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Retirement Planning

Spending in retirement: ant or grasshopper?

Your lifelong spending or saving habits could affect your quality of life in retirement. Find out how a solution like an annuity can help you feel more confident and in control.

Understanding ant and grasshopper spending habits

According to one of Aesop's Fables, “The Ant and the Grasshopper,” ants gather food to prepare for winter while grasshoppers have fun instead. Likewise, individuals generally fall into one of two groups based on their spending behavior:

  • "Ants" tend to save more and spend less than their income.
  • "Grasshoppers” tend to spend up to their income limit (and sometimes more).

While the fable is a lesson on frugality, both ends of the spending spectrum can create potential risks when carried into retirement. That's why it's important to understand your saving and spending habits and how they may affect your retirement goals.

Old habits are hard to break, and this is especially true for spending behavior over a lifetime. People tend to carry saving or spending habits from their working years into retirement. They become used to a lifestyle that's difficult to adjust, even when financial circumstances change.1

Get started by considering two individuals — an ant and a grasshopper — and the different risks they face in retirement. Once you uncover spending behaviors and risks you might not have considered, learn how you can potentially build more confidence and spending freedom with a guaranteed income solution, whether you’re an ant or grasshopper.

Meet an ant: Andy

The scenario — Andy always spends less than his income. The financial safety net he's accumulated gives him a sense of security and control. Andy's used to a lifestyle of careful spending on a few high-value purchases, like his home. He'll maintain his frugal habits in retirement out of complacency and fear that he'll run out of money during his lifetime.

Picture of Andy who spends like an ant in retirement

"I'm very cautious about how I spend my retirement savings."

The risk — Underspending could lead to Andy leaving a larger financial legacy to his heirs than he intended, also called an "unintended bequest." Even though it sounds like a positive thing, this situation could potentially lead to unexpected tax complications for his beneficiaries. Not only that, he also might regret missing out on experiences and purchases he could afford.

The opportunity — Leisure spending — like eating out with friends, hobbies and going on vacation — provides significantly more happiness than other purchases that appear more practical.1 Andy needs to feel he has freedom to spend more on leisure without worrying about running out of money in his lifetime.

The solution — Andy's financial professional helps him use some of his retirement savings to create a source of guaranteed income. An annuity with a lifetime income benefit delivers a predictable and protected income stream he can count on for the rest of his life. Now, Andy can spend his other savings more confidently without fear he'll outlive his money.

Meet a grasshopper Greta

The scenario — Greta spends money to enjoy life and often splurges on hobbies, dining out and travel. She tends to spend up to the limit of her income. Greta hopes she's saved enough to maintain her lifestyle in retirement. She would have difficulty changing her habits due to a drop in income.

Picture of Greta who spends like a grasshopper in retirement

"I need my retirement savings to keep up with my lifestyle."

The risk — Overspending could derail Greta's retirement strategy, especially if she experiences an unexpected loss of savings. A market decline, health condition or other unplanned event may require her to cut spending or risk running out of money (or both).

The opportunity — Greta needs guidance on how much she can safely spend. By staying within a set limit, she can maintain her lifestyle and enjoy spending money with more confidence.

The solution — Greta's financial professional helps her create a guaranteed income stream using an annuity with a lifetime income benefit. Even if the contract value falls to zero, she can count on this source of income for life and plan her spending limit around this amount. The annuity also has built-in features to help her financially prepare for unexpected health and life events.

Building confidence through key retirement strategies

Whether you're an ant or a grasshopper, understanding your spending in retirement is helpful for creating a better strategy for yourself.

The 2023 study from the Alliance for Lifetime Income found that 93% of consumers who protected their portfolio with an annuity in 2022 were satisfied with their investment choices. 2 The study also found that 97% say having guaranteed lifetime income in addition to Social Security in retirement is valuable.2

If you’re considering an annuity as part of your retirement strategy, you’re not alone. As a form of insurance, an annuity can provide you with a source of guaranteed retirement income for a set period or your lifetime.

The income you receive from an annuity can help:

  • Supplement Social Security payments.
  • Pay for unexpected health care expenses not covered by Medicare.
  • Provide a steady stream of income to support your retirement lifestyle and spending habits.

Protective offers several types of annuities that can fit into your retirement goals. If you’re interested in learning if an annuity is right for you, speak with your financial professional today.

Explore these additional topics as you consider annuities:

1 Grasshoppers and Ants in Retirement, June 2018. 

2 The Alliance for Lifetime Income’s Protected Lifetime Income study, 2023.


As you determine what annuity might be right for you, remember they are intended as vehicles for long-term retirement planning, which is why withdrawals reduce an annuity’s remaining death benefit, contract value, cash surrender value and future earnings. Withdrawals from annuities may also be subject to income tax and, if taken prior to age 59 ½, an additional 10% IRS tax penalty may apply. Because Protective and its representatives do not offer legal or tax advice, it is important that you talk with your own legal and tax advisor about your specific tax situation.


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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective or its subsidiaries.

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