Allianz: Americans Struggle to Shift From Saving to Spending in Retirement

The shift from saving to spending in retirement is causing significant anxiety for many Americans, according to a new report from Allianz Life Insurance Co. of North America. The 2026 Annual Retirement Study reveals that a large portion of workers fear they will struggle to adjust to the reality of using their savings once their careers end.

Reluctance to Spend Runs High

Seventy-one percent of working respondents expressed hesitation about spending money in retirement, fearing they will want to preserve their account balance for as long as possible. This sentiment is shared by those already retired, with 39% of actual retirees feeling the same reluctance. Kelly LaVigne, the company’s vice president of consumer insights, noted that many people are only marginally ready for this transition. She said that while they might be fine if everything goes exactly right, they are likely unprepared for the inevitable disruptions that occur in real life.

The primary reasons for this financial caution are deeply rooted in practical concerns. Respondents cited the fear of outliving their savings as a top worry, particularly among Generation X workers where 60% hold this view. Baby Boomers, who are often closer to retirement, are more focused on future healthcare costs, with 61% expressing concern about long-term care needs. Other common fears include unforeseen emergencies, such as major home repairs, and the impact of inflation on their purchasing power, which was a specific worry for 53% of Boomers.

Estimates vs. Reality

There is a noticeable gap between what people expect to spend and what they actually end up spending. Among working adults, Millennials and Generation X members estimated they would spend less than 75% of their current income. However, older Boomers are more optimistic, with only 42% believing their spending would drop that low. The data shows that actual retirees tend to spend less than their working counterparts predicted; 45% of retirees reported spending less than 75% of their pre-retirement lifestyle, while 55% spent 75% or more.

Worry about spending too much too early is a common concern across age groups, with 42% of all respondents expressing this fear. In contrast, 35% are more concerned about regretting spending too little in the beginning of their retirement years. The study was conducted in January among 1,000 U.S. adults aged 25 and older with specific income thresholds for the data to remain representative of this demographic.

Practical preparation seems to be a missing piece for many potential retirees. LaVigne suggests a simple test: before leaving the workforce, individuals should try living for a few months on the income they expect to have in retirement. This exercise can help people see if they can maintain their desired lifestyle or if they need to adjust their expectations and explore strategies for guaranteed income to ensure stability.