5 Essential Financial Tips to Help You Avoid Running Out of Savings in Retirement

Katharine Paljug

Wed, August 5, 2026 at 12:05 PM GMT+3 4 min read

A flexible spending plan can help retirees protect their savings through market swings and rising costs.
Credit: Nick David / Getty Images

Key Takeaways

Retirement costs can look different than expected, especially when healthcare and other expenses rise over time.
Holding several years of income needs in safer assets can reduce the pressure to sell stocks during a downturn.
Flexible withdrawals and thoughtful Social Security timing can help retirement savings last longer.

Many Americans are worried that they will outlive their savings.

"Running out of money is a real risk, and for most retirees, it doesn't happen because of bad investments," said Melissa Caro, certified financial planner (CFP) and founder of My Retirement Network. "It happens because of bad timing, inflexible spending, or poor planning around income streams."

Whether you're already retired or looking toward the future, here are five strategies that can reduce the risk of outliving your savings.

Know What Retirement Will Actually Cost

Planning is one of the most important steps to make sure you don't run out of money in retirement. Don't just pick an age you want to stop working and assume that things will work out.

"Make sure you have enough saved before you decide to retire," said Michael Espinosa, CFP at TrueNorth Retire.

If you're unsure how much you'll need or what your savings will equal in annual spending, talk with a financial advisor.

"I like to use retirement planner calculations based on each individual's desired spending amount to ensure that they are saving and investing enough for retirement," Espinosa said.

Protect 5 Years of Income From Market Swings

The economy is going to fluctuate during your retirement and withdrawing from retirement accounts during market downturns can significantly reduce the value of your savings.

Caro recommends having your money in different accounts during retirement, depending on when you will need it.

"Keep five years of income needs in safer assets like cash, CDs, or short-term bonds so a market drop doesn't force withdrawals from stocks at the worst time," she said.

Then the bulk of your savings can stay invested to keep growing when the market turns around.

See Where Your Retirement Money Is Going

It can be easy to assume you have plenty to spend in retirement if you spent years saving. But if you aren't tracking your expenses, you might run through your savings before you realize it.

"The number one mistake is that people end up guessing their retirement spending without actually tracking it," Espinosa said. "Most people underestimate their true spending numbers, and this can lead to depleting their portfolio earlier than anticipated."

Caro agrees, saying, "The biggest mistake is assuming spending will drop just because you've retired. It rarely does."

Many retirees want to travel or take up hobbies, while healthcare, home maintenance, and other expenses can increase with age. Plus, Caro adds, "old spending habits don't disappear just because the paycheck does."

Adjust Spending as Conditions Change

Another mistake to avoid? Assuming your spending can stay the same each year.

"Retirement spending should be dynamic, meaning higher in good markets, leaner in down years," said Caro. "The retirees who stay solvent are the ones willing to adapt when conditions change."

In addition to tracking your spending, pay attention to market conditions and how they affect your withdrawal plan. Save big expenses, like travel, for times when the market is up, and avoid debt so you can adjust your daily expenses more easily when prices rise.

Choose Your Social Security Timing Carefully

Many Americans are worried about the future of Social Security, but both Caro and Espinosa advise against overthinking it.

"I'd say worry is understandable, but panic is misplaced," said Caro.

Espinosa notes that even if the Social Security trust fund is depleted, retirees will still receive most of their expected benefits. Currently, the Social Security trust fund that pays retirement and survivor benefits is currently projected to be depleted in 2032. If Congress does not act, continuing income would be enough to pay about 78% of scheduled benefits at that point.

"The system may adjust through smaller cost-of-living increases, higher taxes, or later eligibility, but benefits aren't vanishing," said Caro.

For younger investors, experts suggest planning retirement without counting on Social Security to create more flexibility.

"Instead of guessing at policy changes, focus on what you can control: how early you claim, how long you work, and how much private savings you build to complement your benefits," said Caro.

Read the original article on Investopedia