FOR many Filipinos, retirement is the reward for a lifetime of hard work. For decades, we wake up early, build our careers, raise our families and prepare for the future. We are constantly reminded: save and invest, spend wisely and save more today so we can enjoy tomorrow.
But what happens when tomorrow finally arrives? For some retirees, the surprising answer is: they still do not want to spend.
After decades of saving, frugality has become a habit. Every peso spent feels like a peso taken away from their security. Even when they have accumulated enough for a comfortable retirement, they continue living as though they are still preparing for one.
Consider a couple with P15 million in retirement savings. Their home is paid for. They have social security income. Their children are financially independent. Yet they hesitate to travel, eat out or pursue hobbies they could not enjoy while working.
“Baka maubusan tayo,” they tell each other. So, they postpone the trip. They put off the hobby. They continue saying, “Maybe next year.”
The irony is that they may have saved enough. But they never learned how to spend in retirement. This is an often-overlooked retirement risk.
Saving is essential. It builds financial security and gives us the resources to eventually stop working. But retirement changes the purpose of money. During our working years, we accumulate. In retirement, we should begin to use those accumulated resources to support the life we envisioned after work.
The challenge is knowing what “enough” means.
Fear of running out of money is real. Retirement can last 20 or 30 years. Health care costs can be unpredictable. Inflation reduces purchasing power. Markets can fall. And we do not know how long we will live.
These concerns can make retirees excessively cautious. A person with P10 million may behave as though he has only P3 million. The fear of outliving their money becomes so powerful that they under-spend throughout retirement.
But sometimes the problem is not the money. It is the mindset.
We have spent decades learning how to save. We have been taught to sacrifice today for tomorrow. It is not easy to suddenly reverse that habit when tomorrow finally comes.
There are also uniquely Filipino reasons for underspending. Some retirees feel guilty spending on themselves after spending most of their lives providing for their families. Others want to leave as much as possible to their children.
Leaving a legacy is admirable. Our children may appreciate what we leave them. But they also want us to enjoy what we worked so hard to earn.
Retirement also comes at a remarkable time. The speed of innovation is creating opportunities for retirees that previous generations never had. Technology has made travel easier, learning more accessible and communication with family more immediate.
We can take online courses, discover new hobbies, improve our health and fitness through technology, explore new destinations and enjoy forms of entertainment that did not exist when we were younger. Intentional spending should allow retirees to enjoy these opportunities, not be afraid of them.
Of course, learning to spend does not mean abandoning financial discipline. There is an opposite danger today: Spending too easily.
Online shopping has made buying almost effortless. A few taps can bring almost anything to our doorstep. Flash sales, free shipping and targeted advertisements can turn a small purchase into a regular habit. “Mura lang naman,” we tell ourselves. But many small purchases can quietly add up to thousands of pesos every month.
Retirees need boundaries. Before buying something online, ask: Do I need it? Will I use it? Did I plan for it? For nonessential purchases, a 24-hour waiting period can help separate genuine desire from impulse. A monthly allowance for discretionary spending can also provide freedom without letting spending get out of control.
The answer is not to stop spending. It is to spend intentionally.
One useful starting point is the 4-percent withdrawal rule. As a general guideline, a retiree might withdraw about 4 percent of a retirement portfolio in the first year, with subsequent withdrawals adjusted for inflation. But it is not a guarantee and does not apply equally to everyone. Age, health, investments, other income and personal circumstances all matter. Its real value is that it gives retirees a framework for thinking about sustainable spending rather than simply avoiding spending.
It can also help to divide retirement money according to purpose. One portion can cover essential needs such as food, utilities, housing and health care. Another can be dedicated to lifestyle like travel, dining, hobbies and time with family and friends. A third can provide a reserve for emergencies, major medical expenses or a legacy.
When money has a purpose, spending becomes easier. If you have deliberately set aside money for travel, taking that trip is not irresponsible. It is part of the plan.
And the plan should be reviewed every year. Look at spending, investment performance, inflation, health care costs, cash reserves and other sources of income. If investments have performed well, there may be room for more discretionary spending. If markets have fallen sharply, it may make sense to temporarily reduce nonessential expenses.
The objective is balance — neither reckless spending nor excessive frugality.
Perhaps the important retirement question to ask is, “How can I use the money I saved to make the most of the life I still have?”
Spend on experiences that create memories. Spend time with people you love. Travel while you are healthy enough to enjoy it. Learn something new. Pursue the hobby you postponed. Enjoy the home you worked so hard to build. Give to causes that matter to you.
After decades of saving, retirees deserve a comfortable retirement. Their financial discipline should be rewarded not by an ever-growing bank balance they are afraid to touch, but by the freedom and peace of mind that money was meant to provide.
Retirement is not the time to stop being responsible with money. But neither is it the time to be unnecessarily afraid of spending it.
Some retirees do not have a money problem. They have a permission problem. For most of our working lives, we tell ourselves, “Not yet.” Retirement is when we can finally say, “Now.”
We save for retirement so we can live. And when retirement finally comes, we should give ourselves permission to do just that.
