Here’s how some US retirees with $1 million in savings can end up with $2 million or more — and why that’s a bad thing

Core Insights - The fear of outliving savings is a significant concern for retirees, with 64% of U.S. adults prioritizing this fear over death [1] - Some retirees, driven by this fear, tend to underspend, potentially accumulating more wealth than they had at retirement [2] Underspending Behavior - Retirees are generally advised to withdraw no more than 4% of their assets annually, but many withdraw significantly less; a 2024 Prudential Financial study found that married 65-year-olds with at least $100,000 in assets withdrew an average of 2.1%, which is about half the recommended rate [3] - The challenge of breaking long-standing frugal habits and the tendency for delayed gratification contribute to this underspending behavior [4] Spending Trends in Retirement - Longevity and inflation risks lead many retirees to adopt conservative spending habits; a 2024 Transamerica Center survey revealed that 50% of retirees reported decreased spending, while only 11% indicated an increase [5] - This frugality can result in retirees ending up with more money than they started with; for example, a retiree with $1 million who withdraws only 2% while their assets grow at 6% annually could see their wealth increase significantly [6] Wealth Accumulation Potential - At a 6% growth rate, a $1 million investment could potentially grow to over $2 million in approximately 18 years, which aligns closely with the average life expectancy and retirement age in America [7]