Three-fourths of retirees say they expect to spend down at least some of their financial assets during retirement, including 14 percent who expect to spend them entirely, according to research by the Employee Benefit Research Institute.
An additional 29 percent of retirees age 62-75 who were polled said they expect to spend down a “significant” portion of assets and another 34 percent said they expect to spend down a “small” portion, while 9 percent expected to break even and 14 percent said they expect their assets to grow.
Of the reasons for not spending down assets, desire to save for potential unforeseen costs was the most commonly cited reason, above other options such as desire to conserve money to pass along to heirs.
Maintaining a desired standing of living, discretionary spending and health-related costs were the top three reasons for willingness to spend in retirement, while purchase of a new home, funding education for children or grandchildren, and supporting other family members were the three least-cited reasons.
“The findings suggest that spending in retirement involves both necessity and behavioral preferences,” EBRI said.