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The Real Retirement Crisis Isn’t Running Out of Money — It’s Running Out of Confidence

Jul 10, 2026
by  Josh Paddock
  read time: 3:14

A few weeks ago, I sat across from a couple in their early 60s.

They had done everything right.

No debt.
About $3.8 million between retirement accounts and brokerage assets.
House paid off.
Kids through college.

And yet, the first question they asked wasn’t,“Can we retire?”

It was:
“Are we going to be okay?”

Then came the real tell…

“We just don’t want to mess this up.”

 

The real issue isn’t math

From a purely financial standpoint, they were fine. More than fine.

But that didn’t matter.

What they were feeling had very little to do with math—and everything to do with uncertainty.

This is becoming the dominant pattern we see, especially in households with $2M–$5M+.

They’re not running short on assets.

They’re running short on confidence.

And they’re not alone. Even nationally, retirement confidence has been slipping, with just 64% of Americans saying they feel confident about having enough money in retirement, driven by rising costs and uncertainty about healthcare and government programs. [ebri.org]

So what’s really going on?

 

Why people with millions still worry

1. The shift from saving to spending is harder than anyone expects

For 30–40 years, the goal is simple: accumulate.

Then one day, the script flips.

“Now go spend it.”

That’s not a financial transition. That’s a psychological one.

Research shows many retirees—even those who can afford it—underspend out of fear they’ll run out of money. [schwab.com]

We see it all the time:

  • The couple that won’t renovate the house they plan to stay in forever
  • The retiree who hesitates to book a $10,000 trip with a $3M portfolio
  • The constant second-guessing of withdrawals

It’s not because they can’t afford it.

It’s because spending feels like losing.

 

2. Healthcare is a giant, undefined liability

You can model retirement income.

You can’t perfectly model health.

  • The average 65-year-old couple may spend over $170,000 on healthcare in retirement [newsroom.f...delity.com]
  • Two-thirds of pre-retirees say healthcare is a top concern—more than running out of money itself [forbes.com]
  • Long-term care costs are rising faster than income and can spike dramatically late in life [aarp.org]

And here’s the problem:

It’s not just the cost—it’s the unpredictability.

People don’t fear writing a check.

They fear not knowing how big the check might be.

 

3. Market volatility feels different when there’s no paycheck

When you’re working, market dips are annoying.

When you’re retired, they feel personal.

Because now, withdrawals matter.

Sequence-of-returns risk—taking money out during downturns—can materially impact how long a portfolio lasts. [cnbc.com]

Even sophisticated investors know this.

And that knowledge creates a constant low-level anxiety:

“What if the worst market shows up right when I stop working?”

 

4. Adult children change the equation

This one doesn’t show up in most retirement calculators.

But it shows up in real life.

  • Helping with a home purchase
  • Covering a gap during a job loss
  • Grandchildren education
  • Silent expectations that “we’ll be there if needed”

No one puts a line item in their plan for*“family safety net.”*

But emotionally, they already have.

 

5. Information overload is quietly making it worse

There has never been more retirement advice available.

And paradoxically—that’s part of the problem.

Too many options and too much conflicting information can lead to confusion, paralysis, and second-guessing. [moneyrates.com]

People bounce between:

  • Articles
  • Podcasts
  • YouTube strategies
  • Friends’ opinions

And instead of clarity, they get noise.

More information doesn’t lead to better decisions.

It often leads to less conviction.

 

Retirement today is more psychological than financial

Here’s the uncomfortable truth:

You can “win the game” financially…
…and still feel like you’re losing.

Because retirement isn’t just about:

  • Portfolio size
  • Withdrawal rates
  • Tax strategy

It’s about:

  • Can I spend without guilt?
  • Will I regret this later?
  • Am I missing a risk I don’t see yet?
  • What happens if something goes wrong 20 years from now?

That’s a confidence problem.

Not a math problem.

 

A real-world planning observation

The clients who feel the best in retirement are not the ones with the highest net worth.

They’re the ones with:

  • A clear income plan
  • Boundaries around “what’s safe to spend”
  • A strategy for healthcare and long-term care
  • Someone they trust to pressure-test decisions

In other words—they don’t have fewer uncertainties.

They just have a framework for dealing with them.

 

What people often miss

Most traditional financial planning answers the wrong question.

It answers:

“How much can I withdraw?”

But the real question clients are asking is:

“How much can I spend without worrying every time I do?”

Those are very different conversations.

 

Practical takeaways

If you’re within 5–10 years of retirement—or already there—these are the conversations that actually move the needle:

1. Build an income floor, not just a portfolio

Predictable income (Social Security, pensions, annuity structures, or other stable sources) changes behavior.

When basic expenses are covered, everything else feels optional.

That’s powerful.

 

2. Separate short-term spending from long-term growth

Holding a few years of cash or conservative assets helps buffer market volatility.

More importantly—it reduces emotional reactions when markets dip.

 

3. Define “enough” clearly

Not in theory.

In real numbers:

  • What does your lifestyle cost?
  • What’s discretionary vs. essential?
  • What’s the margin of safety?

Confidence comes from specificity.

 

4. Stress test the “what ifs”

Healthcare. Long-term care. Market downturn early in retirement.

When people walk through those scenarios in advance, the fear often loses its edge.

 

5. Simplify your decision environment

Less noise. Fewer opinions. Clearer inputs.

The goal isn’t more information.

It’s better filtering.

 

Final thought

The biggest risk in retirement might not be running out of money.

It might be never fully trusting that you have enough.

And if that happens…
people end up sacrificing experiences, generosity, and freedom in years they can’t get back.

That’s a different kind of loss.

The goal of planning shouldn’t just be to make retirement work on paper.

It should be to make it feel livable in real life.

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