Retirement security is a concern for many older Americans and outliving savings is often their biggest fear.

According to recent research from Cerulli Associates, 58% of savers and retirees worry about running out of money.

However, certified financial planner Justin Fitzpatrick, co-founder of Income Lab, reassures that “retirement spending is not pass-fail.”

Your retirement spending isn’t static, meaning there’s room for adjustments over time, depending on your needs and goals, he said at a financial planning conference.

Transitioning from a steady paycheck to retirement with income uncertainty can be unsettling, leading to a feeling of paralysis, Fitzpatrick explained.

However, there are important factors that retirees need to consider.

Financial advisors often use “probability of success” scores to assess retirement plans based on a Monte Carlo simulation.

Fitzpatrick, on the other hand, sees retirement expenses as a series of small liabilities that can be flexible.

For example, retirees can choose to go to a brewpub instead of a steakhouse or skip a vacation to adjust their spending.

While these adjustments may not be preferred in advance, they are different from total financial ruin, Fitzpatrick emphasized.

He believes that total financial ruin is “almost impossible” because individual liabilities are often small and spending can be adjusted gradually over time.

Fitzpatrick recommends utilizing “risk-based guardrails,” predefined guidelines, to modify retirement spending.

This strategy involves using planning software and considering factors such as longevity, future cash flows, and income changes.

By finding a reasonable spending level, retirees can monitor the risk of doing nothing and make adjustments accordingly.

Regularly updating the plan and seeking advice from a financial advisor can provide guidance during the retirement journey.