How to Begin Drawing From Your Retirement Savings

After years of saving, starting to spend retirement money can feel unsettling

After a 28-year career as a high school teacher in New Jersey, Jennifer Ansbach, 55, found herself in the middle of the move into retirement and had plenty of questions. With both a pension and a 403(b) account, should she hold off on taking money from the 403(b)? Should she and her husband use some of their retirement savings for home updates so they can age in place? Could she justify a European trip with her father?

“There [was] that worry that if I use the money for that — if I start drawing down on my accounts — then I might live too long, and then what will happen then?” she says.

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This hesitation is widespread. Among people ages 50 to 75 who are within five years of retirement, 58 percent worry about outliving the money in their defined contribution plan, according to a MetLife survey. In addition, 42 percent of Americans say they fear regretting spending too much early in retirement, according to Allianz Life’s annual retirement study.

“It is difficult to start spending down your money when your body and your brain tells you, ‘Oh, you’ve got to keep saving. Gotta keep saving.’ So it is an adjustment period,” says Regina McCann Hess, founder and president of Forge Wealth Management in Malvern, Pennsylvania.

Here’s how to begin tapping your nest egg.

Expect an adjustment period

Before fear of running out of money in retirement takes hold, pause and recognize that this is a major life transition, on the same level as getting married, divorcing or having children, says psychologist Matt Lundquist.

Lundquist, the founder and clinical director of Tribeca Therapy in New York City, counsels individuals and families on financial concerns. He says it is normal to feel anxious during big changes: “I think that’s very real and probably is the headline that underlies the significance of that change.”

To get through the transition, picture what retirement will actually look like for you, says Adam Spiegelman, founder of Spiegelman Wealth Management in Alamo, California. “You can only play so many rounds of golf every year,” he says. How you intend to spend your time will shape what your retirement lifestyle will cost — and how much savings you will need to support it.