Why Money Feels Harder at Every Stage of Life (Behavioral Finance Explained)

Why do smart, responsible people still feel anxious about money even when they are doing everything right?

In this video, we break down behavioral finance research that explains how saving, investing, and spending behaviors change across every stage of life, and why financial strategies that work at one age often stop working over time.

Using Federal Reserve Survey of Consumer Finances data, research from Vanguard, Morningstar, RAND, and the Health and Retirement Study, along with insights from behavioral economists like David Laibson, Daniel Kahneman, and David Blanchett, we explore how money decisions are shaped far more by psychology and life stage than by intelligence or math.

You will learn why money feels fragile in your 20s, why optimization anxiety peaks in midlife, why retirement decisions feel irreversible, and why many retirees underspend despite having enough.

This video covers the psychology of money, behavioral finance mistakes, retirement planning mindset shifts, risk tolerance by age, income versus assets in retirement, and why one financial strategy cannot work for your whole life.

If you have ever wondered why money feels harder over time, this video explains why and what to do differently.

00:00 Intro: How Retirement Decisions Change Over a Lifetime
00:50 Stage 1: Early Adulthood (20s–Early 30s) Building the Foundation
04:23 Why Early Financial Mistakes Rarely Ruin Retirement
06:22 Stage 2: Midlife Accumulation (Mid-30s–50s) Peak Saving Years
07:27 Loss Aversion Takes Over in Midlife
10:51 Stage 3: Pre-Retirement (Late 50s–Early 70s) The Danger Zone
12:00 Sequence of Returns Risk Anxiety Peaks
12:37 The Hidden Retirement Problem: Chronic Underspending
14:09 What Retirement Research Really Says About Income
15:30 Stage 4: Later Retirement (Mid-70s+) Spending Confidence Shifts
18:06 The Three Biggest Lifetime Financial Shifts (Data-Backed)
18:16 Accumulation to Decumulation: The Hardest Transition
18:55 Why Risk Tolerance Is Emotional Not Linear
19:29 Why Feeling Safe Often Conflicts With What Actually Works
20:43 Bloopers

Sources:

Empower: https://www.empower.com/the-currency/money/average-portfolio-mix-by-investor-age

RAND: https://www.rand.org/pubs/research_reports/RRA2355-1.html

Protected Income:
https://www.protectedincome.org/wp-content/uploads/2025/03/RP-30_BlanchettFinke_v3.pdf

Harvard Library: https://dash.harvard.edu/entities/publication/73120378-8460-6bd4-e053-0100007fdf3b

Vanguard: https://workplace.vanguard.com/insights-and-research/report/how-america-saves-2025.html?cmpgn=IIG:TL:HAS:HAS25:SRCH:PS:XX:TL:GG:Known:Phrase:TLEAD:20250624:BD:NONE:RTG:KW:AmericaSavesReport&gclsrc=aw.ds&gad_source=1&gad_campaignid=22698817639&gbraid=0AAAAADyd_RXVsuOOZrNSdn8kV_lC5NsJ8&gclid=CjwKCAiAjojLBhAlEiwAcjhrDqKDdFRj7U_vNzFb4ATQnO0J9BCKtvAz_NM3-Fh04zkZbsxfwLaX-xoC48YQAvD_BwE

Morningstar: https://www.morningstar.com/business/insights/research/the-state-of-retirement-income?gad_source=1&utm_id=n&utm_term=retirement+portfolio&gad_campaignid=23329984011&gclid=CjwKCAiAjojLBhAlEiwAcjhrDlgAd6btUzK7KX2XpUmuGwVUDWa6hi7lx-9LpTLTGcYlzzoBgFQHTRoC7KQQAvD_BwE&utm_campaign=res_apac_n_n_en_2512_tf_nb_n_rgsnbstateofretirementus&utm_medium=cpc&gbraid=0AAAAACr_AGnsGZcQGjD_CILqjtw1p50NJ&utm_content=engine:google|campaignid:23329984011|adid:787071742473&utm_source=google

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Disclaimer: Please note that this video is made for entertainment purposes only and not to be taken as financial advice. Always make sure to do your own research.

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