5 Ways Americans Say They Can Avoid Running Out of Money in Retirement

Nobody likes to think about dying. But for nearly two-thirds of Americans, one fear is even worse.

In a survey of 1,000 Americans age 25 and older, 63% say they worry about running out of money more than they fear death, according to the 2024 Annual Retirement Study from Allianz Life Insurance Co. of North America.

Members of Generation X were most likely to report this sentiment, with 71% agreeing with the statement. Millennials (64%) and baby boomers (53%) were a bit less likely to feel that way.

So, what steps would you take to make sure you don’t dwindle your savings down to your last thin dime?

Here are things survey respondents believe they could do to ensure their wallets remain full.

What makes people fear going broke more than death?

In truth, very few folks will run out of money in retirement. In fact, literally spending every penny is virtually impossible for most, thanks to the Social Security program.

However, Americans still worry about the possibility of going broke. And three factors are driving those fears right now:

• High inflation: 43%
• Social Security not providing enough support: 24%
• High taxes: 22%

If you are truly worried about draining your bank account during your golden years, check out Money Talks News founder Stacy Johnson’s podcast “How to Avoid Running Out of Money in Retirement.”

Now, on to the things Americans say they could do to ensure they don’t run out of cash during retirement.

5. Invest in a product that provides a balance of market protection and growth

Survey respondents who cited this as a top solution to address their concern about running out of money: 26%

The Allianz survey does not clearly define what type of investment provides a balance of protection and growth. It’s possible that a balanced mutual fund — which invests in a mix of stocks and bonds — would fit that description.

Either way, it makes sense that folks in retirement are ready to dial back on risk a bit and are leaning toward more safety. Doing so reduces the risk of losing too much of your money in a market crash.

3. Work longer and retire later (tie)

Survey respondents who cited this as a top solution to address their concern about running out of money: 35%

Among the simplest and best ways to avoid running out of money is to keep working. Each year you put off retirement is another year to fatten your nest egg, thus reducing the risk that you will spend it all down during retirement.

One compromise is to semi-retire: quit your full-time job and take on part-time work to bring in a little income. For more tips, check out “20 Great Part-Time Jobs for Retirees.”

3. Put money in a product that provides lifetime income payments (tie)

Survey respondents who cited this as a top solution to address their concern about running out of money: 35%

If you have a large amount of retirement savings, you might want to consider using some of that money to purchase an annuity.

Annuities require a lump sum of money in exchange for a monthly check that you receive for the rest of your life. Many people find that they boost both income and peace of mind.

However, annuities come with both pros and cons. Stacy discusses them in the podcast “Should You Buy an Annuity? The Pros and Cons.”

You can also learn more in “4 Reasons To Buy an Annuity — and 4 Reasons To Walk Away.”

2. Reduce spending and save more

Survey respondents who cited this as a top solution to address their concern about running out of money: 38%

For many generations, Americans faced with tough times used the same simple strategy: They tightened their belts.

To some degree, that approach is out of fashion. Today, people facing an income crunch are more likely to run up debts on their credit cards instead — a strategy of dubious wisdom.

The survey respondents appear to recognize that spending less and saving more — and perhaps even practicing the “10 Smart Habits of Frugal People” — is a better way to go if you want to avoid going broke.

1. Increase retirement savings

Survey respondents who cited this as a top solution to address their concern about running out of money: 41%

If you are still working, increasing your retirement savings and doing so year after year is one of the most painless and productive ways to build a nest egg that will virtually ensure you don’t run out of money.

This strategy is most effective for those who have many years of work remaining, but anyone can benefit.

To get inspired about this strategy, read “7 Key Habits of 401(k) and IRA Millionaires.”