«At the beginning of your life you think of retirement as that moment in which you are going to be calm, you are going to enjoy and do many things; in my case, I planned what I would do with my wife, so you save and postpone things «whatever you want,» says Luis MG. In his case, he retired when it was his turn, that is, at the age of 65. Now he is 72 and says that all those things he had imagined took a radical turn when the day approached when he would permanently stop working.
«We always wanted to go to Egypt because, when we got married, it was our dream; I was 27 years old and my wife, Marta, 24. And, of course, at that time it was impossible, we were starting to work and we didn’t have any money left over from the wedding to pay for it,» says this computer scientist, who worked for 40 years as a civil servant in Madrid. Alternatively, they went to Galicia, where they spent a wonderful week thinking about the pyramids, and even read some guidebooks they had. Therefore, retirement seemed like the perfect time to make that dream come true, but, as this retiree says, the scenario changed.
Luis and Marta have three children and two grandchildren, something that made them rethink their project after retiring, despite having spent recent years thinking about Egypt and everything they wanted to do. And the economic situation of their entire family is something that they have taken into account when deciding. «In the end, we both had such a bad conscience when we thought about going on a good trip that we ended up doing it only if my children and grandchildren come; everyone is fine, but they can’t save anything and they don’t have any left over to spend, doing something all together costs a fortune and we put it all together,» he says.
Luis’s case shows how, when it comes time to retire, many people experience a complicated internal debate between spending the money saved (or from the pension) or continuing to save for their children or close relatives, to which are added the uncertainties inherent to aging, such as those related to health and dependency. To this fear of the uncertain future and the insecurity of not knowing how long their money will last are added the rise in prices and global uncertaintypolitical and financial. And all of this has created a breeding ground that has made negativity grow regarding the future.
Thus, both specialists in psychology and in economics and wealth management propose a much less pessimistic scenario than many people believe, both for current retirees and for those of future generations. “There are people who, when retirement arrives, cannot navigate it,” explains clinical psychologist Arun Mansukhani, also author of the book Condemned to Understand Us (Editions B). “If we knew for sure what we were going to live through and what our lives were going to cost us, we would organize ourselves, but it is impossible; on the other hand, if we lived in a society in which the cost of living was lower, there would be less uncertainty at the time of retirement,” he continues.
According to Mansukhani, the housing crisis has also contributed to this anxiety about what is to come. «As what has become most expensive is housing, thinking about donating it to children generates a very high level of stress in the elderly, since the fundamental function of money in this age group has been to create wealth; that gives them more peace of mind,» he explains. And he continues: “In fact, having that security, they can spend the rest they have, although to do so they must know how to plan well.”
In that sense, Mansukhani brings to the table the lack of financial education in Spain, accentuated in the generation that is now over sixty. Added to this factor is another psychological one: “The more we look back in time, the more we will find in Spain generations educated in austerity, those who grew up in the post-war era are used to saving because you never know what is going to happen,” says this psychologist. “Even many people raised by parents who lived through the post-war period still have this idea embedded in their DNA, they have been working their entire lives and postponing gratification for a future moment.”
However, the case of Camilo MH is very different. At 79 years old and widowed, he is a convinced enjoyer. This retired civil engineer is clear that what he wants is to spend what he has on what he wants, while he can. «I have given my four children the best education I could, and both my father and I and my brothers have worked to have and maintain assets and live with financial comfort. Why shouldn’t my children do the same?» he argues, without a hint of bad conscience. “They will already inherit several houseswhich already seems enough to me, and I manage the rest to do what I want.”
The Bank of Spain’s Family Financial Survey (EFF) describes the financial situation in figures. According to 2022 data, the value of average assets in Spanish households is greater the older the head of the family is. Thus, people aged 74 have an average asset worth 454,700 euros, while that of those between 45 and 54 years old is slightly more than half, 257,300 euros. As for those under 35 years of age, their average net worth is 77,600 euros, influenced by both the assets acquired and their income.
