Should a Retired Couple Spend Their Savings Instead of Protecting Them?

A reader's question making the rounds among retirement planners comes from a couple in their late sixties and seventies. Both are in good health, they married later in life, and they have no children. Their view is that they have little interest in showy jewelry or expensive cars, so they wonder why they should not spend the money they have saved. Their headline claim is that they have a 99 percent chance of outliving their savings. The item does not show how they reached that figure, so it is best read as their own estimate rather than the result of a formal model.

The instinct to hold on to savings is understandable. Many retirees treat their nest egg as a safety net, and that caution often pays off. But the right answer depends on what the money is for. With no children and no specific bequest in mind, savings kept to the end mostly serve as insurance against a long life and future care costs. Spending some of it on travel, home repairs, time with friends or things that make daily life easier can give a return that a rarely touched balance never will.

The real risk is the mismatch between a fixed pot of money and an open-ended lifespan. Planners often call this longevity risk: one partner may live well past expectations, perhaps alone, while health costs rise. A couple who spend freely in the first years of retirement may have little left when mobility declines. A more disciplined approach is to spend by rule rather than by feel. That means setting a sustainable annual withdrawal, keeping a reserve for medical and long-term care, and reviewing the plan every year.

Several other factors shape the answer. Guaranteed income, such as a state pension or an annuity, lets a couple spend more from savings with less worry. Whether the home is paid off, and whether it could be sold or downsized later, also changes the picture. So does any surviving-spouse entitlement to a pension, which can matter a great deal if one partner dies first. Tax treatment and the order in which accounts are drawn down can affect how long the money lasts.

For this couple, the most useful next step is a projection built on their actual figures. A fee-only financial planner can test how long their savings last at different spending levels and different ages of death. The question worth answering is not whether they will eventually run out in the abstract. It is how much they can spend each year while keeping a margin for the years when they can no longer easily adjust.