Do you worry about running out of money in retirement? If so, you are certainly not alone.
Many wonder if their nest egg will be big enough to support decades of living without a paycheck. Fortunately, there are things you can do now to shore up your retirement savings.
So, whether you plan to retire early or want to work late into life, consider the following strategies to help you avoid running out of money during retirement.
Eliminate your late tax debt
Each year, the IRS forgives millions in unpaid taxes. If you have more than $10,000 in tax debt, or have 3+ years of unfiled taxes, you could get forgiveness too. You might be eligible to lower the amount you owe, or eliminate your tax debt completely.
Easy Tax Relief could help you lower or get out of your tax debt for good. They’re well respected in the industry and have been recognized for their ethical standards when dealing with tax debt. While most tax companies just put you on a payment plan and file your taxes for you, Easy Tax Relief talks to the IRS directly. They can help you pay off your tax debt faster while potentially reducing what you owe.
Important: Not everyone will qualify. To take advantage of this special program you must owe more than $10,000 in past-due taxes.
Fill out this form to get started
Meet with a financial advisor to double check your plan
![senior couple getting advice from their financial consultant](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/senior_couple_getting_advice_from_their_financial_consultant.jpg)
Many people are not prepared for retirement. Half of Americans have not taken steps to determine how much money they need to save for their golden years, according to the U.S. Department of Labor.
To help discover how much you need and whether you’re truly on the right path, consider meeting with a financial advisor to see if you need to build your wealth further.
This type of professional can evaluate your current plan and suggest options for helping you reach important money goals.
Save more than you think you'll need
![senior couple saving money](https://cdn.financebuzz.com/filters:quality(75)/images/2023/02/20/senior_couple_saving_money.jpg)
How much do you need to save for retirement? Whatever you think the number is, it can be wise to aim to save even more.
Many experts suggest that people will need 70% to 90% of their pre-retirement income to maintain their standard of living in retirement, according to the Department of Labor. However, the right number depends on your specific wants and needs.
So, what type of lifestyle do you want during retirement? If you are unsure — or even if you are not — saving more can provide a cushion that will reduce the risk of running out of money in retirement.
Note the expenses that likely will drop in retirement
![couple doing online banking in home](https://cdn.financebuzz.com/filters:quality(75)/images/2023/02/15/couple_doing_online_banking_in_home.jpg)
For some people, expenses will drop in retirement. Will you pay off the mortgage before retiring? If so, that will leave more room in your budget.
Will you have adult children living at home, or will everyone have likely moved out? If it’s the latter, you might be able to downsize to a smaller home and save money.
Earn $200 cash rewards bonus with this incredible card
There's a credit card that's making waves with its amazing bonus and benefits. The Wells Fargo Active Cash® Card(Rates and fees) has no annual fee and you can earn $200 after spending $500 in purchases in the first 3 months.
The Active Cash Card puts cash back into your wallet. Cardholders can earn unlimited 2% cash rewards on purchases — easy! That's one of the best cash rewards options available.
This card also offers an intro APR of 0% for 12 months from account opening on purchases and qualifying balance transfers (then 20.24%, 25.24%, or 29.99% Variable). Which is great for someone who wants a break from high interest rates, while still earning rewards.
The best part? There's no annual fee.
Bolster your retirement accounts
![pension retirement concept](https://cdn.financebuzz.com/filters:quality(75)/images/2022/12/19/pension_retirement_concept.jpg)
Contributing more to your retirement accounts might help increase your odds of building a nest egg that can carry you through retirement.
There are no guarantees, of course, but historically, saving and investing money has paid off for many people.
Also, the more you contribute to employer-sponsored or other tax-deferred accounts, the less you will owe to the IRS, at least in the short term.
Look into annuities
![financial adviser showing terms of contract](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/financial_adviser_showing_terms_of_contract.jpg)
Annuities are one tool some people use to avoid running out of money during retirement.
With an annuity, you give up a lump sum of money or make a series of payments in exchange for a monthly payment from an annuity company for the rest of your life.
There are many different varieties of annuities, and this type of product has a lot of pros and cons. So, think carefully before purchasing an annuity.
