Retirees Hesitant to Spend Savings, Annuities as a Potential Solution

“There was a recent survey by this life insurance company and they found that 39% of retirees are reluctant to spend their retirement savings. And then, something like close to three quarters of still working Americans said, I'm pretty sure I'm gonna be scared to spend when I get to that age too. I'm gonna be afraid to tap the money that I've built up over a long period of time. And I think this, I understand it. It's really hard to go from save, save, save, frugal, frugal, frugal to it's okay to spend the money that you've been able to build up. But I think it's really important to make that change, right? Because saving is ultimately just delayed spending. It's not about who dies with the most assets and a 401k wins. It's about utilizing that money later in your life. And there are ways, I think, to help with that. And actually, I'm going to talk to Jean Chatzky on the show soon. And Matt, she's got a book that helped me reframe how annuities can help people potentially in retirement. And typically, a lot of experts would say, oh, they're too expensive. And there is some truth to that. And I'll cover that with her. But there's also the truth to the stats that say retirees who opt for a more annuitized form of a form of regular income in retirement, they actually spend the money that they built up. They feel more comfortable with it because it acts like a paycheck, which is what they're used to from the working years. And so, um, yeah, I look forward to releasing that episode. Um, and talking to Jean, but this is just one of those things where being, it makes me sad that people are afraid to spend the money that they've, they've been able to accumulate.”

“But there's ways around that though too, right? Like I think the annuity can make a lot of sense for folks who, who are used to a paycheck, who, you know, who've earned a wage their entire life. They work for the man, but I mean, I've said this before, but I think everybody needs to practice pulling money together. out of their investments. They need to practice selling, not buying, and then actually buying stuff with the money that they've acquired from selling. But it's just, I want people to face the fear. And I think you do that just by little bits at a time, right? Like talk to Emily, right? This is CBT. This is cognitive behavioral therapy. This is widely researched, widely accepted. Many practitioners implement this type of therapy and it is addressing head on slowly initially at first. So you don't like, I don't know, I'm talking above my head, my depth at this point, but like it's practicing, it's getting better at it. And that's the kind of bootstrap DIY approach that especially for folks, I don't know, that I want to push folks towards. I would say maybe I have a more Like I might be naturally more disposed to think in that way because of my sort of more entrepreneurial, I don't know where my income is coming from mindset. Sometimes it's easier for you. And it's been like that for the past 20 years, basically, in the all-mix household. I understand. And so maybe because of that, over the past two decades, I've sort of built up. Like I've got calluses when it comes to how I feel when I'm unsure where my money is going to come from. But most people don't, right? Like they're used to that steady trickle, that nice stream. But I think there are ways though, if you are interested in saving more money, I think there are ways that you can expose yourself to that a little bit, to try it out. It doesn't have to be a big thing. You don't have to do it for like a massive renovation or purchasing another home. But like, yeah, let me take $ 5, 000 out to go towards this vacation or something like that. Like, what does that look like? What does that feel like?”