Retirement savings must cover a life span nobody can predict. That creates an awkward problem: spending too freely could leave a retiree short of money, while spending too cautiously could turn retirement into decades of unnecessary penny-pinching. Neither outcome sounds particularly appealing after years of working toward financial freedom.
The hardest part involves making decisions without knowing the final number of birthdays those savings must fund. A retiree might need the money for 10 years, 25 years, or considerably longer. Meanwhile, the opportunity to travel, pursue hobbies, and enjoy good health can change with age. A workable retirement plan must protect against a long life without treating every enjoyable purchase like a threat to survival.
