How to Conquer the Biggest Fear in Retirement, Outliving Your Savings
One of the greatest fears I hear from retirees isn’t illness, it isn’t even death it’s running out of money. In fact, surveys show that 64% of Americans fear depleting their savings more than dying itself. That fear is rooted in longevity risk, the very real possibility of outliving your retirement funds. Nearly 45% of retirees at age 65 may face this challenge if they don’t plan carefully.
Longer lifespans make this issue even more pressing. The average 65-year-old man today can expect to live until 87, and women on average reach 89. For couples, there’s a 50% chance that one spouse will live past 90. That means planning for a retirement lasting 25 to 40 years isn’t optional anymore it’s essential.
One way to build flexibility into your plan is by using the five-year rule: save as if you’ll retire five years earlier than expected. This not only prepares you in case of an unexpected job loss or health challenge, but it also ensures that if you keep working, you’ll enter retirement with a stronger safety net.
Withdrawal strategies also need to be revisited. The traditional 4% rule withdrawing 4% of your portfolio annually — was designed for shorter retirements. With longer life expectancies, a rate closer to 3.3% to 3.7% may be more sustainable. Fortunately, retirees often spend less as they age, especially after the early years of travel and lifestyle upgrades, which helps balance out longevity risk.
But strategy matters. Diversifying income streams beyond Social Security and investment withdrawals is critical. Consider annuities or other guaranteed income products, delay Social Security to increase your benefit by up to 8% annually, and gradually shift your portfolio from aggressive growth toward capital preservation and consistent cash flow.
Annual reviews are a must. Life changes, markets change, and tax laws change your retirement plan should adapt with them. I also encourage legacy planning to ensure your loved ones are taken care of and that wealth is transferred smoothly.
More than anything, mindset is key. Longevity risk can feel overwhelming, but with a proactive plan, it becomes manageable. Diversification, flexibility, and preparation allow you to not just survive retirement, but to enjoy it fully without the constant worry of outliving your savings.
All writings are for educational and entertainment purposes only and does not provide investment or financial advice of any kind.
