By Randy Myers
Helping Americans turn their retirement savings into a dependable source of income isn’t simply a matter of devising sound investment strategies. It also requires understanding the emotions and behavioral tendencies that influence how retirees make financial decisions, says Nick Fountain, co-host of NPR’s Planet Money podcast.
Speaking at the Stable Value Investment Association’s 2026 Fall Forum, Fountain drew on academic research and interviews with retirees to explore the challenges of turning retirement savings into retirement income.
Among the research Fountain reviewed through the National Bureau of Economic Research was a study by University of Illinois professor Jeff Brown and colleagues examining the relationship between personality and household wealth. Using information from the University of Michigan’s Health and Retirement Study, the researchers found that people who were more conscientious and open tended to have greater wealth over time, while those exhibiting higher levels of neuroticism or agreeableness tended to have less.
Fountain also explored Brown’s research into procrastination and its consequences for financial decision-making. People who procrastinate on tasks such as enrolling in health insurance, he learned, tend to exhibit similar tendencies when managing retirement savings and withdrawals.
“Overall, procrastination is really bad for your financial health,” Brown told Fountain in a recorded interview played during the presentation. Discussing the retirement-plan behavior of procrastinators, he said, “At every step of the way, they take longer to sign up, they save less, [and] they’re more likely to go into the default, which before the Pension Protection Act was really bad because they would just get thrown into a money market plan.”
When it comes to decumulation of retirement assets, which Brown called his favorite topic, he said procrastinators tend to be “… overweighting near-term consumption and downweighting future consumption more than we think they rationally should.”
While the academic research offered useful insights, Fountain wanted to hear directly from people confronting retirement decisions. He visited a neighborhood pickleball court, where he interviewed retirees about their financial priorities and spending habits. He also reviewed interviews conducted with people of various ages by former SVIA Community Manager Magda Mankel.
Fountain found that many people devote considerable attention to accumulating retirement savings but give relatively little thought to how they will eventually spend those assets. They also tend to be conservative with their savings and reluctant to spend down principal. They prefer to maintain control over their assets and preserve access to their money rather than commit to inflexible payout arrangements. And, anxious about how much they can safely withdraw, many seek help from professional financial advisors.
One retiree, a former oil industry worker named Bill who retired at age 50, illustrated the difficulty of changing deeply ingrained financial habits. After diligently saving for retirement throughout his career, he was reluctant to touch his principal.
“Yeah, I’m just kind of a cheapskate,” Bill told Fountain. “I lived on peanut butter and bread in college, and so it’s hard to adjust to blowing a lot of money when that’s limiting my ability to buy a boat right now.”
While the exchange was humorous, Fountain concluded that retirement spending decisions are deeply emotional.
“I was not talking about money with these people; I was talking about emotions,” he said.
That realization led Fountain to behavioral economics, which examines how psychological factors influence financial decisions. Several well-established behavioral tendencies, he suggested, help explain why retirees struggle with decumulation.
Status quo bias can make retirees reluctant to abandon spending and saving habits developed over a lifetime. Present bias can lead people to place too much importance on immediate consumption relative to future needs. Loss aversion can make spending accumulated savings feel more painful than the satisfaction derived from using those assets. And the endowment effect can lead people to assign greater value to something simply because they already own it, perhaps contributing to fears about spending down savings.
Behavioral economics has helped shape retirement plan features designed to counteract those tendencies. Fountain pointed to automatic plan enrollment, automatic escalation of plan participant contributions, and simplified investment choices as retirement plan features that reflect principles of behavioral economics. But he cautioned against assuming that every behavioral intervention will produce the desired results, noting that researchers have encountered difficulties replicating some findings in psychology and behavioral economics.
Fountain urged the stable value industry to recognize that retirees’ investment decisions reflect emotional concerns as well as financial considerations. He further suggested that retirees’ desire to preserve their savings, maintain flexibility, and avoid losses may help explain the appeal of stable value funds.
Fountain closed with a lighthearted comparison between stable value funds and giraffes. Giraffes, he explained, have the height to maintain perspective, natural defenses against the thorns they encounter, and unusually large hearts. Stable value funds, similarly, can help protect investors from volatile markets, while the industry can benefit from showing greater empathy toward the people it serves.
“What are stable value funds for if not to protect the end users from the thorns of a gyrating market?” Fountain said. “Your end users are flocking to your funds, as I’ve learned, because they are freaked out about their loss of purpose, about the fragility of life, … about losing control. And the more the industry can meet them with empathy and with your big giraffe hearts, the better they’re gonna respond.”