Retirement income planning often starts with a deceptively simple question: How much can a client safely spend? A harder question: Why do many retirees spend less than their assets appear to allow?
For many retirees, the overarching reason is FORO – a relatively new term that stands for “Fear Of Running Out.”
A growing body of retirement research has pointed to underspending in retirement, but the behavior is not driven by a single fear or constraint. It reflects a mix of uncertainty, preferences, and trade-offs that can look very different from household to household.
That distinction matters for financial advisors. A client may be worried about things like living too long, inflation, health care, long-term care, market losses, leaving money to family, or not having a paycheck anymore. Each scenario requires a different conversation.
For advisors, the opportunity is to make retirement income planning more personalized and more explicit. Instead of beginning with a product, portfolio or withdrawal percentage, begin with the client’s hesitation: What is the specific risk that makes spending feel uncomfortable? Which concern is most important today? Has that changed with age, health, markets or family circumstances?
Exploring the drivers behind FORO
To better understand drivers that contribute to FORO, we analyzed a demographically representative online survey conducted by Morning Consult from June 16-20, 2026. The survey included U.S. consumers age 50 and older with at least $100,000 in investable assets. Of the 2,001 individuals who completed the survey, our analysis focuses on the 1,000 respondents who were retired.
Respondents were asked to rank eight reasons that might make them hesitate to spend money from retirement savings: inflation, long-term care, longevity, bequest goals, investment risk, not having enough savings, no longer working, and health care costs.
The most prominent concerns were familiar ones. On a weighted-rank basis, inflation was the highest cited risk, followed by health care costs and longevity. Longevity – concern that they will outlive their money – was also the most frequently selected top-ranked reason, while bequest goals and no longer working were generally less prominent.
A generic plan may overlook client concerns
The practical implication is not that lower-ranked concerns can be ignored. In fact, the dispersion across responses is one of the more important findings. Even if inflation, health care costs and longevity are broadly applicable retirement risks, many retirees also have goals and anxieties that are more personal: leaving assets to family, avoiding the regret of overspending early, or preserving flexibility in case late-life expenses rise.
For advisors, this reinforces the limits of a generic retirement income planning framework. A strategy that addresses one risk can create tension with another. For example, delaying Social Security benefits can help address longevity and inflation risk, but it may conflict with bequest preferences if a client is concerned about dying earlier in retirement. The right strategy depends on which risk the client is primarily trying to manage.
The survey also found meaningful variation by age and total financial assets. Concerns tied to longevity, long-term care, investment risk and bequest goals tend to become more important at older ages and at higher levels of total financial assets. Meanwhile, concerns about not having enough savings and inflation generally decline as age and assets rise.
That pattern is likely to feel intuitive to many advisors. A younger retiree or a household with fewer assets may focus more heavily on whether the money will last and whether prices will erode purchasing power. A higher-asset or older household may be more focused on protecting against late-life risks, preserving optionality, and balancing personal spending against legacy goals.
Where advisor perceptions diverge
The analysis also compared retiree responses with an online survey of 231 financial advisors conducted July 6-9, 2026. Advisors were asked to rank the reasons they believe influence clients’ underspending in retirement. Overall, advisor perceptions were reasonably aligned with consumers, but some gaps emerged.
Advisors placed more emphasis than consumers on not having enough savings, no longer working, and longevity. Consumers, by contrast, placed relatively more weight on inflation, investment risk, long-term care and health care costs.
These differences are not necessarily large enough to suggest advisors are missing the point, but they do underscore the need to ask before assuming.
The key takeaway: Underspending among retirees is not a single problem with a single solution. FORO presents a planning challenge that sits at the intersection of technical analysis and client psychology.
Some retirees may need different retirement income options. Others may need clearer health care or long-term care planning. Some may need help distinguishing between a true legacy goal and a generalized reluctance to draw down assets.
A retirement income plan is most useful when it gives clients freedom and confidence to spend where appropriate, with guardrails where caution is warranted. For financial advisors, this research suggests it’s crucial is to understand the primary reason a retiree is holding back — and then building a plan that addresses that concern without overlooking the others.
The information contained herein is provided by PGIM, the principal asset management business of Prudential Financial, Inc. (PFI), and a trading name of PGIM, Inc. and its global subsidiaries and affiliates.
This information is for informational purposes only and does not constitute investment advice, a recommendation, or a solicitation where prohibited. Certain information has been obtained from sources that PGIM believes to be reliable as of the date presented; however, PGIM does not guarantee its accuracy or completeness. Information may be changed without notice, and PGIM has no obligation to update it.
PGIM and its affiliates may develop and publish research that is independent of and different from the information contained herein. PFI of the United States is not affiliated in any manner with Prudential plc, incorporated in the United Kingdom, or with Prudential Assurance Company, a subsidiary of M&G plc, incorporated in the United Kingdom.
