To Spend or Not To Spend?

20 years into retirement, most retirees have spent only 20% of their savings. We talked to retired participants to understand why–and what it means for the next generation of retirees.

BlackRock research in conjunction with the Employee Benefit Research Institute (EBRI) reported something unexpected: retirees hardly touched their retirement savings. On average across all wealth levels, most current retirees still had 80% of their pre-retirement savings remaining after almost two decades of retirement. However, looking beneath the averages, some retirees did spend down assets to critically low levels while on the other hand one third grew their assets over the course of retirement.

Percent of assets remaining after 17-to-18 years of retirement

In order to better understand why retirees are either spending down assets or not, BlackRock engaged Greenwald and Associates to conduct 19 in-depth interviews and survey 1,510 retirees in February 2018 to seek deeper insight into how retirees really think about spending and investing in retirement to better understand the motivations and biases driving the numbers.

We identified six key themes and drivers of retiree spending behavior that emerged from the findings and offer “lessons learned” to help advisors advance conversations at both the plan sponsor and plan participant levels.