Are You Being Too Frugal in Retirement?

Many people are so afraid of running out of money in retirement that they don’t fully enjoy their life. Here are four tips if fear is holding you back.

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For most of your life, you work hard to save to set yourself up to retire. Once you leave the workforce, it’s time to enjoy the fruits of your labor. But, despite all that preparation, many people are still afraid.

The fear is real. The majority of Americans (61%) are more afraid of running out of money than they are of death, according to the 2023 Annual Retirement Study from Allianz Life Insurance Company of North America (Allianz Life).(1) And it makes sense when risks to retirement can feel seemingly insurmountable.

Retirees worry about inflation and costs increasing for basic expenses, market volatility and financial crises. It can make you feel like you can’t afford to enjoy your life.

In some cases, the worry might be warranted — and we are not advocating throwing caution to the wind. But if you have planned properly for retirement, prepared for alternative outcomes and protected your income, you may be letting your fear keep you from enjoying your retirement. This overwhelming fear can actually lead to significantly underspending in retirement.

Underspending in retirement is more common than you would think, and it can lead to a less-than-satisfying retirement lifestyle, defeating the purpose of all that planning. So how do you strike the right balance between common-sense frugality and frivolity? Here are four tips to help you loosen the purse strings and live a little!

Kelly LaVigne, J.D.
Vice President, Advanced Markets, Allianz Life

Kelly LaVigne is vice president of advanced markets for Allianz Life Insurance Co., where he is responsible for the development of programs that assist financial professionals in serving clients with retirement, estate planning and tax-related strategies.