Sat Jan 18 2025, by Tyler Gardner

Why I Will Spend 7% of My Money Annually in Retirement

Hello, I’m Tyler, a former financial advisor and portfolio manager. Today, I want to share exactly why I will be spending 7% of my money annually in retirement.

Embracing Life in Retirement

Number one, according to a 2018 study by United Income, retirees die with 80% of their money intact. That’s not the legacy I aim for.

Spending Behavior in Retirement

Number two, a 2022 study by the Federal Reserve shows that after the age of 65, we spend 2.4% less per year in real terms. What does this mean? Simply, it’s wise to spend it while you’re alive and mobile and healthy.

The Drawdown Dilemma

Number three, the Seminole Trinity study found that retirees with a million dollars, drawing down 4% annually, often end up dying with an average of $6 million left in their portfolios. That’s a lot of missed moments with loved ones.

Changing the Retirement Spending Narrative

Finally, according to a 2023 report from Morningstar, retirees are currently spending just 2.8% of their nest egg each year. This frugality stems from the fear of running out of money in retirement.

Living Without Regrets

However, I’d rather run out of money than out of time. I refuse to spend 20 to 30 years of my retirement deferring the joy that I worked 40 years to attain. If any of this resonates with you, don’t forget to like and follow, and I’ll continue to help guide you toward financial empowerment.

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