Afraid of Going Broke in Retirement? 9 Tips To Help Make Your Money Last

You've spent decades saving and planning, but when retirement finally arrives, that long-anticipated freedom can come with an unexpected fear: what if you outlive your money? It's a common concern, especially as people live longer and face unpredictable expenses.

Below are practical, research-backed ways to help you make the right money moves and reduce the anxiety that can come with managing money in retirement.

Understand the longevity risk

Many retirees underestimate just how long their money needs to last. Financial planners often recommend planning for at least 25 to 30 years of withdrawals, and possibly longer, depending on your health and family history. It's better to assume you'll live to age 90 than to risk running out of funds too soon. The truth is, the biggest financial threat in retirement isn't failing to leave an inheritance. It's not having enough income to support yourself when you need it most.

Use a thoughtful withdrawal strategy

The well-known "4% rule" is often cited as a safe withdrawal rate, meaning you'd take out 4% of your savings in the first year and adjust for inflation after that. But experts stress that this is only a guideline, not a guarantee. Markets fluctuate, and what works for one person might not suit another. A more flexible approach may help. For instance, you could withdraw less during down market years and allow yourself a little more when investment returns are strong. Some retirees even divide their portfolio into two buckets: one for essential income, using safer investments or annuities, and another for long-term growth. That way, you can ride out market dips without jeopardizing your basic needs.

Build a multi-layered income floor

Another way to reduce financial stress is to make sure your basic living expenses (like housing, food, and health care) are covered by steady income sources. Social Security, pensions, or annuities can help provide that foundation. With your essentials covered, you'll have more flexibility to adjust discretionary spending depending on how markets perform. This "income floor" approach can make your retirement plan more resilient and less dependent on daily market swings.

Control spending early

It's easy to overspend in the first few years of retirement. After all, you finally have the time to travel or spoil the grandkids. But financial planners warn that spending too much early on can increase your risk of running out of money later. It's helpful to set a few guardrails, like limiting annual spending increases or establishing a flexible budget that adapts to market performance. Even small course corrections early on can help your savings last significantly longer.

Stay invested for growth

While it's natural to become more cautious as you age, moving too heavily into cash or ultra-safe investments can backfire. Inflation steadily eats away at purchasing power, and over a 20- or 30-year retirement, that erosion can be significant. Keeping a portion of your portfolio in growth-oriented assets can help offset that risk. The goal isn't to chase high returns, but to maintain balance. Too much risk can lead to losses, but too little can make your money quietly shrink in real terms.

Plan for health and long-term care costs

Health care is one of retirement's most unpredictable (and most underestimated) expenses. Medicare helps, but it doesn't cover everything, especially long-term care. Setting aside dedicated funds or exploring insurance options can help shield your savings from major medical shocks. Even a modest health savings reserve or hybrid long-term care policy could make a major difference if health challenges arise later in life.

Revisit and adjust regularly

Your retirement plan shouldn't be a one-and-done document. Each year, take time to revisit your spending, investment performance, and any changes to tax laws or inflation rates. Life events can quickly shift your financial outlook. Being willing to make small adjustments, rather than waiting for a crisis, can keep your plan on track and your confidence intact.

Consider delaying Social Security

Delaying Social Security benefits can increase your monthly payments, which could be a critical buffer if you live longer than expected. However, this makes the most sense when you expect to live for a decade or more past retirement. Otherwise, you may wait too long to see a real payout, even if you're receiving a larger amount of money each month. Consider your current health and the lifespan of your family members to get some idea of how many years you can expect your retirement to last.

Minimize high-interest debt

High-interest debt often eats away at your money faster than investing can make you money. Carrying high-interest debt into retirement can quickly erode your savings. Paying off credit cards, personal loans, or other expensive debt before retiring can free up cash flow and reduce stress. In many cases, it makes sense to use your retirement accounts to slowly pay down high-interest debt, though take a good look at the tax implications before doing so.

Bottom line

Retirement can feel uncertain, but taking proactive steps can help your savings last longer. Regularly revisiting your retirement plan and adjusting spending or investments can reduce stress and give you more control over your financial future.

A recent survey found that nearly 60% of retirees left the workforce earlier than planned, often due to health issues or job loss. This underscores the importance of building a flexible retirement plan that accounts for unexpected changes. Taking time to check up on your retirement readiness today can help you see how your retirement savings stack up and identify areas where small adjustments could make a big difference.