Jean Chatzky is concerned about retired money hoarders, people who have amassed a considerable sum and are terrified of watching it dwindle. They have spent decades baking a magnificent chocolate cake. Why eat it when it looks so beautiful sitting untouched in the windowsill?
But this is folly. The money was saved for a reason: to enjoy life, fulfill bucket lists, and eventually circulate back into the economy. Citing the University of Michigan Health and Retirement Study in her essay “Americans Aren’t Spending Their Retirement Savings,” Chatzky identifies a “retirement consumption gap”: many retirees spend considerably less than they could while remaining financially secure for the rest of their lives. She puts the gap at about 8 percent for middle-income retirees and as high as 53 percent for the wealthy. The result is an enormous reservoir of money sitting in retirement accounts rather than being used by the people who spent their lives accumulating it.
This reluctance to spend isn’t merely bad for the economy. It can be bad for the spirit. Chatzky argues that retirees may be better off spending more of their assets in exchange for a higher quality of life. The goal, after all, was never to die with the largest possible account balance. The money was supposed to finance the life.
Her argument is persuasive, but it doesn’t fully address one deep psychological reason for hoarding money: a large portfolio can sustain the fantasy that we aren’t going to die. The money becomes a chimera of immortality. It whispers, “Look how big I am. As long as I remain intact, I will protect you. But let my numbers dwindle, and perhaps your remaining years will dwindle with them.”
This condition has a name: Symbolic Immortality. Accumulated wealth becomes something that psychologically transcends mortality, and the retiree begins treating the endurance of the portfolio as evidence for the endurance of the self. More broadly, symbolic immortality appears whenever we invest an object, achievement, institution, or legacy with the hope that some representation of us will survive our biological death. Ernest Becker’s work and later Terror Management Theory explore this human impulse. We live through our children, our art and writing, our careers, buildings bearing our names, and, of course, our money. We dignify these things with grand words such as “legacy,” but lurking underneath the grandeur is something more primitive: we are terrified of disappearing.
There is nothing inherently wrong with leaving something behind. Children, books, charitable gifts, institutions, and inheritances can extend our influence beyond our lifetimes. The trouble begins when the symbol stops serving life and life begins serving the symbol. The portfolio that was supposed to provide freedom becomes something its owner must protect. The chocolate cake was baked to be eaten, but eating it now feels like destroying it.
That is why we should take Chatzky’s warning seriously. A large retirement balance can represent prudence and security, but hoarding money merely because spending it makes mortality feel more real is something else entirely. At that point, preserving the money has become more important than living the life the money was accumulated to support.
Eat the cake.
