Spend Without Worry in Retirement

Fears of running out of money prevent many retirees from tapping the nest egg they’ve worked a lifetime to save. With these strategies, you can generate enough income to pursue your retirement dreams.

illustration of couple enjoying wine in retirement
(Image credit: Illustration by Julia Allum)

The Irish poet and playwright Oscar Wilde once said that it’s better to have a permanent income than to be fascinating—a sentiment many retirees undoubtedly share. Unfortunately, the decline of traditional pensions in favor of 401(k) plans (and other defined contribution plans) has forced many retirees to figure out how to make a lump sum of money—sometimes a very large lump sum—last as long as they do.

A growing body of research suggests that many retirees have responded to this challenge by withdrawing far less than they can afford to spend based on the amount they’ve saved and their average life expectancy. Research by the Employee Benefit Research Institute found that people with $500,000 or more in savings at retirement spent down less than 12% of their assets over 20 years.

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Sandra Block
Senior Editor, Kiplinger's Personal Finance

Block joined Kiplinger in June 2012 from USA Today, where she was a reporter and personal finance columnist for more than 15 years. Prior to that, she worked for the Akron Beacon-Journal and Dow Jones Newswires. In 1993, she was a Knight-Bagehot fellow in economics and business journalism at the Columbia University Graduate School of Journalism. She has a BA in communications from Bethany College in Bethany, W.Va.