grow old without running out of money


Planning for retirement is exciting but also daunting. Many people worry that their savings won’t last long enough, which can make their later years uncomfortable. Fortunately, you can avoid that with some planning. Here’s a look at how to grow old without running out of money.

Have a Budget

A budget is a financial roadmap, allowing you to proactively decide where your money goes each month. Even a simple spreadsheet can make a difference. It lets you track your expenses, allocate income to various categories, and otherwise ensure you don’t overspend during retirement.

It’s also wise to create a mock retirement budget. You can use that to estimate the amount you’ll need to withdraw each year to handle your expenses, letting you set a savings target that can meet that need.

Reduce Your Expenses

Getting your expenses as low as possible can help your retirement savings last longer. For example, if you can pay off your mortgage before retiring, all you’ll have to pay on your housing is property taxes, insurance, ongoing maintenance, and utilities. That’s usually far less than if you were also dealing with a mortgage or having to pay rent.

Paying off high-interest debt also has an impact. It will reduce how much you need to send out the door every month, allowing you to either withdraw less from your retirement account or spend more in other areas that matter to you.

Maximize Your Retirement Savings

If you’re concerned about having enough money for retirement, the first step you need to take is maximizing your retirement savings. Make sure you set enough cash into a qualifying account to hit the annual contribution limit.

You may also want two retirement accounts if you have access. Setting up a 401K through an employer along with an IRA on your own gives you more opportunities to save, so it’s worth considering. That allows you to secure the full match from your company while giving you investment flexibility beyond that point.

When you choose allocations, don’t shy away from risk, either. In many cases, higher-risk investments can lead to bigger returns. In most cases, you’ll want to speak to a financial advisor for guidance on your allocations, ensuring they generally align with your risk tolerance while offering you some degree of security through diversification and other steps.

Additionally, while you may want to reduce your risk level as you age, don’t forgo it entirely. Having some growth-oriented investments helps you offset part of what you withdraw, so it’s typically worth leaving some risk in the equation.

Wait to Tap Social Security

Social Security is usually a big part of every retiree’s income. However, the amount you receive can go up if you’re willing to wait.

For anyone born after 1959, the full retirement age is 67, but you become eligible for early retirement at 62. The issue is that early retirement comes with a financial penalty. Your benefit is reduced by up to 30 percent.

If you’re willing to wait longer, you could potentially increase your benefit. While the full retirement age is 67, you don’t have to claim benefits until age 70. Those extra years could increase your benefit by up to 24 percent, which could make all of the difference.

Have a Healthcare Plan

Medical expenses can add up quickly as a person ages. Make sure you account for rising healthcare costs when you create estimates. Additionally, if you have access to a health savings plan (HSA) while you’re working, use it. That money can carry over from year to year and into retirement. Plus, contributions and growth aren’t taxed, and you don’t pay taxes on withdrawals if the money is used for eligible medical expenses.

Ideally, you want to try to contribute the maximum allowed amount each year. However, anything above and beyond your current annual needs can help, so keep setting money aside until you enroll in Medicare.


Do you have any other tips that can help someone grow old without running out of money? Have you used some of the tips above and want to tell others about your experience? Share your thoughts in the comments below.

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