Why Having Extra Money in Retirement Is a Good Problem

A National Bureau of Economic Research study finds married couples and married men accumulate substantially more wealth than singles, and many retirees spend only a modest share of their assets. The article outlines saving strategies the authors mention, including starting early, using tax-advantaged accounts, investing steadily, and automating contributions.

Many people reach retirement with more savings than they expected, and the article describes that outcome as a "good problem." A National Bureau of Economic Research study is cited to explain differences in who accumulates larger wealth over a lifetime. The study's reported motives for modest spending in retirement include saving for medical expenses and leaving money to heirs. The article also lists strategies it says can help build larger retirement balances. Key findings: - The NBER study reports married men who work save "substantially" over their lifetimes, and married couples tend to have more than twice the wealth of singles at all ages. - The study finds married women's labor-market participation peaks in middle age, while single men show declines in work and savings after about age 40. - The research notes single men and single women without marriage prospects increase labor-force participation and savings from an early age. - Overall, the study reports retirees spend only a modest portion of their wealth and that wealth typically decreases only modestly after retirement; saving for medical costs and bequests are cited as common motives. - The article mentions practical saving approaches such as starting early, investing consistently, maximizing tax-advantaged accounts, automating contributions, and consulting a fiduciary financial planner. Summary: The article suggests that marital status and work patterns help explain why some households enter retirement with sizable savings and that many retirees maintain wealth for medical costs or heirs. Undetermined at this time.