10 Surprising Reasons You Won’t Run Out of Money in Retirement

The scariest part of retiring from work is the end of a regular paycheck. These tips may ease your mind about running out of money.

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Updated July 18, 2024
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It could be daunting trying to save money to retire stress-free. Perhaps you’ve sat down to calculate how much you'll need and got overwhelmed by all the things you have to consider.

Will you pay off your house or still have a mortgage? What about everyday expenses like groceries or utilities? And most importantly, have you saved enough, or are you going to run out of money?

Before you start to panic with your estimated retirement budget in front of you, here are a few things to consider that can set your mind at ease.

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Expenses are lower

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One of the great things about retiring is you don’t have to work anymore, which could reduce your daily expenses.

You might save money because you don’t have to pay for gas, coffee, or lunch at your office. You also may save cash by ditching the professional wardrobe you spent money on each year.

Driving less might also help you save money on car insurance, so check with your insurance provider about a potential reduction in your insurance bill.

Social Security is there for you

Jon Anders Wiken/Adobe US social security cards and dollar bills

There might be doomsday news out there about whether Social Security will exist when you retire or if you’ll be able to collect it. But for now, Social Security isn’t going anywhere, so remember to factor that into your budget.

While Social Security alone likely won't be enough, it will provide a nice pad. Use the calculator on the Social Security Administration’s website to estimate your monthly payments.

Downsizing may lower your cost of living

Iriana Shiyan/Adobe small craftsman one-story exterior with wood siding

Most likely when you retire, you'll also be an empty-nester, with your children leaving home to start their own lives. Perhaps you want to get a smaller house with less upkeep as you get older.

Downsizing your home could give you a windfall from the sale of your house, lower your monthly utility bills, and reduce your property taxes.

Pro tip: Paying your mortgage may have increased your equity in your home. Check with a financial professional to see if there’s a way to unlock some of that equity when you need it.

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More time for DIY projects

panyajampatong/Adobe carpenter working on woodcraft using a hand saw

Your budget may have an extra line for dining out or home repairs. But with more time at home, consider taking on tasks you may have paid others to do when you were still working.

Think about cooking more meals in your kitchen or trying to repair things yourself now that you have extra time in retirement to devote to home projects.

You’ve invested enough for retirement

Jerry Sliwowski/Adobe Retirement Planning

You may be surprised to find that you have invested enough money for retirement already.

As you approach retirement, sit down with your current budget as well as your estimated retirement budget to adjust your plans for saving now as well as spending later.

Adjusting your savings now after a new job or promotion could change your investment plans for the better.

Your kids are older

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As you get older, so do your kids. They may live with you after college or be out on their own, but they most likely will have a job, which could cover some expenses you would’ve handled when they were younger.

But keep in mind that helping them is not the same as paying for high-ticket items like a car or covering their student loans.

Remember to pay yourself and start investing in your retirement and savings before you pay expenses for your adult children.

More time to optimize your investments

William W. Potter/Adobe boxes of financial products on a laptop

Being retired means you may have more time to devote to your investment portfolio.

Perhaps you could learn how to rebalance your assets on a regular basis, or you could find a financial planner to help you (if you haven’t already).

You may find it's best to put money from your portfolio into more diverse investments. And you can watch your portfolio more often to see what works and what doesn’t work to make your investments work for you.

Long-term care insurance

wladimir1804/Adobe medical concept of long term care insurance

One of the most expensive things you may have to pay for when you’re retired is long-term care, and it could drain your savings. It might be a good idea to start looking into plans now if you haven’t already.

The earlier you take out a policy, the lower your premium. Long-term care insurance may cover any expenses for nursing or medical care as you get older.

Adding to your portfolio

Maksym Yemelyanov/Adobe newspaper and direction sign with investment options

There’s no age to stop investing. Even if you’re not earning a regular paycheck, you should continue to invest.

Consider reinvesting any earnings you have as you get older so you can delay touching your principal.

Stocks, bonds, or mutual funds may generate enough income each year to pay your daily expenses.

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More time for a side hustle

Prostock-studio/Adobe taking notes in office

There are plenty of ways to make extra money with a side hustle, especially if it’s a hobby you enjoy or a new business you’ve always dreamed of starting.

Retiring means you have more free time to finally pursue those other plans and make some money while enjoying your new adventure.

Bottom line

gustavofrazao/Adobe hands of a man showing what's your plan for retirement

If you’re worried about ways to supplement your Social Security when you retire, analyze your current budget and your projected retirement budget, then figure out how you can save more now to have the amount you need later.

You also might want to revisit your budgets on a regular basis as your job situation or plans for retirement change.

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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 FoxSports.com.