Americans Aren’t Spending Their Retirement Savings

When my father died, more than 20 years ago, he left my mother with a paid-off Philadelphia apartment, a modest pension, Social Security, and $1.6 million in retirement and brokerage accounts.

My mother lived well, but frugally.

She loved a Saturday at the boutiques but never got over waiting for a sale.

She delighted in orchids but would buy them from only Trader Joe’s, where the blooms could be had for $10.99.

“They last longer,” she’d argue.

And once a year, she would ask me to go over her budget to make sure she was doing okay.

“More than okay,” I’d tell her.

My brothers and I encouraged her to spend—to take that trip, to redo that bedroom.

But she limited herself to the pension and Social Security checks and the interest she was earning while refusing to touch the principal.

When she passed away two years ago, she no longer had the $1.6 million my father left.

She had $1.7 million.

My mother’s behavior turns out to be quite common.

A landmark 2018 study by the Employee Benefit Research Institute found that the median individual with more than $500,000 in savings had, 20 years into retirement, spent just 12 percent of that sum.

And a Corebridge/Greenwald Research survey of older adults with at least $100,000 showed that only 28 percent were comfortable watching their savings taper off to cover living expenses, ostensibly exactly what the money was saved for in the first place.