by Gary Foreman

Good or bad, we all have a relationship with money. Let’s see what we can do to make sure that relationship and our beliefs about money don’t hurt the quality of our retirement.

We wanted to explore the topic of money beliefs in retirement, so we contacted Dan Andrews. Mr. Andrews is a Certified Financial Planner™ who founded Well-Rounded Success. The firm provides financial planning services and works to understand the behavioral side of personal finances.

Q: Many people are forced to face their money disorders when they retire. What can a financial planner do to help them process the new information about themselves?

Mr. Andrews: A financial planner can help the retiree understand their money personality and what triggers lead the person to poor financial decisions. There are surveys available that help an individual gauge their psychology with money.

Q: Compulsive spenders often have habitual spending patterns. Do those patterns change as they reach retirement? And, if so, how do they change?

Mr. Andrews: Spending typically goes up in the first few years of retirement when the couple travels and spoils other family members. After that, I’ve seen individuals get concerned about preserving their nest egg. It’s interesting how the polar opposite of behaviors surface in people.

Q: For people who hate talking or thinking about money, retirement can force them to deal with the issue. Is there an easy way for them to approach the topic?

Mr. Andrews: Aligning money to support one’s values helps the individual understand how money can be used as a tool to live a great life as well as create the legacy that they intend. Money shifts from being a burden towards being an asset to help the person live their best life.

Q: Studies show that a common fear among retirees is running out of money. That can lead to underspending and miserly behavior. Is there a way to balance that fear and allow reasonable spending patterns?

Mr. Andrews: I find it important for the person to feel like they’re doing okay with money psychologically. Many retirees only see their accounts losing value due to not having an income. Some products out there can help, but it’s important to discuss the solution with trusted financial professionals who act as fiduciaries to ensure the person is getting ethical advice.

Expert Interviews:

• Retirees Fear Running Out of Money
• How Confident Can You Be in Your Retirement Savings?

Q: For a generation, people have been taught to take fewer risks in their retirement portfolio. Yet, with life expectancy averaging 20 years and some living for 30 or more years after retirement, some risk is necessary. What can a financial planner do for those who are overly risk-averse?

Mr. Andrews: This is best prepared by understanding a family’s goals with their money to ensure a plan is prepared to help the person in all possible scenarios, like living more than expected, dying sooner than expected, and the possibility of poor health.

Q: Is there any money disorder that you’ve frequently found among retirees and those about to retire?

Mr. Andrews: The mentality of being ultra-frugal surfaces with retirees who are terrified to see a shrinking savings account. This is sad to see since the person isn’t enjoying their money and is constantly in a state of fear.

• The Psychology of Happiness in Retirement
• Changing Financial Behaviors in Retirement
• Do Retirees Overemphasize Current Events In Retirement Planning?
• Are You Afraid You’ll Outlive Your Retirement Savings?
• Are Emotions Making Your Financial Decisions?
• How Retirees Can Live On a Tight Budget

Reviewed December 2021

About the Expert

Dan Andrews founded Well-Rounded Success in early 2016. He’s been working in the industry for over four years. Dan is an independent fee-only Certified Financial Planner™ who acts as a fiduciary for self-motivated millennials. His approach is to encourage clients to make responsible financial decisions, keep their costs low, and focus on what can controlled by understanding the behavioral side of personal finances.

About the Author

Gary Foreman is the former owner and editor of the After50Finances.com website and newsletter. He's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.