Why You’ll Never Actually Spend Your Retirement Savings

Your entire life, every calculator, every advisor, every scary headline has warned you about one retirement risk: running out of money before you run out of life.

Try this on. Researchers actually tracked real American households for 30 years, and 1 out of every 3 retirees in their mid-80s got there without ever touching their nest egg. Not a portion of it, any of it. I mean, which means that all the disciplined savers like you, the real danger runs in The better you are with money, the more likely it gets you.

So here's the deal.

I've spent 30+ years as a CPA, a money mentor, working with people starting out and people in high net worth, walking this exact transition myself right now as we speak. So this one's personal. And today we're gonna talk about why your own discipline quietly becomes a cage, the identity shift that nobody in your retirement industry is really talking about, and the exact system to break out of it without risking your security. And by the end, you'll know how to enjoy what you built with total confidence and peace. This is Building Your Money Machine, where we help you master your money, eliminate financial stress so you can live a life of choice.

And I'm your host, Mel Abraham. Let's do this.

So let's start with what 4 decades of discipline does to your brain, because that's where the whole thing begins.

Once you see the wiring, You'll never look at your own hesitation the same way again.

And let's go back to the 1 in 3 number from the open because it gets more uncomfortable the closer you look at it as we go. Because here's the thing, before you think that this is a rich person problem, it isn't.

It showed up in every wealth group they studied.

And it's a study that was done by the Employee Benefit Research Institute as of 2026. And they tracked real American households for 30 years, 1992 to 2022, real behavior, not projections, to really understand what were they doing. And middle asset households, high asset households, same pattern. The researcher who ran the study said it flat out. When people see that many people in their 80s are still sitting on 100% of their nest egg, you're looking at people who are being way too conservative with their spending. Think about what that means.

A third of retirees saved their whole lives for a life they never let themselves live.

The trips that were never taken, the help never given, the memories they never got made because the money that was supposed to fund them sat in an account untouched, guarded like a museum piece. So you can't take the portfolio statement on a cruise. Well, you can, but it's a lousy travel companion if you do that. So why is this happening? Here's what my thinking and what the data shows, because you spent 30, maybe 40 years training for the wrong event. Because I'm one of the ones that tells you, put money away, put money away, put money away. But I also tell you about joy. We're gonna talk about that in this episode, because you did all of that during your earning years. You watched every dollar, you paid down the debt, you lived below your means, you put the money away month after month, and every time the balance went up, you got a little hit of satisfaction, that dopamine hit. And you did that thousands of times. That is conditioning. The same way an athlete drills a movement until it's automatic.

Except the movement you drilled was don't spend. Then one day you retire and everyone expects you to just flip the switch and spend it now. Go enjoy it.

But your brain, the one you spent 4 decades training, looks at that first withdrawal and starts to scream.

It literally does.

Because for the first time in your adult life, money is actually flowing out with nothing flowing in, and every withdrawal feels like a crack in the wall that you built to keep yourself safe. The fear underneath it is about the spending itself. The fear is the question sitting behind it. That's the key.

Is this going to be enough? Can I keep going?

What happens if the market drops or if I get sick? What happens if I live to 100? See, nobody flips that switch through willpower. The wiring is too deep. You need a different approach, and that's what this episode gives you. So that's the trap. Decades of discipline that quietly turned into a cage, and you didn't realize it. So now let me show you what it looks like in real life, because I literally had two clients living this exact story, and their numbers will stun you. Jared and Mary. And I've changed their names, the numbers are real. When they came into me, they had a $3.5 million portfolio. On top of that, they, the house was paid off. It wasn't even counted in the $3.5 million. They had completely no debt. And between the two of them, Social Security was gonna pay about $37,500 a year. So now let's do what I do because I'm a numbers guy and let's run the math that you'd run on a napkin. Take it plain vanilla.

Let's assume a 4% withdrawal rate on $3.5 million.

