Jon Sabes, author of Healthy Wealthy Longevity and CEO of Longevity Financial Partners.
At first glance, many retirees look financially secure. Household net worth is near record highs. Defined contribution balances, taxable portfolios, and home equity are larger than those of any prior generation entering retirement.
Yet how retirees feel and act tells a different story.
Many underspend. They delay travel, postpone meaningful experiences, and hesitate to enjoy the lives they worked decades to build. They live cautiously, even when their financial plans say they don’t have to, and often die with far more money than they ever used.
This isn’t because retirees distrust markets or their advisors.
It’s because they don’t trust time.
The Real Fear: Outliving the Plan
Ask retirees why they hesitate to spend, and you’ll hear familiar concerns: health care costs, inflation and market volatility. But beneath those surface worries sits a more profound anxiety: No one knows how long retirement will last.
A 65-year-old couple today has a meaningful chance that one spouse will live into their 90s. We are firmly in the era of longevity, and while markets fluctuate, lifespan continues to move in one direction.
That creates an asymmetric risk. If retirees underspend, the cost is deprivation. If they overspend, the price is desperation. Rational people respond to asymmetric risk by choosing caution. Retirees, by definition, are rational. They saved for decades precisely because the future was uncertain.
Now that the future has arrived, underspending isn’t a mistake. It’s self-preservation.
Why Traditional Planning Conversations Fall Short
Financial advisors often frame retirement income using technical constructs such as safe withdrawal rates, Monte Carlo probabilities, and sequence of returns risk. These tools are analytically sound, but emotionally incomplete.
A plan with a “90% success rate” feels reassuring in a spreadsheet. In real life, it still leaves room for a failure scenario retirees cannot accept: living long and running out of money. That imagined future overwhelms the math.
Worse, many retirement conversations implicitly frame spending as depletion. Charts slope downward. Portfolio values shrink. Even when advisors explain the logic clearly, the visuals reinforce scarcity. Retirees have lived through recessions, crises, and surprises. They know things rarely go exactly as planned.
If retirement looks like a slow march toward zero, why would anyone feel comfortable spending?
The Problem With Lifetime Income Products
Lifetime income solutions are meant to reduce anxiety, yet many retirees resist them. This isn’t ignorance, it’s a control problem.
Annuities ask retirees to give up liquidity and control in exchange for certainty. Emotionally, that trade-off feels irreversible and opaque, which triggers loss aversion. Retirees want certainty, but they don’t want to surrender control over a lifetime of savings to a complex, illiquid product.
As a result, many annuities are purchased not because retirees embrace them, but because they trust their advisor. That’s not a financial decision, it’s an emotional one.
The default response remains the same: Keep assets liquid, even if that increases long-term risk.
Underspending Is a Planning Failure, Not a Client Flaw
When retirees underspend, it’s often labeled as conservatism or personality. That explanation misses the mark.
Underspending is feedback. It tells us the plan hasn’t delivered psychological safety. Clients may trust their advisor. They may even trust the math. However, they don’t trust the lived experience of the plan in a world where longevity continues to increase, and surprises are inevitable.
A successful retirement plan doesn’t just exist on paper. It permits retirees to live.
How Advisors Can Reframe the Conversation
Fixing underspending starts with reframing the goal. Retirement income planning isn’t about maximizing withdrawals; it’s about converting uncertainty into confidence.
That requires three shifts.
First, lead with longevity, not markets. When advisors acknowledge upfront that lifespan uncertainty, not market volatility, is the dominant risk, clients feel understood.
Second, separate spending from survival. When retirees clearly see which resources protect essential needs and which support living, discretionary spending becomes emotionally safer.
Third, emphasize risk-sharing, not product mechanics. Retirees don’t need lectures on internal rates of return. They need to understand how pooling longevity risk protects against extreme outcomes and enables them to spend without gambling on their own lifespan.
When framed correctly, income solutions stop feeling like surrender and start feeling like freedom.
From Preservation Mode to Permission to Spend
Above all, retirees want to live well without fear of financial insecurity.
Advisors who reframe retirement income around longevity, protection, and psychological safety unlock something powerful: clients who feel permitted to enjoy the money they worked a lifetime to earn.
Underspending isn’t a market problem. It’s a planning problem.
And it’s one advisors are uniquely positioned to fix.
Jon Sabes is the author of Healthy Wealthy Longevity and the CEO of Longevity Financial Planners.
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