About 25% of retirees fall into the camp of people who decrease spending during retirement. This behavior contradicts the Life Cycle Hypothesis, suggesting they should maintain consistent income.
Research shows retired individuals relying solely on their own savings tend to struggle with spending, unlike those with guaranteed income sources like annuities, Social Security, or pensions.
Many retirees experience a psychological barrier, where before retirement they may prioritize present expenses over future income. This can lead to an ongoing hesitant mindset toward spending.
Some retirees mistakenly believe they don't need to spend as much, assuming lower expenses due to not having work-related costs, contributing to a decline in their consumption patterns.
#retirement-spending #financial-behavior #life-cycle-hypothesis #psychology-of-spending #retirement-income
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