Your Plan Says Spend — Your Gut Says No (5 Questions to Ask Instead)

Full analysis

Taylor Schulte breaks down a behavioral-finance piece by Daniel Crosby arguing that retirement requires three simultaneous transitions — financial, psychological, and behavioral — and that most planning only addresses the first one. The core problem: decades of conditioning to save makes spending feel wrong even when the money is clearly there. Five specific questions are offered to close what Crosby calls the "permission gap."

What was covered

• Three retirement transitions at once. The economic shift (savings become income) is what traditional planning handles. The psychological shift (identity, purpose, sense of control) gets less attention. The behavioral shift — unlearning a lifetime of saving — gets almost none.
• EBRI data on actual retiree behavior. The Employee Benefit Research Institute found that only about 44% of retirees planned to spend all or a meaningful portion of their assets. About 33% plan to spend only a small portion; 22% plan to spend none or continue growing it. More than half, in other words, plan to leave most of it untouched.
• Why retirees hold back. When EBRI asked why, fear of running out of money was cited by roughly 27% — but the top answer, at about 38%, was saving for some unnamed future expense. Crosby's point: a risk you can't name or size is much harder to plan around than one you can.
• The asset-preservation finding. Among middle and high asset retired households, roughly 48% and 42% respectively still held at least 80% of their starting assets more than 20 years into retirement. Schulte also references a Federal Reserve study (discussed in a prior episode) finding retirees die on average with nearly twice the savings they had at retirement.
• David Blanchett and Michael Fink research (episode 274). Retirees spend about 80% of income from guaranteed sources like Social Security and pensions, but less than half of what they could from investment portfolios. Same money, very different emotional permission.
• Four psychological roots of the permission gap. Crosby identifies identity (spending breaks a rule that defines you), competence (a falling balance feels like failure), optionality (spending closes off future choices), and mortality (drawing down a finite pool is a reminder that time is finite too).
• Five diagnostic questions Crosby proposes to replace "Can I afford it?" — described in detail below.

Notable claims & predictions

• Daniel Crosby, via Taylor Schulte: "'I save money' becomes 'I am a saver.' You can revise a behavior or change a habit, but changing how you actually see yourself is much harder." The implication: more math — another projection, another Roth conversion analysis — won't fix a behavior rooted in identity.
• Taylor Schulte: "A 95% probability of success does nothing to close the permission gap." He argues that for well-funded retirees, the bottleneck is psychological permission, not the numbers.
• Crosby (paraphrased by Schulte): The five jobs that close the permission gap — interpreting numbers into a real decision, granting explicit permission, coaching an identity shift, redesigning defaults, and connecting specific expenses to specific values — none of them involve picking better investments or predicting interest rates.
• Schulte on the mass-affluent: Crosby identifies people who became millionaires through steady saving plus a paid-off house as the group where underspending shows up most commonly — not just the ultra-wealthy.
• Schulte on self-help limits: "Very few people talk themselves out of the permission gap in isolation." A second set of eyes — adviser, CPA, spouse, or financially literate friend — is usually required.

Fact check

• EBRI figures (44% / 33% / 22% split; 27% vs. 38% on reasons for holding back). These are presented as findings from a specific EBRI survey. The figures are plausible and consistent with published EBRI research on retiree asset decumulation, but the exact survey wave and year are not identified in the episode. Treat these as approximate, not precise, until you can check the EBRI source linked at youstaywealthy.com/300.
• "Retirees die with nearly twice the savings they had at retirement" (Federal Reserve study). Schulte cites this from a prior episode without the specific study name or date. This directional finding is consistent with academic work on retiree asset trajectories, but "nearly twice" is a strong claim, and the original study's methodology and sample matter. It is unverified as stated here.
• Blanchett/Fink finding: retirees spend 80% of guaranteed income vs. less than half of portfolio withdrawals. Schulte credits this to a study covered in episode 274. The finding is consistent with published research on income mental accounting; the exact figures are unverified here but the directional claim is well-supported in the behavioral finance literature.
• "48% and 42% still had 80% of starting assets after 20+ years." These specific figures are not attributed to a named, dateable study in the episode. The claim is plausible but unverified without the source.

No claims here are clearly false. The main issue is that several statistics are cited without enough source detail for independent verification. The directional arguments — that retirees underspend relative to plan, and that behavioral rather than financial factors explain much of it — are well-supported in the academic literature.

Why this matters for you

• If your plan says you can spend and you still aren't, this episode names the actual problem. The permission gap is not solved by re-running the numbers. The five questions — especially "What are you protecting this money from? Be specific" and "What does enough look like now?" — are worth writing out before your next planning conversation.
• The guaranteed-income spending gap is actionable. If you're spending freely from Social Security or a pension but treating portfolio withdrawals as untouchable, that asymmetry may be costing you experiences and quality of life your plan already funds. Worth flagging with your adviser.
• Unnamed fears are harder to plan around than named ones. The EBRI finding that the most common reason for not spending is "saving for an unnamed future cost" suggests a concrete step: work with a planner or on your own to price out the actual risks you're worried about — long-term care, medical expenses — rather than leaving them as a formless dread.
• The identity shift takes deliberate work. If you built your sense of self around disciplined saving, retirement doesn't automatically rewire that. Schulte's point that this is a skill requiring practice — not a character flaw — may be the most practically useful reframe in the episode.