Even rich American seniors are scared to spend money in retirement — here’s how to spend more and be happier without the risk of outliving your cash

Determine a retirement budget

Having a clear spending plan in place is key now that your ‘accumulation years’ are over. Many retirees report that they wish they’d done more planning before retiring. Taking the time to assess your expenses now can help ease your fears.

One simple task you can do right now is to track every penny you spend, and on what. That way, you can see how much money you might need for the basics and anticipate any costs that might go down or go up.

For example, you plan to downsize in a few years, so your housing costs will go down. Or, you don’t travel much now, but want to in the future so that cost will go up.

Having a better understanding of what you’ll spend during retirement will help you to see how you can safely withdraw from your retirement accounts.

Using the 4% rule — where you withdraw 4% of your portfolio in your first year of retirement, then adjust the amount for inflation in the years that follow — can be a useful guideline. However, it might not be the best strategy for you.

Instead, finding a way to get a steady source of income to cover the essentials may be the way to go.

Retire richer: The secret to building wealth faster

Most people miss out on key opportunities to grow their wealth. Partnering with the right financial advisor can help you secure a brighter future. Learn how to make your money work harder for you today.

Discover the secret

Have a fixed source of income

The 2024 MassMutual Retirement Happiness Study found that the longer someone is retired, the less fear they have about financial uncertainty.

While there weren’t indicators as to why this may be, having a solid financial plan could help you ease fears and feel more comfortable spending more.

One such way to do so is by establishing your essential costs and making sure you have fixed income sources to cover them. Then, you look at what you have leftover to spend as your fun money.

You have several options to choose from when it comes to fixed income sources. One that most Americans qualify for is Social Security. There are also fixed-income securities, such as municipal bonds, whereby you’re paid interest at regular intervals.

Annuities are another popular option. You invest in or purchase a contract backed by an insurance company. You’re paid regularly, for a specified amount of time, based on premiums paid or a lump sum payment you’ve made.

Once you’ve figured out your baseline spending — what you need to pay for housing, transportation, health care and food — you can make a plan on getting it from fixed income sources. Then, determine the amount you can withdraw safely from other sources to spend on extras, like travel.

Work with a fee-only adviser

A financial adviser can help you to assess your needs and to figure how much you can safely spend during retirement.

There may be no need to work with them regularly. Consider consulting a fee-only adviser — you pay a set rate for their services but not commissions on products they sell you — as you plan for retirement. Then, once or twice a year after retiring may be enough to help make sure you’re still on track.