Here's What Can Happen if You Run Out of Money in Retirement

Running out of retirement funds after you’ve retired can change your golden years in these negative ways.
Updated May 2, 2024
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Whether you’re looking forward to post-work life in a few years or several decades, hold off on handing in your resignation until you know how to seriously boost the money in your bank account.

Retiring with just a little cash saved may feel good for a moment, but what happens when the funds run out only a few years into retired life? It could cause major issues for you and your loved ones.

So before you head off into retired life, think about some of these things that could happen if you haven’t saved enough in retirement accounts.

You’ll have to go back to work

nyul/Adobe Senior engineer in design work at architect studio

If you run out of money in retirement, you will need a way to make extra money. The best way to do that may be to get a job. That can be a tough decision to make if you’ve been retired for several years. But without a job or any sort of income, there will likely be no way to cover all monthly expenses.

Pro tip: Your Social Security check may cover some monthly costs, but it’s a good idea to sit down now and figure out how much you’ll be receiving each month. Delaying your retirement or waiting to file for Social Security could mean larger payments in the future.

You’ll drown in debt

Tinnakorn/Adobe Women are stressed due to work failures

If you don’t have enough money coming in during retirement, you could easily end up in debt. Try not to let this happen.

But if it does, immediately look for clever ways to crush your debt before the problem gets out of control.

You’ll burden your family

Zadvornov/Adobe  old woman counting money

Perhaps your children are grown with families of their own. If so, they likely are trying to save for college for your grandkids or hoping to pay down their own debt. The last thing you want to do is burden them with your own financial problems.

If you need their financial help, it could strain relationships and add to your adult kids’ emotional strain as they try to support their own households as well as yours.

You won’t be able to travel

Song_about_summer/Adobe couple on the beach

One thing many retirees like to do is travel. However, yearly vacations to the beach or to exciting international cities may be out of the question if you run low on funds.

In fact, depending on how bad your financial issues are, a trip to another state may even be a bit of a stretch.

You won’t retire in a community you want

shurkin_son/Adobe senior woman pensioner having depressed look

Retirement communities continue to spring up throughout the country, giving you options to retire on the beach or in a snowy wonderland. They include plenty of activities as well as amenities, including doctors on call and other services as you age.

But if you don’t have the funds needed to live in a community for retirees, you may be stuck living somewhere you don’t want to be.

You’ll have to downsize

nndanko/Adobe woman in a gray sweater collects clothes in a box

You may need to downsize if you don’t have enough cash on hand for retirement. Moving to an area with a lower cost of living can help you save on day-to-day expenses. Downsizing also can free up some of the equity in your current home so you can use it for everyday costs.

You’ll have unnecessary stress

Maha Heang 245789/Adobe Senior man is holding eyeglasses and rubbing his tired eyes

Financial stress can lead to physical health issues, especially if you are simply worried about how to pay for food and gas, utilities, and more.

You may even have to find ways to eliminate money stress, which can soar if you’re on a fixed income.

Your medical bills could pile up

Burlingham/Adobe A mature woman looking over medical bills

As we get older, we are more likely to have medical issues crop up. But you can’t depend on Medicare to cover everything you need.

There may be prescriptions that you have to pay for out of pocket, long-term care costs, or other issues that aren’t covered by Medicare. Remember to factor these costs into your budget before you retire so you’re not surprised when emergency costs come up.

It will be hard to stick to a budget

Astarot/Adobe man sitting in his home office with bills in hands

A budget can help if you’re trying to keep track of your money or rein in extra spending. But if you have little income coming in, it may be hard to figure out exactly which amounts of cash can be allocated to which places.

That could mean some tough decisions as you try to figure out where you can and cannot splurge in retirement.

You’ll have to let go of big-ticket items

twinsterphoto/Adobe Happy senior couple from behind looking at front of house

Did you dream of buying a fancy car or the boat you always wanted in retirement? You might have to let those fantasies go.

Instead, save the cost of buying and maintaining that big-ticket item and put the money into your retirement budget so you can better cover your monthly expenses.

You can’t invest properly

Maksym Yemelyanov/Adobe newspaper and direction sign with investment options

Younger investors may be able to take on riskier investments, but older workers are likely to be stuck in safer investments, especially if they have a modest budget to begin with.

If you don’t have extra funds, you may have to be more conservative with your investment decisions, leaving little room to take on risks as you protect yourself from market fluctuations.

Bottom line

Tanja Wilbertz/Adobe Oldtimer with old couple driving in retirement

Retirement can be an exciting time, but it can also be scary as you try to figure out how much money you’ll need to live a happy and healthy retired life.

It might be a good idea to sit down now and come up with a possible retirement budget so you have a better idea of what you may need each month in order to cover necessities like bills. Look for ways to supplement your Social Security income so you will have more breathing room in terms of covering daily expenses.

Once you have the necessities covered, you can start thinking about extras like vacations or big-ticket items.

Author Details

Jenny Cohen Jenny Cohen is a freelance writer who has covered a bit of everything, from finance to sports to her favorite TV shows. Her work has been featured in The Wall Street Journal, USA Today, and

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