5 Things Americans Will Do If They Run Out of Money in Retirement

We all dream of a relaxing retirement in which we enjoy our favorite activities and spend time with loved ones. But unfortunately, life sometimes has other plans.

An unanticipated and unwelcome event — an expensive illness, or a deep and lasting stock market swoon — can drain most or all of our savings and instantly throw us into a financial crisis. If that happens, what would you do?

Answering that question before you retire is crucial. In 2021, the Insured Retirement Institute asked nearly 1,000 Americans ages 40 to 73 where they would turn if they ran out of money during retirement. Following are their top answers.

5. Rely on family and friends

When you go broke, you quickly find out who your friends are. Among Americans ages 40 to 73 surveyed, 8% said they would turn to family and friends if they ran out of money in retirement.

Of course, having to make such a request is uncomfortable at best. Having extra money stashed away can buy you the time you need to figure out how to generate more income without having to rely on others. For more, check out “9 Tips for Starting an Emergency Fund Today.”

4. Rely on children

We live in an age when adult children regularly return to the parental nest long after embarking on adulthood. So, maybe it’s only fair that those parents would turn to their children in a time of financial need.

Overall, 10% of survey respondents said this would be their strategy after going broke. Kids, you’ve been warned!

3. Seek assistance from a church, the state, etc.

Americans pride themselves on being self-sufficient. But at some point, virtually all of us need a helping hand.

Among those surveyed, 11% said they would look to assistance from a church, the government or a similar institution upon running out of cash.

2. Go back to work if able

It is no surprise that people who run out of money would start looking for a job. It’s simply the best and fastest way to rebuild your savings after they have been depleted. For that reason, 38% of respondents said their first response to running out of cash would be to unretire.

Of course, getting back into the workforce late in life can be easier said than done. Age discrimination is a fact of life, and health problems also can make it difficult to land and keep a job.

But if you are up for the challenge, you should be able to find work even later in life. For more tips, check out “20 Great Part-Time Jobs for Retirees.”

1. Downsize to live on Social Security

Retirees who run out of money quickly thank their lucky stars for Social Security. No matter what happens to your own personal cash stash, the nation’s retirement system will be there to keep you from becoming penniless.

In fact, 62% of older Americans say their first response to running out of money in retirement would be to downsize their lives so they could live on their Social Security benefits alone.

Granted, getting by on Social Security alone is easier said than done. The system was never meant to provide a retiree’s sole source of income. The average retired worker’s benefit payment is only about $1,500 per month.

It will not happen

Of course, there is a segment of people — in this case, 17% of the survey respondents — who say running out of money simply will never happen. We admire their optimism.

And of course, there is a good chance they are right, especially if they have been diligent and intelligent savers and investors throughout their working lifetime.

Want to increase the odds that you won’t end up broke? Sign up for the Money Talks News retirement course, The Only Retirement Guide You'll Ever Need.

This 14-week online boot camp is intended for those who are 45 or older, and it can teach you everything from Social Security secrets to how to time your retirement.

For more tips, check out Money Talks News founder Stacy Johnson’s podcast “How to Avoid Running Out of Money in Retirement.”