The reason we save money for retirement during our working years is so that we can spend it in the future when earned income shuts off.

In fact, one popular study on this topic concludes that the ideal outcome for most retirees is one where they spend their very last dollar on the last day of their life.

But actual spending behavior in retirement,

specifically the spending behavior of affluent retirees,

tells a different story.

Affluent retirees are defined as individuals

with non-housing assets of at least $200,000.

And according to a recent study by Greenwald and Associates,

only 14% of affluent retirees

are drawing down principle to fund their retirement expenses. In other words, 86% of people

with more than $200,000 in savings and investments are not withdrawing more than their

portfolio earns each year. Said another way,

six out of every seven affluent retirees dies with more money than when they entered

retirement. And surprisingly, this spending behavior doesn't seem to change when retirement

expenses increase unexpectedly either. Instead of dipping into principle,

retirees are twice as likely to reduce other spending to absorb these unforeseen larger expenses.

Based on research, the majority of people with at least a couple hundred thousand dollars of

retirement savings will underspend and leave more money behind than intended.

And while there's no shortage of withdrawal strategies to help retirees maximize their

income and safely spend down their savings while mitigating the chances of running out

of money, their emotions often prevent them from doing so.

They're used to seeing their balance grow in the accumulation phase of life and struggle to watch it go the other way.

...