The reality is that a multitude of different situations arise when making this decision. Furthermore, the perception of retirement risk in Spain has changed a lot in recent years. «It depends a lot on your circumstances, particularly your family ones; current retirees, or those close to it, are part of generations that have been able to accumulate much more wealth than later generations or current young people,» highlights Laura de Pablos Escobar, professor of Applied Economics at the Complutense University. And he reflects: «Now there is a greater perception of risk, from real estate prices to salaries; many people earn less now than they did in the late eighties.»
In this way, the trend in the generations that are now of retirement age has been “the accumulation of capital, basically,” says this economist, and clarifies that those who are currently in a better situation are those who have accumulated years of work for decades. “Now the same thing is no longer happening, in fact, there are pensions higher than many current salaries,” he argues. And that does not mean that the former are high, but that salaries are too low for the current standard of living.
But apart from this, according to clinical psychologist Mansukhani, the biggest difficulty at the time of retirement is changing a person’s mental habit for decades. «That click after retirement is very difficult, because you have been doing things in one way for 30 or 40 years and you don’t know how to change it; their idea was not to spend waiting for tomorrow, but that day never comes and some people die without children and leaving a fortune. It is what we call the saver’s paradox, people who lived in an austere way despite having resources.»
In that sense, these are hoarding people, and accumulating can generate an addictive format, as the psychologist says. And according to the specialist, this habit entails not knowing how to make a role change towards the figure of the enjoyer. «What’s more, if you do it, it often happens that you don’t really enjoy it, because you feel a lot of guilt about spending, and the enjoyment disappears; these are people who feel more satisfaction saving than spending, because it takes away fear, anxiety and uncertainty,» he says.
Furthermore, they are generations that do not have “leisure education.” «It happens especially in Spain, precisely because of the austerity learned after the post-war period; when consumerism began to flourish in the eighties, it did not make them change, it caught them too late to modify their already established customs,» Mansukhani specifies.
According to the psychologist, we currently live in a time where pessimism about the future has established itself, despite not having real data to certify what will happen. «We live with that kind of anguish, of absolute conviction, that the next generation will be the first to live worse than their parents; this is a phrase that has been repeated for a long time despite the fact that, in reality, there are no absolute certainties.»
Furthermore, when older people face important decisions about the management of their assets, the majority make these types of decisions emotionally and not rationally, psychologists explain, something much less controllable. And hence all experts recommend putting your feet on the ground before making decisions, for example, consulting with a financial advisor and even seeking psychological support.
“In Spain everything changed in a tremendous way at the end of the eighties, until then there was greater security and certainty regarding your salary,” highlights the professor of Applied Economics, Laura de Pablos. “However, now there is employment, economic, social and political uncertainty, and we live in a global world in which what happens on the other side of the world can directly affect us.”
Thus, in this context there are two prototypical profiles: that of the elderly who saves for the sake of saving, without having any need, and that of the one who saves because they need it. According to the economist, these latter are usually people without two pensions at home, possibly without a house they own or with children dependent on them. However, De Pablos warns that “saving for the sake of saving, exclusively, is not economically profitable, unless you are a good investor and, thereby, cover your back.” And on the contrary, he affirms that for the elderly who have the income of two pensions and an average wealth there is currently no real risk.
For his part, Mansukhani formulates an interesting proposal: «Some type of structure would have to be created to offer the elderly education for leisure, as well as psychological and financial education, either in groups or with individual attention for people in a more complicated situation.»
For now, Luis and Marta have contented themselves with subscribing to concerts at the National Auditorium in Madrid and barely spend any money on travel. «In the seven years I’ve been retired, we’ve only been to Rome for one weekend, and I’m not complaining; we don’t want to touch the apartment we live in for my children to inherit, and neither does the apartment in Galicia.»
And Luis concludes, with a mixture of determination and resignation: «We are afraid to spend the rest of the money, we go out, but we try to save some of it; furthermore, over the years, we no longer feel like going to Egypt so much, we go from time to time to the apartment on the beach, and that’s it.» It is the decision of those who believe they have made the right decision. The one that Camilo, for example, was always clear about.
Susana Pérez de Pablos
