Save for retirement. American workers hear this piece of advice countless times over the course of their careers. After all, it’s important.

Running out of money in retirement is a real risk for older adults. According to a 2018 study by the New School, roughly 40 percent of Americans who are considered middle class based on income will fall into poverty or near poverty by the time they reach retirement.

But for consistent savers who are fortunate enough to achieve adequate savings and financial independence, it’s often difficult to shift priorities and start spending money in retirement.

“Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life” is the latest book by Barbara O’Neill, a certified financial planner and accredited financial counselor who worked as a professor at Rutgers University for 41 years.

O’Neill experienced the difficult transition from accumulation mode to spending mode firsthand after leaving her full-time job at the university in 2019. She made the transition easier by embracing her encore career as CEO and owner of Money Talk, an online educational resource where she writes, speaks about and reviews personal finance content.

“Flipping a Switch” offers a unique perspective on the post-retirement landscape for people who find it challenging to let go of the professional careers and wealth they worked for decades to achieve.

While some switches, such as taking required minimum distributions from retirement accounts or navigating Medicare, are mandatory, others are more personal and psychological.

O’Neill sat down with RetireGuide to discuss her experiences and shed light on how older Americans can be healthy, wealthy and happy in later life.

Q: What inspired you to write this book?
A: As I was preparing for this stage of my life, I found some financial books that dealt with how to prepare for retirement, and other books that dealt with the “what are you going to do with the rest of your life” lifestyle aspect. But I couldn’t really find one that discussed both.

It became personal, in that aspect. I spent my entire career as a financial educator who encouraged people to save. Obviously, I walked my own talk. But then I realized I needed to flip this switch. How do I do that?

I come from a research background and was looking for information for myself. It felt normal and natural to take on this topic and share what I learned with others who are going through this.

Q: What are some of the psychological or personal factors that make it difficult for frugal savers to let go of their money in later life?

A: It’s really hard to see that declining balance. Psychologically, it feels like a loss. Taking money out of investment accounts and “eating your capital,” so to speak, can be very hard for people.

In the book, I recommend some strategies that can make that process easier, such as setting up automatic withdrawals so that you don’t have to physically do something that keeps reminding you that your account balance is going down.

Part of it is also habit. If you’ve been in the habit of saving for 40 or 50 years, it’s hard to suddenly go in reverse. There’s a hypothesis that you get used to a certain lifestyle, so changing your spending habits is hard.

If you’ve always been a frugal person who clipped coupons and looked for sales, then you suddenly have the capacity to spend at a higher level, it can feel really uncomfortable and foreign.

You can almost feel like a hypocrite. If you’ve been going around for 40 years telling people how frugal you are, then you’re no longer living that lifestyle, it’s a big change.

You almost have to trick your mind into being less frugal — because you don’t need to be anymore.

I even find myself doing that now. For example, I used to be so focused on a shopping list when I went to the supermarket, and I always stayed within a certain fixed amount.

But now, I don’t really do that anymore. I’ve given myself permission by creating an allowance for “extras” on the list, with a certain amount next to it. That way I don’t feel guilty because I’ve budgeted in the extras.

Q: Do you think the COVID-19 pandemic impacted how these frugal savers view spending in retirement?

A: Yes. After moving to a 55-plus community in Florida at the beginning of the pandemic, I spoke with some neighbors who say COVID gave them a new lens on all this.

“We’ve lost two good years of our life,” they told me. It’s also provided a glimpse into the fact that nothing is guaranteed. A lot of stability has gone away, and people feel more vulnerable.

So, in a way, that’s freed some people to start thinking, “OK, well if I’m only going to take one cruise in retirement, maybe I should get the estate room or make an upgrade.”

I think the pandemic has caused some people to consider living life to the fullest and using the resources they’ve saved up over time. Because it made us all realize we may not have as much time as we thought.

Q: In the book, you write that if someone doesn’t spend their own money in retirement, someone else will. What do you mean by that?

A: There’s only three places money can go after you die: People, charities or the government. So, it’s important to start thinking about who those people and charities are and doing proper estate planning now.

Will the people you leave your money to honor the hard work it took to accumulate your money? Or will they go on a wild spending spree in Vegas?

Those are the things you want to consider. If you don’t spend all the money you accumulated, who will it go to?

Q: You discuss developing a daily time schedule after leaving a full-time job. How can staying busy and productive make retirement more fulfilling?

A: There’s the “big rocks” analogy I refer to in the book. It’s the idea that you put the big rocks in your jar first, then fill sand around it. Otherwise, if you try to put the sand in first and then the big rocks, everything won’t fit.

I think everyone needs some big rocks. But it’s different for everyone. For me, it’s self-employment. For my husband, it’s golf. He does it almost every day and loves the challenge of it.

Some people may want to go back to their former employer, but on a part-time basis. Others may want to take on a completely different job or turn a hobby into a job.

It may be all about volunteerism for some people. For others, it may be caregiving, either for grandchildren or an older parent.

Socialization is another big aspect, especially as we get older. Physical activity is something else you can devote more time to in retirement because your schedule is more flexible.

The bottom line is everyone should have one or more big rocks that take up the bulk of their day. If you have something to replace the time you used to spend working, then you’ll still have roughly the same amount of free time you had when you were working. You just divide it up differently. This way the transition feels more normal and natural.

Q: What advice would you give someone who isn’t sure what their passion or “big rock” should be in retirement?

A: You have to think about what makes you happy. And what didn’t make you happy when you were working.

For many people, commuting is a huge source of stress because it’s out of your control and sucks up a lot of time.

Think about all the things you don’t want to do — and stop doing them. Then think about all the things that make you happy. If you’re married, you want to think about joint things that make both of you happy. But there’s no problem in pursuing individual happiness when you’re married in retirement.

The important thing is finding something you’re passionate about and devoting time to it.