There’s a fascinating conversation happening right now about the trillions of dollars baby boomers will eventually pass on to their children. Analysts are tracking it. Financial advisors are planning for it. Younger generations are quietly anticipating it. And meanwhile, many of the people sitting on that wealth may be too afraid to spend a dime of it on themselves — not out of negligence, but because of deeply ingrained money philosophies and psychology that took a lifetime to build. (See WSJ article: The Great $110 Trillion Wealth Transfer Won’t Happen Any Time Soon)
And I am one of them.
The Fear That Doesn’t Go Away
Even as retirement draws closer, even with a trusted financial advisor who assures me we’re in good shape, there is a voice in the back of my mind that whispers: but what if you run out?
I call her my inner bag lady. Turns out, she has a name in psychology circles too — the “bag lady syndrome” — and she shows up for far more women than you’d think, regardless of their net worth.
For me, the roots go deep. Growing up, money was tight. If I wanted something — even something as simple as a pair of those coveted designer jeans every other girl seemed to have — I earned it myself. Babysitting. And yes, at fourteen, with a work permit, I was cleaning motel rooms. I learned early that security doesn’t just appear. You work for it. You save for it.
That mindset served me well — and carried right into our marriage. We didn’t have a lot in those early years. Like so many young couples just starting out, money was tight and the checking account was often running on fumes. But even then, we made a decision: fund retirement first. Before the extras, before the splurges, sometimes before it felt remotely comfortable — we saved. Year after year, we maxed out contributions, made careful choices, and trusted that it would matter someday.
And it did.
And yet here I am, on the doorstep of the years we saved for, still finding it difficult to spend.
I deliberately chose to work with a husband and wife financial advisory team — specifically because of her. She is patient, brilliant, and reassuring. And still, that little voice persists.
Here’s what even she can’t fully argue away: I was in banking during the 2000 technology crash. I watched 2008 unfold from the inside. Those aren’t abstract historical events to me. They are visceral, bone-deep memories. A strong market today doesn’t erase them.
The Other Side of the Spectrum
But not everyone carries that same fear — and that’s worth talking about too.
I have a friend who is happily remodeling her new house, and loving every minute of it. Her philosophy? We might as well spend it now. Another friend has made peace with a different truth: she doesn’t feel the need to leave a large inheritance. Her kids are grown and capable, and she worked hard for this money. She fully intends to enjoy it.
Honestly? I admire them both.
Because here’s what I’ve come to understand: the psychology of spending in retirement isn’t one conversation. It’s two — and most of us are living somewhere on the spectrum between I’m afraid to touch it and life is short, let’s enjoy it.
Neither extreme serves us particularly well. But understanding where you fall — and why — might be the most important financial work you do in this season of life.
If You’re Holding On Too Tight
The scarcity mindset that drove you to save was real and valid. It was the right response to real circumstances. But retirement asks something new of you now. It asks you to trust — the plan you built, the advisor you chose, the life you worked toward.
The goal was never just the number. It was the life.
You saved so you could say yes — to the trip, the experience, the round of golf, the dinner that feels a little indulgent. Somewhere along the way, saving became the habit and spending became the fear. It’s okay — more than okay — to gently begin reversing that.
Start small. Say yes to one thing this month you’d normally talk yourself out of. Notice how it feels. Build from there.
If You’re Spending Freely
There’s genuine wisdom in your approach. You understand something important — that money unspent is just a number on a screen, and that experiences, joy, and comfort have real value.
But even the most liberated spender benefits from intention. Spending purposefully — knowing what you’re spending toward and why — means your money goes toward the things and experiences that light you up most. That’s not a restriction. That’s a gift to yourself.
What About Leaving Something Behind?
The Great Wealth Transfer conversation is everywhere right now — and it looks different for every family. Roughly 81% of Americans over 55 plan to leave an inheritance, but experts are quick to point out that this transfer will unfold slowly, over decades, and unevenly across families.
The truth is, intentional spending and thoughtful legacy planning are not opposites. You can enjoy your retirement fully and be intentional about what you leave behind. The key word in both cases is the same: intentional. A good financial plan makes room for both — and a trusted advisor can help you find that balance in a way that reflects your values, not just your balance sheet.
What Everyone Needs, Regardless of Their Camp
Whether you’re gripping your savings tight or happily renovating, a few things matter for everyone:
A trusted advisor you genuinely connect with. Not just someone who manages numbers, but someone who understands your history, your fears, and your values. That relationship changes everything. (Choosing a Financial Advisor)
A plan that reflects your life, not just your finances. A good retirement plan accounts for who you are, what brings you joy, and what keeps you up at night — not just your asset allocation.
Self-awareness about your money story. The beliefs you carry about money — often formed in childhood — are quietly driving your decisions right now. Naming them is the first step to making sure they’re serving you, not limiting you.
The Bottom Line
“A penny saved is a penny earned — but a life unlived is a tragedy.” – Benjamin Franklin
We saved for this. All of it — the security, the freedom, the ability to choose. That is worth honoring.
My inner bag lady still shows up sometimes, usually when the market gets shaky. But I’m learning to hear her out, thank her for keeping me safe all these years, and then gently remind her: we’ve come a long way from those motel rooms.
It’s okay to live the life we worked so hard to build.
Frequently Asked Questions
Why is it so hard to spend money in retirement? Many retirees struggle to spend their savings because of deeply ingrained habits built over decades of saving. Fear of running out of money — sometimes called “bag lady syndrome” — is surprisingly common, even among financially secure individuals. Past experiences like market crashes or childhood financial hardship can make it especially difficult to shift from saving mode to spending mode.
How do I know if I’m spending too little in retirement? Signs you may be holding on too tight include consistently underspending your budget, feeling anxious about normal purchases, and delaying experiences or travel despite having adequate savings. A trusted financial advisor can help you understand what you can realistically afford — and give yourself permission to enjoy it.
Is it okay to spend your retirement savings on experiences rather than leaving an inheritance? Absolutely. Many financial experts encourage retirees to prioritize their own quality of life. There is no obligation to leave a large inheritance, and many adult children prefer their parents enjoy their retirement fully rather than sacrificing experiences to preserve wealth.
How do I find the right balance between saving and spending in retirement? The key is intentionality — knowing what you value most and directing your spending there. Working with a financial advisor who understands both your numbers and your values can help you build a spending plan that feels both secure and fulfilling.
What is the Great Wealth Transfer and does it affect my retirement planning? The Great Wealth Transfer refers to the estimated $84 trillion in assets baby boomers are expected to pass on to younger generations through 2045. However, experts caution it will unfold gradually and unevenly. Rather than planning around a legacy number, focus first on funding the retirement life you deserve — then work with your advisor to align your legacy goals with that plan.
Are you a saver who struggles to spend, or have you given yourself full permission to enjoy your retirement? I’d love to hear your story in the comments.