Eliminate highly expensive debt before you retire
![senior couple checking and calculating financial billing](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/senior_couple_checking_and_calculating_financial_billing.jpg)
The longer debt sits around, the more expensive it gets. If you pay off debt quickly — ideally, prior to retirement — it not only saves you money in interest costs but also eventually frees up money in your budget.
If you’re struggling to get debt under control, consider working with an expert, such as a nonprofit debt counselor, to craft a debt management strategy. Many times, prioritizing debt elimination means more money in your pocket to put toward retirement.
Be sure you have a plan for health care costs
![senior woman patient and nurse consulting during a checkup](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/senior_woman_patient_and_nurse_consulting_during_a_checkup.jpg)
Medical costs can really damage a budget during retirement, and it’s no secret that as people age, their health often declines. So, make sure to prepare for these health care costs well before you stop working.
Although most people have Medicare in retirement, the program does not cover all medical costs. So, it can be helpful to tuck away a fair amount of money for health care needs.
Also, don’t forget to plan for the possibility of long-term care. Medicare does not cover the cost of long-term care.
Put good spending habits in place now
![determining the monthly budget](https://cdn.financebuzz.com/filters:quality(75)/images/2022/06/06/determine_the_monthly_budget_for_our_home.jpg)
Even if you are decades away from retirement, the sooner you create solid spending habits, the better off you will likely be in the future.
This might include crafting a budget and sticking to it. Budgets shouldn’t feel limiting, but rather supportive. An accurate budget helps you track expenses so you can stay on track with financial goals.
And remember, every time you purchase something you don’t really need, you have less money to devote to retirement savings.
Maintain a diversified portfolio
![woman calculating finance budget](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/woman_calculating_finance_budget.jpg)
Many experts recommend creating a diversified portfolio of investments. Although there is no surefire strategy that is always guaranteed to work, diversification often can help reduce some of the risks of investing by limiting your losses.
We’ve all been told not to “keep your eggs in one basket,” and diversification helps prevent your investments from becoming too concentrated in one area.
Remember that you might have to adjust these strategies over time. Once again, a financial advisor can help you boost your retirement bank account.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $12 per year with auto-renewal.
Bottom line
![senior couple hugging in the kitchen](https://cdn.financebuzz.com/filters:quality(75)/images/2023/03/03/senior_couple_hugging_in_the_kitchen.jpg)
Reducing costs and increasing savings strategies now might help you minimize the risk of running out of money in retirement.
Developing good financial habits can help boost your bank account so that you build a nest egg that has a better chance of carrying you through your golden years.
And if you need help, consider meeting with a financial advisor who can help you develop the right plan for saving and investing.
Lucrative, Flat-Rate Cash Rewards
FinanceBuzz writers and editors score cards based on a number of objective features as well as our expert editorial assessment. Our partners do not influence how we rate products.
Wells Fargo Active Cash® Card
Current Offer
$200 cash rewards bonus after spending $500 in purchases in the first 3 months
Annual Fee
$0
Rewards Rate
Earn unlimited 2% cash rewards on purchases
Benefits
- Low spend threshold for its welcome offer — $200 cash rewards bonus after spending $500 in purchases in the first 3 months
- Cell phone protection benefit (subject to a $25 deductible)
- Can redeem rewards at an ATM for literal cash
Drawbacks
- Foreign transaction fee of 3%
- No bonus categories
- Select “Apply Now” to take advantage of this specific offer and learn more about product features, terms and conditions.
- Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months.
- Earn unlimited 2% cash rewards on purchases.
- 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers. 20.24%, 25.24%, or 29.99% Variable APR thereafter; balance transfers made within 120 days qualify for the intro rate and fee of 3% then a BT fee of up to 5%, min: $5.
- $0 annual fee.
- No categories to track or remember and cash rewards don’t expire as long as your account remains open.
- Find tickets to top sports and entertainment events, book travel, make dinner reservations and more with your complimentary 24/7 Visa Signature® Concierge.
- Up to $600 of cell phone protection against damage or theft. Subject to a $25 deductible.