New Prudential Research Reveals a Rising Retirement Challenge: the License to Spend
Key Highlights
- ➤86% of retirees lack freedom to spend savings on enjoyment
- ➤61% with $500K+ investable assets remain uncomfortable spending for enjoyment
- ➤66% prefer guaranteed monthly income over a lump sum
- ➤Only 16% of respondents have a retirement withdrawal strategy
- ➤58% would spend more comfortably with guaranteed lifetime income
Expert Statements
Phil Waldeck, Head of U.S. Businesses, Prudential Financial
“Saving for retirement is a critical foundational need that society has made progress against. However, it’s not enough to help people save for retirement if they’re afraid to spend it once they get there”
Phil Waldeck, Head of U.S. Businesses, Prudential Financial
“The retirement industry has an opportunity to move beyond the focus on accumulating account balances and place a greater emphasis on income. Lifetime income can significantly strengthen retirement security, helping people to spend more confidently and enjoy it.”
David Blanchett, Head of retirement research, Prudential Financial, and portfolio manager, PGIM
“What stands out in the research is that spending confidence isn’t simply a function of wealth”
David Blanchett, Head of retirement research, Prudential Financial, and portfolio manager, PGIM
“The industry needs to help grant people a license to spend. The solution lies in planning tools and advice that transform uncertainty into confidence, helping retirees support not only their needs but their dreams in retirement.”
Leib Litman, Ph.D., Chief research officer and behavioral scientist at CloudResearch
“What makes these findings so compelling is that permission to spend isn’t simply a financial challenge, it’s a psychological one. The research suggests that many savers are held back by a mindset rooted in uncertainty and fear”
Leib Litman, Ph.D., Chief research officer and behavioral scientist at CloudResearch
“The challenge is helping people emotionally transition from saver to spender and shift from asking, ‘What if I run out?’ to asking, ‘What experiences might I miss if I never use what I’ve worked so hard to save?’”
Barbara Pietrangelo, Financial planner with Prudential Wealth Advisors
“Retirement spending decisions are deeply personal. Spending money you worked so long to save can feel like a loss. For my clients, having a financial plan that we build together which clearly shows their priorities accounted for, in a timeframe they chose, really helps to ease anxiety around spending”
New Prudential Research Reveals a Rising Retirement Challenge: the License to Spend
Survey points to guaranteed lifetime income and a mindset shift as key solutions to overcome spending struggles
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