That's $140,000 a year before tax. Add Social Security to it and then knock some taxes off the whole thing. And conservatively, you're looking at roughly $125,000 a year. In net spendable cash flow every year, sustainable. And you know what they were living on?

About $5,000 a month, $60,000 a year.

That's a $65,000 gap between what their machine could pay them and what they allowed themselves to live on year after year after year. And here's how that gap showed up in their actual lives. They were still clipping coupons, like $3.5 million and they're circling 40 cents off on paper towels like it's a treasure map.

They took public transportation instead of using Uber.

And my favorite, they were still booking red-eye flights. Yeah, the ones that leave at like 10 o'clock or midnight and trash you for 2 days to save a couple of hundred dollars. See, money wasn't their problem.

They'd won.

By every measure in the financial industry, Jared and Mary were done. But nobody had ever told them what winning was like and what it was for. Because those coupon clipping, red-eye booked reflexes, those are the things that were the exact habits that built the $3.5 million in the first place. Getting out of debt, watching every bill, questioning every expense. Those habits deserve respect and they work. Because they work, you see it. The problem is the habits didn't retire.

When they did.

Behaviors that made them wealthy were now stealing the one resource they couldn't rebuild, time. Healthy, energetic, go see the world time.

And they couldn't see it because from the inside, the habit, every one of those choices felt responsible. It felt like who they were. And when I dug underneath it with them, it wasn't about the coupons.

It was about that question again.

What if it's not enough? If the market drops? If a health scare hits? If the wall they built has a hole in it? So the safest move was always feeling like the same move. Just don't touch it. Sound like anyone you know? Maybe someone you see in the mirror? I know it was me. All right.

Now hang on to it, 'cause Jared and Mary, their story doesn't end here. But before we get to it, I'm gonna show you exactly how they broke out of this and where they are today because the blueprint works for you.

In order to do this though, you need two pieces to make this possible.

And here's where I want you to start looking at this.

You can't fix a fear you haven't measured.

Jared and Mary, they felt broke adjacent with $3.5 million because they had never put a real number on what their life costs and what their machine could sustainably pay them. The two numbers, the gap between the feelings and the facts is where their fear lived.

All right.

So one of the first things I want to do is I want you to figure out what your number is, and I'm gonna give you a tool totally free to let you know, cuz that's the amount the machine needs to generate for you to live a life by choice. I call it your freedom number. And you can go to melabraham.com/number. We'll hook it up here and go through the calculations.

At least get a ballpark, a benchmark, so you know what is not enough and what could be enough instead of staying up at 3:00 AM and letting your mind wander.

All right, now let's run the math that we ran for Jared and Mary to get their attention because the math started, but it didn't fix it alone. Math was never their problem. They got it dialed in.

See, what they needed and what you need is a full-on identity shift.

And that shift is the one thing that nobody in the retirement industry is talking about. So the real shift is that they were trying to shift from builder to spender. That's not the shift we need to make. The shift we need to make is from builder to steward. Here's the model that you've been handed, because I get it. Our retirement model in the States and many places around the world is broken. They say save, save, save, save, save. Put it in 401s and IRAs and SEPs and different things. And then when you retire, spend, spend, spend, spend, spend, and then hope and pray that that magic date, that moment when you leave this earth, you still have $1 to your name and you didn't have more life than you had money. It's a spend and pray mentality. But that's what they've ingrained in us with the retirement system that they've given us. Unless you start to build something called a money machine that allows you to not spend it down, but to allow the cash flow from it to run it. But that's the insane framing that they gave us. It's the traditional model. It's been accepted, but it turns your entire retirement into a countdown clock. With two hands on it, your life and your money. And you spend 30 years white-knuckling, watching to see which one runs out first.

No wonder a third of retirees never touch the pot.

See, the model itself was built on fear.

So it produces fearful people.

And it misses the deeper thing that's happening when you stop earning, which is retirement doesn't change your cash flow.

It comes for your identity.

