How Can You Make Sure You Do Not Outlive Your Money?
An article published today, August 22, 2026, in Fast Company addresses one of the most important concerns surrounding retirement
Shanti
8/22/20263 min read
How Can You Make Sure You Do Not Outlive Your Money?
An article published today, August 22, 2026, in Fast Company addresses one of the most important concerns surrounding retirement: If we live longer than expected, will our savings continue to cover our living expenses?
Many of us worry that we may not have the opportunity to enjoy the results of years of work and saving before reaching retirement. However, there is another risk that receives less attention: running out of money during the later years of life.
Imagine Yourself at Age 80, 90, or 100
Retirement planning should not be based solely on your current circumstances. Consider asking yourself:
Where will I live during my later years?
How will I pay for my everyday expenses?
What will I do if I need assistance from others or long term care?
How well will my income withstand inflation and rising healthcare costs?
Will my spouse or other family members also be financially protected?
When we imagine the future more clearly, our financial needs during retirement no longer seem distant or uncertain.
Do Not Assume That Today’s Circumstances Will Last Forever
One of the important points discussed in the Fast Company article is a cognitive bias known as the “forever fallacy.” This refers to our tendency to believe that our current circumstances will always remain the same.
Someone may be healthy, independent, and have relatively low expenses at the beginning of retirement. However, as that person grows older, their health, ability to perform daily activities, living arrangements, and expenses may change. Inflation, economic changes, and healthcare costs can also make a plan that appears sufficient today inadequate in the future.
For this reason, a suitable retirement plan should be flexible and prepared for different circumstances, including the possibility of living longer than expected.
Do Not Overlook Long Term Care
According to the United States Administration for Community Living, someone turning 65 today has nearly a 70 percent chance of needing some form of long term care services or support during the remaining years of life. These services may include assistance at home, personal care, living in an Assisted Living facility, or residing in a nursing home.
It is important to understand that Medicare generally does not cover long term care or assistance with routine personal needs. Under certain conditions, Medicare may cover short term skilled care. However, individuals are generally responsible for most expenses related to long term nonmedical care.
To prepare for these expenses, individuals may consider options such as dedicated savings, long term care insurance, certain life insurance policies that offer living benefits, and Medicaid for those who meet the eligibility requirements. The conditions, limitations, and costs of each option vary.
Do Not Choose When to Claim Social Security Based Only on the Break Even Point
Social Security retirement benefits may be claimed as early as age 62. However, claiming benefits early may reduce the monthly payment by as much as 30 percent. In contrast, for individuals born in 1943 or later, delaying benefits beyond full retirement age may increase the monthly benefit by approximately 8 percent per year until age 70.
Some people try to calculate how long they would receive more money in total by claiming benefits early. However, Social Security can also be viewed as protection against unexpected longevity because monthly benefits continue for the rest of a person’s life.
The best time to begin receiving benefits is not the same for everyone. Health, family history, income needs, employment status, spousal benefits, and other retirement resources should all be considered when making this decision.
Review Your Retirement Plan from Several Perspectives
To reduce the risk of running out of money during retirement, consider reviewing the following areas:
Estimate essential and optional retirement expenses.
Account for inflation and potential increases in healthcare costs.
Establish an income source that can continue throughout your lifetime.
Maintain an appropriate emergency fund.
Plan for potential long term care needs.
Determine the appropriate time to begin receiving Social Security benefits.
Review your life insurance coverage and the financial protection available to your spouse or family.
Update your plan regularly as your circumstances change.
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