Disclaimer: This Inside South Florida segment is sponsored by Corebridge Financial. All opinions and views are of the advertiser and does not reflect the same of WSFL-TV.
Many Americans spend decades carefully saving for retirement, but new research from Corebridge Financial shows that when the time finally comes to spend that money, many retirees freeze up.
Terri Fiedler, president of retirement services at Corebridge Financial, said the findings point to a significant gap between expectations and reality.
"Our research reveals that there's actually a disconnect between the retirement that people envision and how they feel about spending that money when they actually get into retirement," Fiedler said. "Our study also shows that 6 in 10 people use words like freedom and enjoyment when they think about retirement. But only a quarter of those people feel comfortable with seeing their assets decline to fund their lifestyle."
Fiedler said the root of the problem is psychological.
"People have worked their entire careers to save and invest for retirement, but they haven't prepared themselves psychologically to spend that money," Fiedler said.
Jean Chatzky, co-founder of HerMoney, said fear of the unknown is a major driver of retirement spending anxiety.
"A whole bunch of unknowns are driving this. We don't know how long we're going to live or what health care is going to cost, or what the markets are going to do," Chatzky said. "As a result, we're hoarding assets in retirement. 40% of people tell us they're not spending as much as they would like to be spending once they're in retirement."
Chatzky said having a plan can make a meaningful difference.
"If they have a plan that seems to free things up a bit and make people feel more empowered about using their resources," Chatzky said.
On the question of whether retirees should rely on the traditional 4% rule to guide their spending, Fiedler cautioned against a one-size-fits-all approach.
"Rules can be a starting point, but retirement is really very, very personal and complex," Fiedler said. "Having a strategy that supports your priorities and your circumstances, having a strategy that fits your priorities and your situation, is a good starting point."
Chatzky offered practical steps for those looking to build confidence around retirement spending.
"Start figuring out what your retirement is going to look like. When is it going to happen? Where is it going to happen? What is it likely to cost? Get yourself to a financial advisor to start putting together a plan," Chatzky said.
More information is available at Corebridge Financial.
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