Retirees often are reluctant to draw on their nest eggs in their golden years, according to one retirement expert, after spending decades saving up.

“[The] reality is that many of us are accustomed to spending less than our income during our working years and then we get to retirement, and it feels a little bit odd spending down our savings,” Michael Finke, an investments and retirement professor at The American College, recently told Yahoo Finance Live. “It can seem a little scary to spend down our savings.”

Finke described why certain people, especially those with flush retirement savings, don’t spend as much as they could as a “puzzle” because their spending sacrifices during the working years don’t seem worth it.

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Retirees generally fall into two camps: spenders and non-spenders, Finke said, with research showing that pension carriers are more apt to spend.

“Those who have a pension spend significantly more than those who have the same amount of wealth and investment assets,” he said. “People just tend to leave lesser investment assets sit — they don't actually spend them.”

Retirees generally fall into two camps: spenders and non-spenders. Finke shared that research points to pension carriers being more apt to spend. (Photo: Getty)

Immediately following retirement is when people tend to drop the most cash and “get the most enjoyment from spending,” he explained. After all, it’s when people typically have the most energy to spend money on things like grand vacations and relocations.

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Finke’s advice is to resist the temptation of owning retirement status symbols like RVs or vacation homes.

"Give different things a try,” he said, while still “using your money —don't just sit on it.” 

Instead of a spending free-for-all, he encouraged new retirees to reflect on what’s going to spark the most joy and not “dump all of your money into one thing.”

With pension availability dwindling, especially in the private sector, Finke shared that the next best thing would be an annuity or a financial product that guarantees a lifetime stream of income. That enables retirees to enjoy the money they saved because “it gives you a license to spend it without worrying that you could potentially run out,” he said.

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“Remember there are only two things that you can do with your money in retirement," he said. "Spend it or give it to someone else.” 

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Stephanie is a reporter for Yahoo Money and Cashay, a new personal finance website. Follow her on Twitter @SJAsymkos.

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