Retirees Have the Savings. They Just Won’t Spend It.

The retirement industry has spent decades focused on a single problem: getting Americans to save enough. It has made real progress. Millions of workers contribute to 401(k)s, IRAs, and other retirement accounts throughout their careers, building balances that represent years of disciplined effort. But Prudential Financial’s 2026 Retirement Pulse survey reveals a challenge that sits on the other side of that success — and one that has received far less attention.

Most retirees don’t feel free to spend what they’ve saved.

Eighty-six percent of survey respondents said they don’t feel entirely free to spend their savings on things they enjoy. That figure cuts across wealth levels, account sizes, and retirement timelines. It describes a retirement experience defined not by financial deprivation, but by self-imposed restraint — a reluctance to use what has been accumulated, rooted in fear of what might happen if they do.

Prudential calls this the “license to spend” problem. And the survey findings point clearly to what grants that license: guaranteed lifetime income.

A Lifetime of Saving Creates a Spending Paradox

The psychology behind this finding is not complicated. Most Americans spend their working years in a single financial mode: accumulation. Save more. Spend less. Watch the balance grow. The habits, mindsets, and identities built around that mode do not automatically dissolve at retirement. For many retirees, the switch from saver to spender is not a natural transition — it is a psychological barrier that no account balance, on its own, can remove.

As Leib Litman, Ph.D., chief research officer and behavioral scientist at CloudResearch, which partnered with Prudential on the survey, put it: “What makes these findings so compelling is that permission to spend isn’t simply a financial challenge, it’s a psychological one. The challenge is helping people emotionally transition from saver to spender and shift from asking, ‘What if I run out?’ to asking, ‘What experiences might I miss if I never use what I’ve worked so hard to save?'”

The fear driving the reluctance is identifiable and consistent: running out of money. When the income floor is uncertain — when every dollar spent comes from a finite pile that shrinks with each withdrawal — spending feels like subtraction. The pile gets smaller. The runway gets shorter. And the anxiety that comes with watching that happen keeps retirees from using what they built.

Only 16% Have a Withdrawal Strategy

The survey finds that only 16% of respondents have a clear withdrawal strategy — a plan for how they will take money out of their savings, in what order, at what rate, and for how long. The absence of that strategy is not just a planning gap. It is the mechanism through which spending anxiety becomes a permanent condition.

Without a withdrawal strategy, every spending decision is made against an uncertain backdrop. How much can I afford to spend this month? What if markets drop? What if I live longer than I planned for? These questions have no stable answers when income is unstructured — and so retirees default to spending as little as possible, treating their savings as a resource to be conserved rather than a fund to be enjoyed.

This dynamic has real costs. Research by David Blanchett and Michael Finke at the Alliance for Lifetime Income’s Retirement Income Institute found that retirees with annuitized income — income that arrives as a guaranteed monthly payment — spend twice as much as retirees with non-annuitized savings of equivalent value. The money is the same. The spending behavior is radically different. The difference is structure — and the confidence that structure provides.

Guaranteed Income Grants the License

The survey’s most direct finding involves the connection between guaranteed income and spending confidence. Those who have or expect to use a pension, annuity, or guaranteed income in retirement are 43% more likely to feel they have permission to enjoy their savings. Pre-retirees with a clear retirement plan are 56% more likely to feel comfortable spending on enjoyment.

Fifty-eight percent of respondents say they would feel more comfortable spending their savings if they knew their basics were covered — including emergencies — and they had guaranteed income for life. That is not a niche response. That is the majority of people surveyed saying, clearly and directly, what would change their relationship with spending in retirement.

And when given a direct choice, two-thirds — 66% — say they would choose a guaranteed monthly check for life over a lump sum. The preference for guaranteed income over flexible accumulation is not a reflection of financial sophistication or product knowledge. It is an expression of what most people actually want from retirement: income that arrives reliably, that covers what needs to be covered, and that does not require constant vigilance to manage.

The Biggest Reason People Want Guaranteed Income

The survey asked respondents directly why they want guaranteed income. The top answer — cited by 54% — was permission to spend and enjoy. Not inflation protection. Not longevity coverage. Not bequest planning. The primary driver of demand for guaranteed income is the psychological relief it provides: the ability to spend without fear.

That finding reframes the conversation about annuities in a meaningful way. The case for guaranteed income is usually made in financial terms — longevity protection, sequence-of-returns risk, income floor. Those arguments are accurate and important. But for most people, they are not the most resonant. What resonates is simpler: I want to enjoy what I saved, and I need to know it’s okay to do that.

Guaranteed income answers that question directly. When essential expenses are covered by a predictable income stream that does not depend on portfolio performance, spending from other assets stops feeling like risk and starts feeling like permission. The pile does not feel finite in the same way. The runway feels longer. And the retirement that was supposed to be enjoyed can actually be.

Finding	Data Point
Don’t feel free to spend savings on things they enjoy	86%
Have a clear withdrawal strategy	16%
Would choose guaranteed monthly check over lump sum	66%
With guaranteed income are more likely to feel permission to spend	43% more likely
Would feel more comfortable spending if basics and guaranteed income covered	58%
Cite “permission to spend and enjoy” as top reason for wanting guaranteed income	54%

What Retirees Would Tell a Friend

The survey included a question that cuts through the data and captures something human: when asked what they would tell a friend who is also afraid to spend, nearly half of respondents advised a “you can’t take it with you” mindset. And retirees themselves are far more likely to describe retirement as “freedom” — 71% — compared to pre-retirees who anticipate it that way.

The experience of retirement, for those who have crossed into it, is meaningfully more positive than the anticipation of it. The fears that keep pre-retirees anxious about spending tend to diminish once retirement begins — particularly for those who have structured their income well. The anxiety, in other words, is not a permanent feature of retirement. It is a feature of retirement without a plan.

Phil Waldeck, head of U.S. Businesses at Prudential Financial, framed the industry challenge plainly: “It’s not enough to help people save for retirement if they’re afraid to spend it once they get there. The retirement industry has an opportunity to move beyond the focus on accumulating account balances and place a greater emphasis on income. Lifetime income can significantly strengthen retirement security, helping people to spend more confidently and enjoy it.”

The Shift the Industry Needs to Make

The Prudential survey is a useful corrective to the dominant framing of retirement planning. The savings gap is real. But the spending gap — the inability or unwillingness to use what has been saved — is also real, and it is costing retirees the retirement they worked for.

Guaranteed income does not just solve a financial problem. It solves a psychological one. It changes the retirement experience from one defined by vigilance and restraint to one defined by freedom and confidence. The math of retirement — how much to save, how long it will last, what rate is sustainable — becomes secondary when income that covers essential expenses is guaranteed to arrive regardless of what markets do.

For anyone approaching retirement who recognizes this pattern — who has saved diligently but feels uncertain about spending — the survey’s message is direct: the structure that grants the license to spend is available. Building it into a retirement plan is what changes the experience of retirement from something to be managed into something to be enjoyed.

Source: Prudential Financial. Read the original release.