Permission to Spend

For decades, retirement planning is mostly about accumulation. Save consistently. Invest. Take advantage of your retirement plan. Try not to touch the money. Then retirement arrives, and suddenly we ask people to do almost the exact opposite.

This may surprise you, but

One of my biggest concerns for some of my clients isn’t that they’ll spend too much in retirement. It’s that they won’t spend enough.

Many of the people I work with have spent 30 or 40 years being careful with money. They lived below their means, saved consistently, invested for the future, and built the financial security they hoped to have when they retired. Then they get there—and discover that spending the money can be much harder than saving it was.

A paycheck that once arrived every two weeks may be gone, and now some of their income needs to come from the portfolio they worked so hard to build. Even when the financial plan says they can afford the trip, replace the car, help their children, or simply spend a little more on themselves, actually doing it can feel uncomfortable.

The habits that helped you build financial security don’t automatically disappear when you retire. And sometimes, those same habits can get in the way of enjoying what you spent decades building.

The Habits That Got You Here Don’t Disappear at Retirement

Careful savers tend to stay careful savers. That’s part of the reason they’re in a strong financial position in the first place. They’ve spent their adult lives learning that saving is good, spending requires thought, and watching an account balance grow means they’re making progress.

Retirement changes the math, but it doesn’t necessarily change the mindset.

I see this in all sorts of little ways. Someone has plenty of room in the plan for a family vacation but hesitates to book it. A couple can comfortably afford to replace an aging car, but taking $50,000 out of an investment account feels very different from buying a car when they were both receiving paychecks. Someone else may continue living on essentially the same budget they had before retirement, even though they had always pictured traveling or doing more once they had the time.

Sometimes it even shows up as repeatedly checking account balances. If you’ve spent decades measuring financial progress by how much you’ve accumulated, seeing the balance go down can feel like something is wrong—even when withdrawals are exactly what the money was intended for.

But in retirement, a declining balance isn’t necessarily evidence of a failing plan. It may simply mean your money is doing the job you saved it to do.

Spending Is a Different Retirement Skill

We talk a lot about the discipline required to save, but there can also be a skill to spending confidently. It isn’t recklessness or permission to abandon the plan. It’s understanding what you can reasonably spend, knowing what resources are there for later, and being able to use some of your money today without feeling that every withdrawal threatens your future.

One way to make that easier is to give your money different jobs. Some may be there to fund your current lifestyle. Some may be invested for needs much farther into the future. Other dollars may be set aside for healthcare or unexpected expenses, while another portion may ultimately be intended for children, grandchildren, or charity.

When you know what the money is for, spending it can feel different. A $15,000 family trip isn’t simply $15,000 disappearing from the portfolio. It may be money being used for exactly the kind of experience the retirement plan was designed to support.

That distinction matters. The goal isn’t to spend simply because the money is there. It’s to be intentional about both the money you protect and the money you give yourself permission to use.

When a “Good” Retirement Projection Makes You More Nervous

There’s another behavior I see occasionally with retirement planning: people can become very attached to the probability-of-success number in their financial plan.

Monte Carlo Analysis can be a useful planning tool because it tests a retirement strategy across many different combinations of market returns and assumptions. But the resulting probability isn’t a score you need to keep pushing toward 100%.

Imagine your plan shows a very high probability of success. You decide you’d like to take your children and grandchildren on a special trip, and adding that expense causes the probability to move from 98% to 94%. It can be tempting to look at the lower number and conclude that the trip is financially irresponsible.

That isn’t necessarily what the analysis is telling you.

A 98% probability isn’t a guarantee, just as 94% doesn’t mean you have a 6% chance of running out of money. These projections are based on assumptions, and real life will unfold differently. Markets will change, spending will change, tax laws will change, and your goals may change too.

This is one reason I don’t think retirement planning should be treated as a one-time pass/fail calculation. We can continue looking at what is actually happening with your portfolio, spending, taxes and life, and adjust along the way. Sometimes the appropriate adjustment will be to spend less. But sometimes the numbers may be telling us something lifelong savers have trouble hearing: you can afford to spend more.

What Are You Saving the Money For?

Most people understandably say their goal is to make sure they never run out of money. That’s an important part of retirement planning. But once we’ve established that a plan is on solid footing, I think there’s another question worth asking: What do you want the money to make possible?

Maybe it’s traveling while you’re healthy enough to enjoy it. Maybe it’s spending a month somewhere warm each winter, helping a grandchild with college, taking the whole family on vacation, giving more to organizations you care about, or simply enjoying everyday life without analyzing every purchase.

This is where our philosophy of aligning money with meaning becomes particularly important. Accumulating the largest possible portfolio isn’t necessarily the goal. The goal is to have the resources to support the life that matters to you.

Timing matters too. Money available to you at 90 may not have the same usefulness as it did at 65 or 70. There are trips, activities, and experiences that may be easier to enjoy during the earlier years of retirement. That doesn’t mean spending indiscriminately while you’re younger. It means recognizing that there can be a cost to continually postponing the things you’ve spent your life saving to do.

A Financial Plan Can Provide More Than Security

We often think the purpose of a financial plan is to answer one question: Am I going to be okay? That’s certainly part of it. But I think a good retirement plan can provide something else that is especially valuable for lifelong savers: permission.

Permission to take the trip because we’ve already accounted for your future income needs. Permission to help the kids because we’ve looked at what the gift means for the rest of your plan. Permission to spend more during your healthier years because we know there is flexibility to adjust later if circumstances change.

Of course, the answer isn’t always yes. Sometimes we run the numbers and discover that a particular decision could put too much pressure on the plan. Having that information is valuable too. But if the numbers consistently show that you have enough and you’re still reluctant to use the money, perhaps the question needs to shift from “Can I afford this?” to “What am I saving it for?”

Learning to Enjoy What You Built

There is no universal right amount to spend in retirement. Your income, goals, family, health, legacy wishes, and comfort with uncertainty all shape what makes sense for you. This isn’t an argument for spending more simply because you can.

It’s a reframe.

You spent decades building the muscle to save. You planned, invested, delayed gratification, and made responsible choices to create financial security.

Retirement may require developing a different muscle: trusting the plan enough to enjoy some of what you built.

The goal was never simply to accumulate and protect money indefinitely. The money was there to support a life.

How Birch Street Can Help

At Birch Street Financial Advisors, retirement income planning isn’t just about determining whether your money will last. We help clients understand what their resources can reasonably support, how spending decisions affect the larger plan, and when adjustments may be appropriate as markets and life change.

Sometimes that means helping someone recognize that they need to be more cautious. But one of the more rewarding conversations is the opposite: helping a lifelong saver understand that the plan they worked so hard to build may finally be giving them permission to spend some of their money—and enjoy the retirement they were saving for all along.