Feeling guilty about spending savings in retirement

The dream retirement: Buy a vineyard
The dream retirement: Buy a vineyard

I'm retired, receive a decent pension and have adequate savings in several retirement accounts. Still, I feel insecure about retirement. Maybe it's because I was raised to always save for a rainy day, but I agonize a great deal over purchases and I feel guilty about spending money on anything fun. Is there any way to mitigate these feelings of guilt and uncertainty? --Bill, Florida

It's not uncommon for people who were diligent savers during their career to have a difficult time making the transition to spending more freely. After all, if you've been stifling the natural impulse toward immediate gratification for 30 or more years, it's probably a bit unrealistic to assume you can do an about-face and start living large overnight.

So you need to recognize that a fundamental change in attitude of this magnitude may take a little time and patience to achieve.

I wish I had a ready list of sure-fire techniques that were guaranteed to speed the process of turning you from a reluctant spender into a more willing (and happy) one. But I don't. I do, however, have three suggestions that might be able to help you use your nest egg for what it's meant to do: provide you with a measure of financial security so you can relax and enjoy your post-career life.

My recommendations:

1. Gauge how long your savings might last at different spending rates. This sort of assessment won't address the emotional or psychological issues that may be interfering with your ability to enjoy the fruits of a lifetime of saving. But it will give you an objective sense of just how much wiggle room you actually have for spending down your assets.

If nothing else, that knowledge may eliminate one possible excuse for your reluctance to spend -- a lingering fear that despite your resources you could still run out of money prematurely -- and in so doing might make you more receptive to the fact that you really can afford to indulge yourself now and then.

Related: Will you have enough to retire?

You can do this sort of evaluation by going to this retirement income calculator, which uses Monte Carlo simulations to make its projections. You plug in such information as the amount you have saved, how your nest egg is divvied up between stocks and bonds and how long you should plan for your savings to last. (This Longevity Illustrator tool can help on that score.) You can then experiment with different withdrawal rates to see how the chances of your nest egg running out change as your spending increases or decreases.

For example, if you withdraw an initial 4%, or $20,000, from a $500,000 nest egg split equally between stocks and bonds and boost subsequent yearly withdrawals by the inflation rate, you would have an 80% or so chance that your nest egg will last at least 30 years. Drop that initial withdrawal rate to 3.5%, or $17,500, and the probability of your savings sustaining you for 30 years jumps to roughly 90%.

By going through this exercise every year or so throughout retirement, you should be able to settle on and maintain a level of spending that's consistent with a safety margin large enough for you to be able to dip into your nest egg without the feeling that you are putting your retirement at risk.

2. Come up with specific things you might like to do. Remember, spending isn't the end here. It's a means to help you better enjoy this phase of your life. So instead of obsessing about whether you're being a tightwad, shift the focus to activities that you think could make your retirement more satisfying and rewarding.

You can do this by drawing up a simple bucket-list of things you've always wanted to do but weren't able to get around to when a career was soaking up the bulk of your time and energy. Perhaps there are countries you've always wanted to see, a new language you'd like to speak, a musical instrument you'd like to learn to play, a sport you've always wanted to play, a creative talent (painting, sculpting, acting, whatever) you'd like to nourish.

Related: I'm retired. Am I holding too much in stocks?

If you're short on ideas, you can rev up the Ready-2-Retire tool, which has icons representing two dozen or so different retirement activities ranging from travel to hobbies and creative interests to returning to school that you can sift through for inspiration.

Or, if you want to do some more comprehensive lifestyle planning to explore a broader array of options for your post-career life, you might consider attending a retirement lifestyle seminar, such as the Paths to Creative Retirement workshops or the Creative Retirement Exploration Weekends offered by the Osher Lifelong Learning Institute at the University of North Carolina-Asheville.

You don't have to start with something major; indeed, you may feel more comfortable easing into new activities. In the case of travel, for example, starting with some relatively inexpensive weekend trips to destinations near home and eventually working your way up to more ambitious travel may be a better way to go until you're more comfortable with spending.

But the idea is one way or another to get yourself into the mindset that retirement can (and should) be a time to experiment, to savor new experiences and have fun. If you try something that doesn't work out, no biggie. Cross it off your list and move on to something else.

3. Consider a "commitment device." A commitment device is a way to get yourself to do something that you want to do, but may not have the willpower to pull off on your own. The idea is that you force yourself to commit to an action or goal ahead of time and give yourself an incentive to follow through or make it very difficult for you to change your mind. Probably the best-known example of one is in Homer's epic poem The Odyssey, when Ulysses lashes himself to his ship's mast to avoid being lured onto the rocks by the Sirens' seductive song.

I've previously recommended this technique (among others) to encourage saving, but I see no reason why it can't work for spending as well. One way to do this is to go to Stickk.com, a site that helps people commit to and achieve goals. You can choose from a menu of goals the site offers or you can create a custom one, say, spending $5,000 on leisure activities over the next 12 months or taking a luxury cruise. As an incentive to follow through, you agree that if you don't meet your goal, you'll pay a penalty -- $100, $200, whatever -- to a person or organization you don't like (say, a contribution to Hillary's campaign if you're a Trump fan, or vice versa).

Or you could do a more informal version of this technique by informing all your friends and family of your spending plan on the theory that you'll be more likely to stick to it than suffer the embarrassment of backing out.

Related: Should I take my pension in monthly payments or a lump sum?

I'll throw out one more idea. If you still have trouble getting yourself to shell out money for your own enjoyment, maybe you can take some pleasure in supporting a cause you support or spending for the benefit of others. There's no shortage of people whose lives could be significantly improved by some financial assistance, whether it's friends down on their luck, family members who are struggling, grandchildren who can use some help funding their education or people you don't personally know who could use a helping hand.

If you're looking for charities to donate to, you'll find thousands rated on the basis of their financial health, transparency and effectiveness in areas ranging from helping the poor to protecting the environment to supporting cultural organizations at the Charity Navigator site. If you prefer to take a more active role and volunteer with a nonprofit, you can check Retired Brains' list of Retiree Volunteer Organizations.

One way or another, though, you need to find a way to become more comfortable with spending the savings you've diligently accumulated over the years. Otherwise, you may end up living a post-career life that's financially secure, but not very satisfying or fulfilling.