468: The Psychology of Spending More in Retirement to Increase Happiness with Dr. Michael Finke

Today, I'm talking to Dr. Michael Finke. Michael is the Professor of Wealth Management at the American College of Financial Services. His research is focused on retirement income planning, retirement spending, life satisfaction, cognitive aging, and investor behavior. He's published over 50 peer-reviewed articles, and I'm thrilled to have him back on the podcast today.

One aspect of retirement that many retirees struggle with is spending money that they've saved. It's a mental block for many who have focused on saving money, even for those who have saved enough to live comfortably and enjoy their retirement years. For some, spending money on leisure and enjoyment seems like an irrational financial decision.

In our conversation, we explore the link between human nature and finance and why the fear of death and running out of money prevents us from making rational financial decisions. We also discussed the pros and cons of annuities and how retirees are often happier with guaranteed income versus a larger nest egg.

In this podcast interview, you'll learn:

• How Dr. Finke's early research into food consumption led him to a career as a finance professor.
• Reasons why so many people are uncomfortable spending down in retirement–and how to restructure your finances to shake common misconceptions.
• The benefits of spending more in your 60s and 70s–even if you plan to live to 100.
• The advantages of annuities and guaranteed income in early retirement years.
• The psychology behind how using guaranteed income for spending leads to increased happiness.
• The key factors that determine happiness for countless retirees all over the world.

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Show Notes: Howardbailey.com/468

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