explanation

A naked link is defined as a post like this:

Hey lookie here: <<link>>

-----

As opposed to the preferred way to post:

Hey, here's a thing it's interesting because X,Y,Z, and I thought about A,B,C and would like other folks input and wanted to share, also this quote from it stands out:
"blah...blah...blah"
<<link>>

+1

 

[EA-Sports]

A naked link is defined as a post like this:

Hey lookie here: <<link>>

-----

As opposed to the preferred way to post:

Hey, here's a thing it's interesting because X,Y,Z, and I thought about A,B,C and would like other folks input and wanted to share, also this quote from it stands out:
"blah...blah...blah"
<<link>>

[emoji106] learned something new everyday

 

[Chuckanut]

I guess if my happiness was dependent on spending more I would do so. But, it isn't.

Besides life has taught me that there are plenty odd-ball unexpected events that will take place, each of which will cause me to write a check for four or even five figures.

Add in Covid, which has caused me to curtail some of my travel exhenses.

 

[Chuckanut]

Hey! I am blowing 99¢ a month on Hulu for for the next 12 months!!!

 

[Alan]

Naked links are also explained in the Community Rules

https://www.early-retirement.org/forums/misc.php?do=sknetwork&page=rules

Posting standards:
Forum members may use standard fonts available on the forum. The standard font size is 2. The use of bold, large or colored fonts should be used sparingly. Posts containing inappropriate formatting will be removed or modified at our discretion; e.g. all caps or excessive color. E-mail addresses, url's and business names are not appropriate forum user names. Please do not post “naked” links, defined as links posted without explanation, interpretation or context.

 

[GrayHare]

Inflation, if it sticks around, will encourage all, not just retirees, to spend more before the price goes up.

 

[pacergal]

The article had a couple of interesting points that resonated with me.

I, too, have a set point that I don't want to see our balances go below. They haven't yet, and probably won't, but we would certainly curtail spending if it got close. It's psychological, but true to me.
Also, I don't know what the future holds, and we don't have LTC insurance, so our savings is it, and we don't have nearly as much as many here.

We are blessed to have a pension and SS, so our budget is based on those values and not a yearly drawdown plan on savings, even though Firecalc says we could spend "X" more. We have done a few small withdrawals, but less than we could.
It makes a difference I am sure.

 

[braumeister]

Inflation, if it sticks around, will encourage all, not just retirees, to spend more before the price goes up.

Not necessarily. In my experience people will only spend on necessities in that environment.

I lived for a few years in a hyperinflationary place, where they would periodically issue new currency and your 1,000 oldbucks were suddenly converted to 1 newbuck. Most people put every spare cent into uninsured but high interest accounts and hoped for the best.