See, during the accumulation years, you're the builder, the wealth creator, and that builder carries a certain energy. And you take calculated risks and you, you take aggressive stands sometimes in investments, aggressive portfolios at the early stages. You innovate, you push, you produce, you try. There's pride in it, and you're watching the balance climb and it becomes part of who you are and part of that moral code. And honestly, That's the thing. But then when the earning stops and the world hands you a new job title, spender, consumer, because that's the title they give you, you become the user of what you built and your whole soul rejects it. And of course it does, because you didn't spend 40 years becoming a builder so you could just become a leech on your own life's work. That's the, that's the thing. The identity feels foreign because it should. The industry is asking you to trade an identity you're proud of for one you'd never respect.

And so I'm gonna be straight with you because I'm not preaching from a mountaintop here. I'm living this right now. I'm coming up on 65.

The machine's built, it's been built for a while now.

I wrote the literal book on this and I still catch myself hesitating over purchases.

Not yachts, not sports cars, but I'm talking about, hmm, $1,500 trip maybe, a program that I was thinking of buying. And there are moments that I literally stood there and doing an internal tug-of-war and debate over a $100 to $200 purchase, asking myself, is this worthwhile? The guy who wrote Building Your Money Machine standing in the checkout line negotiating with himself over $200.

Now, my wife finds this hilarious. Me, a little less.

But the part of what's running in my head is legitimate.

My wife Stephanie is 12 years younger than me, so I'm not planning for one lifetime. I'm planning for mine and hers together, and hers beyond mine. And past that, I want this machine to be the inflection point for my whole family tree, for my son, for his wife, for my two grandbabies.

They don't need it. They're building their own wealth and they're doing just fine, and I'm totally proud of it, but I want it there for them anyways. So I know the pull. There's this point where frugal slides into miserly and miserly slides into fear-based and the line between them gets blurred from the inside.

So here's the shift that changed it for me. And it's the center of this whole episode. The move isn't to go from builder to spender, it's to go from builder to steward. See, a steward doesn't consume the estate. A steward doesn't bury it either. A steward deploys it.

They preserve it, they protect it, but then they put it to work for the exact purpose that it was created. And that purpose was never just a number. That purpose was a life. Your life, your spouse's life, your kids' lives, your grandkids' lives, the causes that you care about, the memories that will outlive you.

Read your own history honestly, and you'll see you were never really a saver.

You were a purpose-driven builder. The purpose just got lost somewhere around the third decade of watching the balance grow.

And the growing became the point. See, stewardship hands—

it hands you back the point. It gives you the builder identity to a new project, and it's much more meaningful than anything you've ever run. Converting the decades of discipline into a life on purpose with a plan. That word plan matters because stewardship without structure is a nice speech.

So How does a steward operate? What does the structure look like in practice? Well, it starts with tearing down the one rule the entire retirement industry has turned into a commandment. And that is this. You've heard, just put money away. Save, save, save, save, save. Here's the thing that I think that we need to think about. The equation isn't a money equation. The equation is a life equation, and this is where the calculators get it wrong. We are solely focused on money, and I totally understand that.

You've heard of the 4% rule, and I've used it. I use it as a ballpark, as a benchmark. But you pull 4% a year and adjust it for inflation, and your money should outlast you a 30-year retirement. Fine. As far as it goes, that's great. But let me be clear about this, because this might surprise you coming from a CPA. I like the 4% rule as a benchmark. I just have a problem with it as a commandment. And the industry took a research finding and turned it into dogma. And people get dogmatically married to that number, treating it like it is law of physics, when the entire point of having wealth is flexibility. In some years, the market's generous. In those years, maybe you draw 4.5% instead of 4% and take the family on a trip while everyone's healthy and enough to enjoy it. Other years they might be lean. We have up and down years. In those years, you might tighten up and draw less and delay maybe a big purchase. You flex, you adapt. A rigid rule applied to a flexible life will always fail in one of two directions. And the data proves both failures are real. So you already know the first one from the top of this episode. A third of retirees die with the pot, their nest egg, untouched. But that same EBRE study found a mirror image, okay? Roughly 1 in 5 retirees who started with more than $500,000 had less than 20% of it left by their mid-80s.

