Retirees spend twice as much when they have guaranteed income, research finds

Retirees spend twice as much when they have guaranteed income, research finds

David Blanchett, head of retirement research for PGIM DC Solutions and Michael Finke, professor of wealth management at the American College of Financial Services. Guaranteed income sources like Social Security, pension assets, and annuities give people a “license” to spend more in retirement, new research found.

The amount of extra discretionary spending is significant, as those with assets in those categories spend about twice as much as those whose savings are in investments, according to the paper, “Guaranteed Income: A License to Spend,” published by an annuity industry group .

The reason is that people think about guaranteed income sources differently […]

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