Financial advisors have an opportunity to ease clients’ fears and help them responsibly open their purse strings, allowing their clients to enjoy the fruits of their hard work.
Thrifty clients are often strong savers, and as they get close to retirement, many of them may have sizable nest eggs. But those admirable habits can become a challenge in retirement, as years of saving can make it difficult to start spending.
EBRI’s 2024 Spending in Retirement survey asked retirees about their consumption philosophy, and the results showed that 38% of respondents reported having a savings mindset.1
A common worry of pre-retirees and retirees is outliving their savings and investments, according to a 2023 report from the Transamerica Center for Retirement Studies. For savers, this mindset compounds their reluctance to spend.2
Financial advisors have an opportunity to ease clients’ fears and help them responsibly open their purse strings, allowing their clients to enjoy the fruits of their hard work. Three strategies that wealth managers can use include:
- Reframing retirement conversations to give clients more insights into their savings
- Creating a sense of purpose that gives clients confidence to spend
- Tapping into technology to show how savings and spending can make retirement more satisfying
Reframing Conversations to Help Clients Rethink Their Nest Eggs
Michael Kitces, who writes the financial planning blog Nerd’s Eye View, suggests reframing Monte Carlo analyses as a “probability of adjustment” rather than a “probability of success” to boost clients’ confidence in their financial plan. The term “probability of success” implies a binary outcome of failure or success; however, it doesn’t explore the magnitude of success or failure.
Replacing success with adjustment empowers clients to take control, as wealth managers can explain how slight spending adjustments during their retirement, when needed, can favorably affect the plan’s outcome.3
Feeling financially secure greatly increases a retiree’s comfort in spending money.
Portfolio returns fluctuate, but wealth managers can emphasize the amount of “guaranteed” income - such as Social Security, pensions, or annuities - to provide clients with the necessary security. Research by David Blanchett and Michael Finke shows that individuals who are reluctant spenders will spend more annually if a larger portion of their income comes from guaranteed sources.4
Creating Purpose and Giving Permission to Spend
After a lifetime of maximizing their finances, learning how to spend those savings is not as easy as flipping a switch.
A 2025 Kiplinger story suggests helping clients find a purpose for the money they spend. When they were working, saving money for their retirement goal was a purpose. Now that they are in retirement, spending can also have a purpose.5
The Kiplinger story noted that once clients are confident that they have enough money to cover their basic security, they can identify the purpose for the rest of the money. Purposes can include dream vacations, charitable giving (potentially using required minimum distributions from individual retirement accounts for qualified charitable deductions), or helping family members or friends.
Clients may also need “permission” to spend. An advisor featured in a 2022 Barron’s story encourages frugal retirees to earmark a certain amount of money as discretionary spending, whether on a monthly, quarterly, or annual basis.6
Another advisor told the magazine that if he has clients who are putting off activities, he tries to nudge them into action, such as asking them to send him photos of trips or fun activities that he includes in client meeting reports. Those photos serve as visual reminders and reinforce the idea that they can enjoy spending some money and stay on their plan.
Use Technology to Help More Accurately Pinpoint Savings
When dealing with high-net-worth and ultra-high-net-worth clients, wealth managers can utilize technology tools and data-driven analysis to help clients address concerns about spending in retirement.
In a 2025 Barron’s story, a financial advisor said she uses sophisticated planning software that allows her to adapt plans for events such as inflation or market swings, which boosts retirement resilience.
State-of-the-art technology can also help clients who are hesitant to spend because they struggle with managing cash flow in retirement, versus when they were working full-time.7 For example, SS&C Black Diamond® Wealth Solutions’ customized, interactive portal offers clients access to their financial plan at any time to reassure them that their goals are on track. Black Diamond also provides wealth managers with a holistic view of their clients’ entire financial picture. This combination can give clients peace of mind.
As a leading provider of capabilities for wealth and trust management companies, SS&C Black Diamond Wealth Solutions supports over 3,000 RIAs, IBDs, Banks, Trust Companies, and Family Offices, accounting for an aggregate AUM of more than $3.6T.
For more information on how Black Diamond can support the unique needs of your business, request your personal demo, call 1-800-727-0605, or email info@sscblackdiamond.com.
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