Why can't I spend it?

This is not a failure of arithmetic, and it is not unusual. The standard economic model says people should draw down what they saved in retirement. Many do not, including wealthy ones, and the distance between the prediction and the behaviour has been studied for decades under the name the retirement consumption puzzle. What follows is what is actually known about why.

What this page is not

This is not financial advice, and I am not a financial adviser. I do not comment on products, drawdown rates or your numbers. If your caution is well founded and what you need is financial advice or guidance, a planner or adviser is the right person. What I work on is the part that is left when the plan is already sound and you still cannot act on it.

Worth stating the limit of that. This is a group who mostly retired with defined benefit pensions and a guaranteed income underneath them. Someone retiring today with a defined contribution pot faces a different problem, and probably a harder one.

You are still a saver

Forty years of being careful does not switch off because a date passed. The behaviour that made you successful now feels wrong to abandon, and reversing it feels less like a plan and more like becoming a different person.

There is a well-established asymmetry underneath it. Our financial position might have changed, but our cognitive money scripts have not, according to Klontz. Additionally, Kahneman and Tversky showed that losses register more powerfully than equivalent gains. A portfolio falling by ten thousand pounds is not the mirror image of it rising by ten thousand. It feels worse, so worry is amplified. Every withdrawal lands on the side that hurts more.

Nobody said what it was for

Most people describe this as a fear of running out. The research suggests that is not quite it.

Ameriks and colleagues, writing in the Journal of Finance, separated two motives that usually get bundled together: wanting to leave something behind, and what they termed public care aversion, the fear of running out of money and needing long-term care at the same time. It is the combination that frightens people, not poverty on its own. They found that fear to be very significant, and found the wish to leave something behind extending well beyond the wealthy.

That distinction is worth sitting with, because the two point in opposite directions. One is about someone else. The other is a specific scenario, which means it can be named, costed and planned for.

There was never a spending goal

Most people have a clear savings goal, but not one for spending. If the money became the objective rather than the means, using it can feel like losing rather than arriving.

It is also why things like giving during your lifetime gets postponed even when real life needs and the tax position point the same way and it makes sense to pass on wealth sooner rather than later. If it still sits undone for years, the reason may not be financial.

So which is it?

Two quite different people arrive at this page.

For some, the caution is rational. The plan is thinner than it looks, the income less certain than it seems, or tax rules might have shifted. This is a planning problem and a financial planner could solve it.

For others the plan is genuinely sound, the adviser has shown the numbers more than once, and nothing shifts. More modelling and more explanations will not move that, because it was never a money problem.

If you are in the first group, your adviser is the right person. I am useful to the second.