Worrying about running out of money in retirement can make it difficult to enjoy the years you’ve worked so hard to reach. Even people who have saved consistently can wonder whether their money will last through a retirement that could stretch for decades.
The good news is that feeling uncertain doesn’t necessarily mean you’re in financial trouble. It can be a useful signal to take another look at your plan while you still have options. A few thoughtful changes may help you feel more prepared and give you a clearer picture of how sustainable your retirement income really is.
Take Another Look at Your Spending
If you’re worried about running out of money, start with what you can control: your spending. Go through several months of bank and credit card statements and separate your expenses into essentials, important expenses, and things you could potentially reduce or eliminate.
You may discover that some costs have changed since you first created your retirement budget. Perhaps you’re spending less on commuting but more on healthcare, or you’ve accumulated subscriptions and memberships you no longer use. You don’t have to cut everything you enjoy. Even reducing a few recurring expenses can lower the amount you need to withdraw from your savings each year.
Review When and How You’re Taking Money From Your Savings
The amount you withdraw is only part of the equation. When you sell investments or take distributions can also matter. If you’re taking the same amount from your portfolio regardless of market conditions, you may want to revisit your withdrawal strategy. Large withdrawals during a significant market decline can potentially put additional pressure on a portfolio. Consider reviewing your withdrawal strategy with a qualified financial professional who can look at your overall situation, including your savings, investments, other income sources, taxes, and expected expenses. A retirement plan doesn’t necessarily have to be completely rigid. Adjusting withdrawals when circumstances change may give your savings more flexibility.
Look for Ways to Increase Your Income
If your retirement savings aren’t stretching as far as you’d like, reducing expenses isn’t your only option. Depending on your circumstances, you might consider part-time work, consulting, freelancing, renting out unused space, or turning a hobby or skill into an occasional source of income. Even modest additional income can reduce the amount you need to withdraw from your investments. For example, earning an extra $500 a month would provide $6,000 in additional income over a year. That’s money that potentially doesn’t have to come out of your retirement portfolio. Working longer or returning to work isn’t the right choice for everyone, but it’s worth considering if it would meaningfully improve your financial security.
Reconsider Your Biggest Expenses
Small spending changes can help, but major expenses often have a much greater effect on retirement finances. Housing, transportation, healthcare, and debt payments can consume a substantial portion of a retiree’s budget. If you’re concerned about longevity, take a closer look at these categories.
Could you eventually downsize to a less expensive home? Could you eliminate a car payment? Would refinancing or paying down certain debt make sense? Are there household expenses that have become unnecessarily high? You don’t need to make a drastic change immediately. Simply identifying which major expenses could potentially be reduced gives you more options if your financial situation changes later.
Get a Professional Second Opinion
Sometimes the biggest source of retirement anxiety is simply not knowing whether you’re actually on track. A qualified financial professional can help you examine your projected income, expenses, investments, taxes, inflation, healthcare costs, and potential longevity. They can also help you test different scenarios, such as what might happen if markets perform poorly or you live longer than expected. If you already work with an adviser, asking for an updated retirement-income analysis can be worthwhile. If you don’t, look for a professional who clearly explains fees and potential conflicts of interest before agreeing to anything. You don’t need to hand someone control of your finances just because you’re asking for advice. A second opinion can simply help you understand your options.
*This article was developed with AI-powered tools and has been carefully reviewed by our editors.
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