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Saving for retirement is essential to make the most of your third act, but what happens if you run out of money in retirement despite your best efforts? The trick is knowing how much you need for a comfortable retirement so you can start preparing and ensure your savings last.

Read on to learn how to avoid running out of money in retirement.

The number one retirement concern: running out of money

Running out of money in retirement is a serious fear many Americans face when planning for retirement. According to Radhika Duggal, chief marketing officer for an online shopping site and adjunct professor of consumer behavior at a university in New York, this concern comes down to the numbers. Duggal points to , which indicates that while 62% of younger Americans (ages 18 to 29) have money saved for retirement, only 30% percent feel their savings plan is on track to enable their future plans. In addition, of those surveyed, 25% have no retirement savings at all. 鈥淯nfortunately, for many, folks simply don鈥檛 have enough saved,鈥� Duggal says.

The difference between 鈥榬unning low鈥� and 鈥榬unning out’

鈥淩unning low鈥� and 鈥渞unning out鈥� of retirement savings represent distinct stages of financial insecurity for retirees. Running low implies a dwindling balance that warrants careful budgeting and potential lifestyle adjustments to make funds last. In contrast, running out signifies a depletion of funds and the potential inability to cover essential expenses.

Proper planning, investment diversification, and regular monitoring can help mitigate both scenarios. The former allows adjustments to be made, while the latter might require drastic changes. Adequate retirement savings, well-managed withdrawals, and potential income sources like Social Security are critical to avoiding running out of money and maintaining a comfortable retirement lifestyle.

鈥淩unning low is having a little money left in your savings, but only enough to get you to a certain point or time frame,鈥� Duggal says. 鈥淩unning out means entirely maxing out your savings to the point that you need to refill your source of income as soon as possible.鈥�

Calculate your retirement costs

To help guide your retirement savings efforts, do the math: How much money will you need to have a secure retirement and to meet your personal goals, such as traveling or renovating your home?

鈥淎ccording to experts, there are four phases of retirement, and it鈥檚 important to calculate costs and budget appropriately for each phase individually,鈥� Duggal says. She recommends asking yourself the following questions based on what stage of life you are in.

• Pre-retirement (ages 50-61)
  • How much money, if any, will you receive from a pension or Social Security?
  • Do you have any assets in retirement plans? If so, how much will you withdraw monthly?
  • Have you paid off your mortgage? If not, how long do you have left on it? 
• Early retirement (ages 62-69)
  • Assuming you don鈥檛 have a pension, what income will you have coming in monthly?
  • Will you still have employer-sponsored health insurance?
• Middle retirement (ages 70-79)
  • What are the pros and cons of life insurance?
  • What savings programs can you use to stretch your dollars further?
• Late retirement (ages 80 and up)
  • How can you best manage your healthcare expenses? Can you qualify for a Medicare Savings Program?
  • Will you want to change your living situation (e.g., would you prefer to live in an assisted living facility)? If so, how do those expenses factor into your plan?

Strategies to prevent running out of money in retirement

If you worry about what happens if you run out of money in retirement, you need clear strategies. Here are some best practices to employ as you work on your retirement planning:

Create a retirement budget

Duggal also recommends having a retirement budget in place. 鈥淢aximizing your money during retirement starts with having a retirement budget in place well before the time to retire comes,鈥� Duggal says. 鈥淭o do this, take your current budget and project your expenses during retirement.鈥� She notes that what really changes during retirement is income and recommends calculating all of the various income streams you might have during this time (pension, 401(k), 403(b), etc.).

Making a retirement budget can also help ensure you don鈥檛 accidentally overspend and run through your retirement savings too quickly. Duggal advises that another way to avoid running out of money in retirement is to ensure you have diversified income streams during this time鈥� some that are impacted by market volatility (e.g., stocks) and some that may be more predictable (e.g., Social Security or an IRA savings account).

Maximize your 401(k) contributions from day one

It鈥檚 never too early to start saving for retirement (or too late to start catching up), and there are steps you can take to maximize your head start. 鈥淚f your employer offers a 401(k) contribution and match, contribute enough to get the match and try to max it out,鈥� Duggal says. 鈥淎 401(k) match is essentially free retirement funds鈥攄on鈥檛 let that money slip away.鈥�

You can also contribute to a Roth IRA, which gives you tax-free growth on your investment earnings. And establishing good financial habits early鈥攍ike paying off your credit card every month and living within your means鈥攃an also set you on the right path long before retirement nears. 

File for a retirement savings credit

According to Duggal (and ), couples who are married and filing jointly with an adjusted gross income of $79,000 or less in 2025 and single filers with an income of $39,500 or less who contribute to a qualified retirement plan may be eligible for a tax credit to help boost their savings.

Ways to increase your retirement income

If you鈥檙e worried about running out of money during retirement, there are ways to increase your retirement income.

• Delayed claiming of Social Security: Opting to delay claiming Social Security benefits beyond the full retirement age (such as at age 70, the age when benefit increases stop) can lead to significantly increased monthly payments.
• Part-time work or side hustles: Engaging in part-time work or pursuing side gigs during retirement can help supplement your retirement income. This approach leverages your skills and interests to generate additional funds鈥攁nd can keep your mind and body active during retirement.
• Continued portfolio diversification: Asset allocation鈥攕preading out your investments over a mix of stocks, bonds, and other assets, based on your risk tolerance and the amount of time you have left until retirement鈥攃an enhance your retirement income over time.
• Opening a CD: If you鈥檙e looking for a guaranteed source of income during retirement, invest the savings you don鈥檛 need for a while into a certificate of deposit (CD) and earn a guaranteed amount of interest.
• Borrowing against home equity: The second mortgage strategy requires careful consideration, as it comes with risks鈥攕uch as being unable to hand down the family home to an heir鈥攁nd fees.
• Considering a part-time job: This can help generate more income and keep your mind and body active. This isn鈥檛 always an option, however, depending on your health, age, and other commitments.

Plan ahead to avoid retirement savings depletion

There are many unknowns about the future: your health, the market, and macroeconomic conditions, for starters. To help avoid an unpleasant surprise in retirement, control what you can in terms of lifestyle and investment management. 

If you have retirement savings and don鈥檛 need immediate access to them, opening a CD is a great way to build up your assets. Learn more about pp电子官网^庐 IRA Certificates of Deposit today.

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