5 Strategies To Regain Your Wealth If You Overspent in the Beginning of Retirement
Written by
Dawn Allcot
Edited by
Levi Leidy
Commitment to Our Readers
GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.
20 Years
Helping You Live Richer
Reviewed
by Experts
Trusted by
Millions of Readers
Nearly two-thirds (64%) of Americans, including 70% of Gen Xers, fear running out of money during retirement. High inflation, Social Security shortfalls and high taxes rank as the three biggest causes of this fear, according to a new study from Allianz Life.
In the study, more than 60% of baby boomers admitted they fear running out of money. Since many boomers have already retired, this can make them feel as if they have no recourse this late in the game.
Fortunately, even if you’ve overspent in the beginning of retirement, you have several options to rebuild your wealth, according to experts.
“If you find yourself going through your retirement savings more quickly than you had anticipated, then you need to try to boost what you have saved,” said Melanie Musson of Clearsurance.
Acknowledging that every strategy may not be a fit for every retiree, Musson said it’s important to consider all options, since running out of money could mean a serious lifestyle change. Musson and other experts shared their best strategies.
Explore Entrepreneurship
Both Musson and D’Andre Clayton, co-founder of Clayton Financial Solutions in Greensboro, North Carolina, urged retirees to consider starting a consulting business. Musson observed that getting a job to earn money is one of the more obvious ways to boost your retirement income.
For professionals in a position to do so, consulting allows you to set your own hours and charge what the market will bear for your services. “That’s a way you can still enjoy retirement but earn money to boost your assets so that you can continue to live your retirement years with the same lifestyle,” Musson said.
“The quickest and most consistent profit margin is doing things you have an extensive degree of experience in,” Clayton agreed, saying retirees may want to take some time and consider if entrepreneurship is the right path.
Learn More: I Asked ChatGPT What Trump’s Big Beautiful Bill Means for Retirees’ Taxes: Here’s What It Said
Reposition Investments for Cash Flow
If you’re running low on cash in retirement, the answer could lie in your portfolio. “Reposition investments for cash flow, not growth,” Clayton recommended.
He suggested considering dividend-paying stocks or annuities. “Annuities tend to easily provide the ability to guarantee 7% withdrawals with no risk of capital or running out of money,” he said.
Tap Into Your Home’s Equity
“I would say a holistic view of using the home’s equity is possibly the most misunderstood concept there is,” Clayton said.
If you live in a region with high home values and you have significant equity invested in your home, there are multiple ways you can use this equity. Clayton said that reverse mortgages or a first-lien home equity line of credit (HELOC) can help with income drag. “Folks need to be coached on how this works,” he said.
Another option, Musson pointed out, is to sell your house. “This is not going to work everywhere or in every situation,” she said. “But if you live somewhere that the cost of housing is high and you have a lot of equity in your house, you can move somewhere that home values are lower and get an instant boost.”
Sell Collections
Likewise, if you have illiquid assets that aren’t contributing to your lifestyle or well-being, such as fine art, jewelry or a coin collection, consider selling them.
“If it looks like you’re not going to be able to sustain your lifestyle, you may need to sell some of those assets,” Musson said. “They’re not going to help you if they’re just sitting in your house.”
Reduce Spending
“Getting spending under control is always the first step in turning around financial issues,” said Robert Persichitte, CPA, CFP, CFE, affiliate professor at Metropolitan State University of Denver. However, don’t feel as if you have to sacrifice everything in your retirement to stretch your dollars. “Before saying you’ll cut your monthly budget in half, drop it by 10% and see what that feels like,” he said.
In fact, don’t make any dramatic changes without careful consideration. If you can, Persichitte said, “Test drive any major changes.”
While selling your home is a decision you can’t take back, you can launch a side business on a small scale, diversify some of your portfolio or sell a portion of your collection without much risk.
It may come down to making uncomfortable choices now or struggling later, so the key is to set modest goals and stick to them. “Whether you got behind through a lifetime of overspending or one big mistake, you’ll need a long-term plan to fix it,” Persichitte said.
More From GOBankingRates
