Rustic signs reading “Scenic Route” and “Slow Down” stand at a fork in a country road, with a picnic basket, map, and duffel bag in the foreground.

For some retirees, the biggest risk is not running out of money. It is running out of time to use it well.

by Austin Boyce, Advisor, CFP®

Retirement is not a destination. It is the final leg of the road trip we call life. And like any long journey, it comes with its own challenges and opportunities.

The most obvious concern is running out of fuel. In retirement, that fuel is your savings and investments. But there is another, less-discussed risk: arriving at the end of the journey with far more money than you ever needed.

Running out of money in retirement remains the top financial fear among Americans over 55. According to the Employee Benefit Research Institute, roughly 26% of Americans ages 55-64 and 36% of those over 65 have less than $50,000 saved. Many younger Americans are falling behind as well. Given those realities, headlines about America's retirement savings gap make sense.

For many SoundView clients, however, the picture looks different and may present a different challenge. Their greatest financial risk may not be running out of money. It may be running out of time.

Learning to Spend

A retirement road-trip scene with travel items and financial planning cues, representing money as a tool for living well. — A successful retirement plan should make room for both security and meaningful experiences.

Spending in retirement can be surprisingly difficult. After decades of saving and delaying gratification, shifting into a spending mindset does not come naturally. Yet learning to spend confidently is an essential part of a successful retirement.

Money is a tool. It provides the freedom to live life on your terms, spending your time how you want, with the people you care about most. While running out of money can force difficult lifestyle adjustments, underspending carries its own consequences. Retirees who preserve too much may later regret missed opportunities: more travel, greater generosity with family or charities, a vacation home, or experiences they continually postponed.

Finding the right spending rate is a balancing act. Spend too much, and you risk long-term security. Spend too little, and you sacrifice meaningful experiences that can never be recovered.

Rules of Thumb Have Limits

Consider the commonly cited 4% withdrawal rule: withdraw 4% of your portfolio in year one, then adjust for inflation annually. On a $1,000,000 portfolio, that is $40,000 in year one and $40,800 the next if inflation runs 2%. Historical analysis shows that in many scenarios, retirees ended up with more wealth after 30 years of withdrawals than they started with. Finishing retirement with substantially more than necessary may suggest opportunities that were never fully enjoyed.

Your Individualized Strategy

At SoundView, we take a personalized approach. Every client has different goals, spending needs, family circumstances, and legacy objectives. Rather than relying on generic rules, we help you build a sustainable spending strategy that balances financial security with living well. Think of your advisor as the adaptive cruise control for your financial road trip, helping you recognize when to accelerate, when caution is warranted, and how to enjoy the journey along the way.

For every client, that answer is deeply personal. And that is exactly where we start.

Sources: Yahoo Finance; Business Insider.