Overspenders, underspenders, side by side in the same data set.

Industry screams about one failure and stays silent on the other. Every calculator, every retirement commercial, every scare headline is aimed at "Don't run out." Nobody builds a billboard that says, "Hey, don't die with $2 million of an unlived life." And that's my core issue with these calculators. They hand you the math equation for what was always meant to be a life equation. How much can you withdraw is the wrong first question. The right first question is, what life are you funding? The math serves the life. It's never the other way around. We allow our life to define what the should be.

Now, the moment I say be flexible with spending, I know the fear fires off because Jared and Mary had the same one, and it even has a fancy name: sequence of return risk.

In plain English, it's the fear that the market crashes right after you retire and you're forced to sell investments at a loss or at the bottom to pay for groceries, and you lock losses in, recovery becomes near impossible. And that fear is legitimate. The risk is legitimate. The market drops roughly 2 out of 10 years. Planning on it happening because it will is the smart thing to do. But here's how stewardship neutralizes it. You build what I call a liquidity bridge before you need to touch a single share of stock. You've got layers of cash in a high-yield savings account, plus maybe cash flow coming off of bonds or something like that, enough set aside to carry the lifestyle across the down years. While the market does what it's always gonna do, and then it'll recover. And that's what I showed Jared and Mary in their own portfolio, how we structured it. When the market drops, and it will, they don't have to sell a single thing, not at a loss, not at a discount. The bridge carries them across and the portfolio heals and their lifestyle never feels the pothole. Then there's the bridge under your feet. A down market stops being an emergency because you have this. You don't panic about the rain when it comes in when you've got a roof.

You're not worried about the rain.

So the math says you can spend, but the bridge, the structure of your portfolio, having that bridge protects you when the markets turn, when things don't cooperate.

Which brings me back to Jared and Mary, 'cause I promised you the end of the story.

Their brains still wouldn't cash the check their spreadsheet wrote.

This is how we rewired them, and it started with a cruise ship. And the way out is this: you can't undo 40 years of conditioning with just a chart. Researchers at Morningstar prove it in a lab.

They told people that they had plenty of assets and took health problems off the table, even guaranteed Social Security would stay solvent, and people still underspent. That's a behavioral thing, and every fear was removed and the wiring still 1 the day. See, conditioning got you into this, so conditioning is what gets you out.

Small reps, real rewards, repeated until spending on that matters and what matters feels as natural as saving once did.

So with Jared, we didn't start with a philosophy lecture. We started with one trip.

See, for years they would tell me and talk about this Alaska cruise they want to do. Not any cruise.

It was a specific ship they dreamt about, and it lived on the someday list. And someday's where dreams will go to die quietly.

So I gave them an assignment.

I said, I want them to book it, not research it, not price it, not watch it for 8 months, to book it. These are recovering coupon clippers, remember? Okay. Left alone, they'd have compared fares until the ship rusted.

I said, "Book it!" And they went and they came back different, lit up, telling stories over each other. They were so excited. The trip cracked a door open that had been sealed for decades. Now, the trip alone wasn't the technique though. What came next was 90 days later, I sat them down and I asked 3 questions. Did anything change in your life financially? The answer was no.

Did you feel the pinch anywhere?

The answer again was no.

Do you feel shame or guilt about spending it?

The answer once again was no. And the response was, no, we feel elated. We can't wait to do it again. See, that 90-day debrief is the rewiring moment.

Their own lived experience just testified against their own fear. The disaster they were conditioning into their life that never showed up.

And the joy was never accounted for in that conditioning early on. And we ran that loop a few times and the brain started to update its own file on what spending means.

