Warning: Outliving Your Savings Could Happen Sooner Than You Think
Many people dream of a comfortable retirement, picturing years of relaxation and financial freedom. But there’s a growing warning that outliving your savings could happen sooner than you think. This means you might run out of money during retirement, which can cause serious stress and hardship.
One big reason for this risk is that most Americans are not saving enough. Experts say the “magic number” to retire comfortably in 2025 is about $1.26 million, but the reality is far from this goal for many. For example, people aged 55 to 64 have median savings around $185,000 — way below what they ideally need. Even those between 65 and 74 only have about $200,000 saved on average. This gap shows how many retirees may struggle financially once they stop working.
Another factor making it harder to stretch retirement savings is rising costs like healthcare and inflation. These expenses keep going up faster than many expect or plan for, eating into their budgets more quickly than anticipated.
People are also adjusting their expectations about when they can retire because of these financial pressures. More workers now plan to retire later—between ages 65 and 70 or even beyond—because they realize their current savings won’t last long enough otherwise.
To avoid running out of money too soon in retirement:
– Start saving early and aim to save at least 15% or more of your income each year.
– Try to build assets equal to several times your annual salary by the time you reach your 50s and especially by your 60s.
– Plan carefully for taxes since unexpected tax bills can reduce how much income you actually get from your savings.
– Consider reliable income sources like annuities that provide steady payments throughout retirement.
The key takeaway is that optimism alone won’t secure a safe financial future after work ends; solid planning combined with realistic goals matters most if you want peace of mind in those golden years.
If you’re worried about whether you’ll have enough saved when it’s time to stop working, now’s the moment to take action—not just hope things will work out on their own.
