From saving to spending: Building confidence in retirement

Retirement marks an exciting shift: from building your savings to putting them to work in support of the life you’ve been planning. Yet after decades of asking, Will I have enough?, many investors find themselves facing another equally important but less frequently considered question: Enough for what?

Answering that question matters. Left unanswered, even a retirement plan with a high likelihood of success can leave financially prepared investors wondering, That sounds good, but can I really afford to retire? This uncertainty often lies not in the numbers themselves, but in whether the spending assumptions truly reflect the lifestyle they want to enjoy. A detailed spending plan can help transform the numbers from an abstract projection to a future you can picture and look forward to.

Perhaps most importantly, it gives you the confidence to adapt over time. Spending in retirement isn’t fixed. It naturally evolves as needs, priorities, and circumstances change. With a clear personal spending baseline in place, those changes become easier to navigate. Instead of worrying that future uncertainties could derail your plan, you can make thoughtful adjustments, knowing you’ve already identified your nonnegotiables.

Bringing your spending into focus

Research suggests that investors with a formal retirement plan tend to feel more confident about their financial future. A thoughtful spending plan can increase that confidence by helping connect financial resources to the life you want to live. The easiest way to start is to step back and look at your spending one broad category at a time.

This isn’t an exercise in creating the perfect budget or finding expenses to eliminate. Instead, it’s an opportunity to better understand how your money supports your lifestyle today and how you want that lifestyle to evolve—or stay the same—in retirement.

As you review each category, think beyond the obvious monthly bills. Consider the purchases that happen only a few times each year, the expenses that quietly accumulate over time, and the things that bring genuine value to your life, even if they’re easy to overlook.

You’ll also notice that many expenses don’t fit neatly into “essential” or “discretionary.” Housing includes property taxes but might also include a kitchen renovation. Food includes groceries as well as carryout and brunches with friends. Travel may mean road trips to visit family, an annual beach vacation, or finally checking a bucket-list destination off your list. Some portions of these categories may be nonnegotiable to you, while others are more flexible.

The goal isn’t to judge your spending or compare it with someone else’s. It’s to develop a more complete picture of where your money goes, identify the expenses that matter most, and understand where you have flexibility if circumstances change.

Key Insights:
Retirement spending isn’t just about covering monthly bills. Many of the expenses that bring the greatest enjoyment—from travel and hobbies to shopping and everyday pleasures—happen less frequently or are easy to overlook. Recognizing them and planning for them intentionally helps ensure your retirement reflects what matters most to you.

Before the numbers, imagine your life

This isn’t your typical budgeting exercise. Before gathering spreadsheets, bills, or credit card statements, try stepping away from the numbers for a moment. The approach may feel unconventional, but for some people, it can open up new ways of thinking about what matters most.

•  Picture a typical week in retirement, plus the meaningful moments that may occur over a year.
•  Jot down or draw a sketch of the people, places, routines, and experiences you want retirement to include.
•  Circle the priorities you most want your spending to support.

Put it into practice: Use My Retirement Spending Plan Worksheet to carry those priorities into each spending category and build your personal spending baseline.

Key Insights:
Investors are often surprised by what this exercise reveals. Expenses that seemed minor on their own can represent a meaningful portion of annual spending when viewed together. But this awareness does more than improve accuracy. It provides a stronger foundation for decision-making and helps align your plan with the people, places, and experiences that matter most to you.

From awareness to confidence

For many investors, the biggest surprise isn’t how much they spend. It’s what they learn about why they spend it.

As expenses come into focus, priorities often become clearer. Some costs that once seemed purely discretionary turn out to be important contributors to health, relationships, purpose, or enjoyment. Others may matter less than expected. The result isn’t simply a better estimate. It’s a more personal definition of what your retirement lifestyle truly requires.

That perspective also creates flexibility. Rather than thinking of spending as fixed, you begin to see where you would naturally protect certain expenses and where you could comfortably adjust if needed. When your most important priorities are already accounted for, the rest of your spending becomes less about sacrifice and more about thoughtful choice.

What this can look like in practice

Consider the Clarks, a couple in their late 50s who spend about $120,000 a year, or $10,000 a month. A traditional needs-versus-wants framework might classify roughly $70,000 of that spending as essential and $50,000 as discretionary.

But when the Clarks consider the lifestyle they actually want to protect in retirement, the picture looks different. Some expenses are clear necessities, such as property taxes, utilities, insurance, and health care. The Clarks also decide that certain expenses commonly viewed as discretionary—including travel to see family, fitness activities, gifts, and meaningful experiences—are important enough to include in their personal spending baseline.

At the same time, they identify other expenses they value but could comfortably adjust if circumstances changed—including some that might traditionally be considered essential. For example, while transportation is generally viewed as a necessity, the Clarks determine that about $10,000 of their $14,000 in annual transportation spending is important to maintain, recognizing they could keep their cars longer or otherwise reduce costs if needed. Similarly, of the $24,000 they spend on travel and entertainment, they decide that about $18,000 is important enough to include in their personal spending baseline.

Through this exercise, the Clarks arrive at a personally essential spending baseline of $90,000. The remaining $30,000 is still part of the retirement lifestyle they plan to enjoy, but it represents spending they would have greater flexibility to reduce or postpone if needed.

The result is not a single spending number, but two useful planning targets: $120,000 for the lifestyle they expect to enjoy in a typical year and $90,000 for the expenses they would most want to maintain. Rather than relying on broad definitions of what is essential, the Clarks now have a clearer picture of what they want their retirement plan to support—and where they have flexibility. (See the illustration below.)

Key Insights:
The Clarks’ total projected retirement spending remains the same. What changes is how they define the portion they would most want to protect. By including travel to see family, fitness, gifts, and other meaningful experiences in their personal spending baseline, they gain a clearer picture of the lifestyle their retirement plan is designed to support­—and where they would have flexibility if circumstances change.

Connecting your plan to your life

Once you’ve identified the expenses that matter most, the next step is understanding how they fit within your broader retirement strategy. A personalized spending plan provides stronger inputs for formal financial planning. It allows for more thoughtful withdrawal planning, better alignment with different phases of retirement, and more realistic expectations around taxes, health care costs, gifting, and other long-term considerations.

For many investors, identifying those priorities is one of the most valuable parts of working with a financial professional. Through thoughtful conversations about your goals, lifestyle, and spending habits, they can help you uncover the expenses that matter most, distinguish between areas where you’d want to maintain spending and those where you’d be comfortable adjusting, and translate those priorities into a retirement strategy. Rather than starting with broad assumptions or rough estimates, you can begin with what matters most to you. From there, you can evaluate trade-offs, explore what’s possible, and build greater confidence that your financial plan is designed to support the retirement you actually want.

Key Insights:
Retirement planning is often focused on accumulation—how much to save and how to grow assets over time. But the purpose of that effort is to support the life you want to live. When you know exactly what your money is for, and which expenses you’d protect versus adjust, spending becomes a confident, intentional act instead of a source of worry.

Confidence to spend with purpose

When you know the lifestyle you’re solving for, retirement becomes less about wondering whether you’ve saved enough and more about knowing what you’ve saved enough for. Because no two retirements look exactly alike, no two spending plans should either. Whether your priorities include annual trips to see grandchildren, weekly golf games, theater tickets, charitable giving, a beautifully maintained garden, or an omelet and your favorite show, your spending plan should reflect what matters most to you.

Working with a financial professional can help you bring those priorities into focus and understand how they fit within your broader retirement plan—so you can spend less time wondering whether you can afford retirement, and more time enjoying it.