Most Retirees Have No Plan If Savings Run Out: What You Should Do Now
Written by
Gabrielle Olya
Edited by
Molly Sullivan
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Running out of money in retirement is a nightmare scenario, but new data shows that fear may become a reality for some retirees. According to a Clever Real Estate survey of current retirees, over one-quarter (29%) have no retirement savings at all, and 45% are worried they’ll outlive their retirement savings.
“There are two factors primarily at play when it comes to retirees possibly outliving their savings,” said Nick Pisano, data writer for Clever Real Estate. “Almost half (46%) of American retirees say they have trouble paying some of their expenses. They’ve faced years of higher-than-average inflation and been forced to do it on fixed incomes and limited savings, as most working-age Americans have gotten raises to compensate for the increase in prices.”
Compounding the issue, 39% of retirees say they don’t stick to a strict budget, which can accelerate the pace at which savings disappear.
“It can be a difficult mindset shift to living on a fixed income for some retirees, but those who don’t monitor their spending can easily find themselves blowing through their savings at a far faster rate than anticipated,” Pisano said.
Alarmingly, the survey also found that 51% of retirees have no plan if their retirement savings run out, and 43% said they would prefer to die than have that happen. While the emotional weight of that fear is heavy, financial experts said the right planning can dramatically reduce the risk.
Here’s how retirees can strengthen their finances and protect themselves long term.
Build a Realistic Retirement Spending Plan
Avoiding a savings shortfall starts with understanding your full financial picture.
“One of the most important steps retirees can take is to build a clear, realistic picture of their expected expenses and income sources,” said Adam Olson, certified financial planner at Mutual of Omaha. “That means accounting for things beyond essentials like housing and food, but also healthcare, long-term care, inflation and unexpected costs that tend to rise later in life.”
Regularly updating a retirement budget helps retirees understand how much they can safely spend and where they may need to adjust to stay on track.
Account for Rising Costs and Inflation
Retirees should plan for the reality that expenses often rise over time.
“While no one wants to imagine running out of money in retirement, the right planning structure can dramatically reduce that risk,” Olson said.
Building inflation assumptions into your plan — and revisiting them annually — helps ensure savings stretch further over time.
Diversify Your Income To Reduce Risk
Developing a diversified income strategy rather than relying on a single source, such as Social Security or withdrawals from savings alone, is vital.
“Reviewing withdrawal rates, timing Social Security benefits and stress-testing a plan for market downturns or longer lifespans can significantly improve retiree confidence,” Olson said. “After essential expenses are covered, retirees still need a strategy for discretionary spending on travel, hobbies, gifting and lifestyle choices that make retirement enjoyable.”
Olson noted that a time-based investment approach helps retirees avoid selling investments at the wrong time while aligning their portfolios with real-world spending patterns.
Create a Backup Plan in Case Savings Run Low
Even the best plans can be disrupted by health needs, inflation shocks or market declines. That’s why retirees should know in advance what their options are if savings start to dwindle. If retirees find that they have run out, or are at risk of running out of savings, the first step is to assess their remaining income sources and available benefits.
“Social Security becomes a critical foundation, and for some, delaying benefits or coordinating spousal benefits earlier on can make a meaningful difference,” Olson said.
Other options may include part-time work, downsizing housing to reduce expenses or tapping home equity to create cash flow.
“However, the real opportunity lies in planning before retirees reach this stage,” Olson said.
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