Older Americans are afraid to spend their riches in retirement
Prudential Financial's Retirement Pulse survey shows retirees fear spending savings and prefer guaranteed income to avoid financial insecurity.
Older Americans are often reluctant to spend their retirement savings, according to a Prudential survey. A majority of retirees prefer preserving funds over depleting their nest eggs. The survey revealed that only 14% of respondents felt at ease spending monthly for enjoyment, such as hobbies, travel, and dining out. Nearly half of those surveyed hesitated to spend due to concerns about Social Security's future availability, while over one-third cited inflation and rising living costs as reasons for caution.
Many older Americans felt guilty spending on luxuries or entertainment, with 86% of those with over $500,000 in investable assets expressing reluctance to spend large sums on expensive purchases. A significant number of respondents reported feeling anxious about outliving their savings, with 44% of those with over $500,000 unsure about how long their money would last.
Prudential experts suggest that a guaranteed monthly income, such as an annuity, could alleviate this anxiety, as two-thirds of survey respondents preferred such a payment over a lump sum.
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