And this is why every plan I build, every time I work with a client, it has joy points in it, designed in it. I want you to have 2 to 3, maybe 4 joy points. The things that give you visceral joy, not momentary pleasures, visceral joy in the plan. Plan that you are thinking about, because it's going to train you to also spend on joy.

Not leftover money if it happens to be there, but scheduled and planned.

My wife and I plan our vacations a year in advance. They're in the budget, they are in the plan. We know it, it's booked, and it's not changeable. The trip, the gift to the kids, the experience, the sitting right there next to the insurance, next to the mortgage. Next to the rebalancing, because the joy is the point of the plan.

And notice what the joy points were for Jared and Mary. Nobody bought a Lamborghini. The spending that landed was time, health, experiences, the people they love, memories with each other while they both have the health to make them. That's what the machine was always for. And that's the difference of a wealthy life versus a rich life. The rich life is how you experience it. And that's why we're doing this. So if you want to start this week, steal my playbook.

Pick one thing that you've been deferring and start small if you need to. That the civilized flight instead of the red-eye, okay? The cleaner, the dinner where you order without scanning the right column first, or book your version of the Alaska cruise. The someday list item that doesn't have a date on it.

And then 90 days later, ask yourself the 3 questions. Did anything change? Did I feel the pinch? Do I feel guilt or do I feel alive? Let your own evidence out-argue your fear because it will every time if you give it the reps.

All right, now one warning before we land this plane, because there is a version of this message that I never want you to hear from me, and that is this. I'm not saying to just flippantly go out there and spend it all, because that's what some people hear. They go, oh, got it, Mel, I'm just gonna spend it all. No, no, no, no, no, that's the other ditch on the other side of the road, okay? And remember, one in, one in five big savers end up in it.

So stewardship isn't swinging from hoarding to splurging.

Stewardship is running the numbers, building the bridge, protecting the downside, and then with full confidence Deploying the wealth on purpose with a purpose.

So let's bring this home.

A third of retirees will reach their mid-80s having never touched what they built.

Not because the math failed them, but because nobody ever helped them make the shift from builder to steward. So their own discipline quietly became their cage. You now know the way through. Run the real math on what your machine can pay. Hold the 4% rule as a benchmark. And flex with the seasons of the market. Build the liquidity bridge so a down year is just a weather thing and it's not an emergency. You've got a roof over your head.

And then retrain the wiring with JoyPoints.

One book trip, one 90-day debrief at a time. But I wanna leave you with the part that keeps me up at night in a good way. I'm 65 this year. And when I think about my machine, I don't picture an account balance. I picture Stephanie taken care of for her whole life, not just mine. I picture my son and his family. I picture my two grandbabies and a family tree that bends in a new direction because of decisions that grandpa made decades before they could understand them. That's what your number is. Every dollar you were disciplined enough to set aside is stored up life waiting for you to have enough courage and have the courage to go live it. Don't be the person who wins the game and never takes the trophy off the shelf. You built the machine.

Now let it do what it was meant for, what it was built for, because earning more is not gonna make you free.

The money machine does. I hope this hits. And if this hit home, do me a favor, subscribe, like this video, gimme a thumbs up.

Leave me a comment, man. I love having a conversation with you. Let me know what your first joy point is that you're booking.

I read them all personally. All right, I can't wait to see you in the next one or on your flight to your path to financial freedom. As I always say, always, always strive to live a life that outlives you. See you in the next one. Cheers for now.

And that's it for this episode of Building Your Money Machine, where we help you learn how to master your money, eliminate financial stress, and live a life of choice. If you found this valuable or helpful, to you. Here's what I'd love for you to do. If you do me a favor, go to Apple Podcasts or wherever you're listening to this podcast and rate and review the show. It helps us tremendously to keep us at the top of the list so we can continue to get this information and this message out to people, because I truly believe that financial freedom is your birthright, and I want to help each and every one of you claim it. Thanks so much.