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By Noor Shikari
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Society has consistently drilled one lesson across generations. Contribute to the 401(k), grab your employer match, invest consistently, and watch the account grow.
That’s good advice, every word. It also stops at the exact moment the hard part begins. A paycheck arrives on schedule. A portfolio does not.
Accumulating wealth and producing sustainable income are separate skills, and only one of them gets taught.
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The far harder, and more urgent lesson is learning how to actually live off those savings without running out of money.
We have made accumulating money the measure of retirement success, while leaving millions unprepared for the far more consequential challenge of making that money last.
A retirement account does not tell you what you can afford each month or whether your resources will survive with years of changing expectations.
So here is the question nobody asks at the retirement party: what kind of life will this money actually support?
Three assumptions make that transition particularly dangerous.
The first is that a substantial savings balance guarantees financial security. The second is that expenses will naturally fall once employment ends. The third is that retirement automatically brings a lower tax bracket.
Reality can be considerably more complicated. Healthcare, home maintenance, insurance, travel, and financial support for adult children or aging parents can keep household expenses high.
The Employee Benefit Research Institute’s 2024 Spending in Retirement Survey found that 31 percent of retirees surveyed considered their spending higher than they could afford.
Another 36 percent reported unexpected spending needs. These figures should challenge anyone who believes reaching a particular savings target settles the question of retirement readiness.
The Real Test
The real test begins when the paychecks stop. A person may have spent 40 years learning how to save, yet have little understanding of how to pay themselves for the next three decades.
Which account should fund the monthly expenses? How much can be withdrawn safely? What happens if markets fall during the first years of retirement?
These decisions influence how long savings last, and poor withdrawal timing can make market losses especially damaging.
There is also a psychological obstacle that financial projections cannot fully capture. Watching an account balance grow brings reassurance. Watching it decline, even through carefully planned withdrawals, can provoke genuine anxiety.
Some retirees become so protective of their savings that they deny themselves experiences they can afford. Others spend too freely without accounting for longevity or future obligations.
A sustainable plan must give people permission to enjoy their money while protecting their ability to keep doing so.
The Financial Pressures
Retirement also carries financial pressures that become more formidable with time. According to the National Center for Health Statistics, a 65-year-old in the United States could expect another 19.7 years of life in 2024, rising to 20.8 years for women.
Fidelity’s 2026 Retiree Health Care Cost Estimate puts average healthcare and medical expenses for someone retiring at 65 at $185,500 over retirement, excluding potential long-term care costs.
Inflation compounds the challenge, steadily reducing what a fixed amount of income can purchase.
Taxes add another layer. Traditional 401(k) and IRA withdrawals are generally taxable, and required minimum distributions typically begin at age 73 under current federal rules.
Additional withdrawals can also affect the taxation of Social Security benefits. Tax-deferred growth is valuable, but deferring a tax bill does not eliminate the tax bill.
A combination of traditional accounts, Roth accounts, and taxable investments can offer greater flexibility, depending on individual circumstances and eligibility.
A retirement system that prepares people to accumulate wealth but leaves them unable to manage it risks turning financial independence into prolonged financial anxiety.
Enjoying Freedom
In an ideal scenario, retirees can have the confidence to travel, support their families, pursue interests, and enjoy the freedom their working years were meant to secure.
In a far more troubling scenario, they may ration essential spending, postpone healthcare decisions, or return to employment simply to cover their bills. The difference often comes down to preparation and access to sound financial education.
Retirement itself is not always voluntary. EBRI’s 2024 survey found that 58 percent of surveyed retirees had left work earlier than expected.
Among them, 38 percent cited health problems or disability, while 23 percent pointed to company changes such as downsizing or reorganization.
A person may intend to work another five years and suddenly lose that option. A robust financial plan must account for the possibility that life will dictate the retirement date.
So what should change? Retirement planning needs to become an exercise in income design.
People should calculate essential and discretionary expenses, identify every income source, understand the tax treatment of their accounts, and stress-test their finances against market downturns, inflation, healthcare costs and longer life expectancy.
They should practice living on a projected retirement budget before leaving employment. They should also revisit their plans whenever circumstances change. A retirement strategy must remain adaptable throughout the years it is intended to fund.
The Bigger Picture
The wider financial picture makes this especially urgent. The Federal Reserve’s 2026 report on the economic well-being of U.S. households found that the proportion of non-retired adults who considered their retirement savings plan on track remained below its 2021 level.
Financial preparedness deserves attention well before someone approaches retirement age.
I believe financial institutions, employers, and policymakers have a responsibility to change what retirement education actually teaches.
Stop measuring the success of retirement programs primarily through account balances. Make income planning, withdrawal strategies, tax diversification, and longevity risk essential parts of financial education.
Employers should introduce these conversations years before employees leave the workforce, while policymakers should make practical retirement guidance accessible to households across income levels.
People deserve to know what their money can do for them before they reach the point of having to depend on it.
After decades of working, saving, and making sacrifices, retirement should offer the freedom to make decisions about one’s life without every expense becoming a source of fear.
We have taught people how to build their financial futures. Now we must teach them how to live in them.
Noor Shikari is a financial-education advocate and retirement-strategy mentor. All opinions are the author’s own.
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