Running out of money in retirement means living on Social Security and any pension you have. The average retired worker gets about $2,170 a month in 2027. When that isn’t enough, Medicare Savings Programs, Medicaid, SSI, and SNAP can cover some costs. Home equity is often the last large asset left.
Two in three Americans (67%) worry more about running out of money than about dying, Allianz Life found in April 2026. That’s up from 57% in 2022. Here’s what happens if savings do run out and how many people are at risk. You’ll also see how to spot the problem while you can still change course.
What Happens If You Run Out of Money in Retirement?
If you run out of money in retirement, your guaranteed income keeps coming, and your spending has to shrink to fit it. Help for seniors who run out of money comes from family and from state and federal programs that pick up part of the gap.
| What’s left | What it pays | Who qualifies |
|---|---|---|
| Social Security | About $2,170 a month for the average retired worker; about $3,355 for a couple (January 2027) | Anyone with enough work credits; benefits last for life |
| A pension | Your monthly benefit, for life | Retirees with a pension; the Pension Benefit Guaranty Corporation (PBGC) insures most private pensions up to a limit |
| Medicare Savings Programs and Extra Help | Your Part B premium and sometimes deductibles; lower Part D drug costs | Limited income and savings; the QMB income limit is $1,350 a month for one person (2026) |
| Medicaid | Long-term care and costs Medicare doesn’t cover | Low income and savings; you keep Medicare |
| SSI | Up to $1,029 a month for one person or $1,544 for a couple (2027) | Countable savings under $2,000, or $3,000 for a couple; your home doesn’t count |
| SNAP | Money for groceries | Households with someone 60 or older: net income at or below the poverty line and savings up to $4,750; under 65, work rules may apply |
| Home equity | Cash from a sale, downsizing, or a reverse mortgage | Homeowners; reverse mortgage borrowers must be 62 or older |
Source: Social Security Administration, 2027 COLA fact sheet and SSI resources; Medicare, Save Money on Your Medicare Costs; USDA, FY 2027 SNAP memo. State rules vary for Medicaid, Medicare Savings Programs, and SNAP.
If you qualify for Medicaid, you keep Medicare, and Medicaid covers much of what Medicare doesn’t. Medicaid eligibility rules vary by state.
Day to day, running out means a smaller life. Many retirees in this spot cut spending to what Social Security covers, move in with family, or sell the house. Those who can still work pick up part-time income.
How Many Retirees Run Out of Money?
About 4 in 10 Americans ages 35 to 64 are projected to run short of money in retirement. The Employee Benefit Research Institute’s model puts the baseline at 40.1%, in an analysis published in July 2024. Counting the SECURE Acts’ savings provisions lowers it to 38.5%. Running short means not covering average retirement costs plus uninsured health costs.
The worry is widespread. In the Allianz study, Gen Xers were the most worried at 73%, ahead of millennials at 69% and boomers at 59%. And 48% of Americans don’t have a written financial plan.
Financial planners hear the same fear. Nearly half of them, 47%, say it’s their clients’ biggest retirement worry, according to the Financial Planning Association’s 2025 research. Running short also ranks among retirees’ top regrets.
Why Do Retirees Run Out of Money?
Retirees run out of money when they live longer than planned, face long-term care costs, withdraw too much at the start, hit a bad market in the first few years, or claim Social Security at 62.
- A longer life than planned. Retirement can last 20 to 30 years or longer, so savings that look ample at 65 can run thin at 90.
- Long-term care. A 65-year-old has almost a 70% chance of needing long-term care. A private nursing home room cost a national median of $129,575 in 2025, according to CareScout. A non-medical caregiver for 44 hours a week cost $80,080. Medicare doesn’t pay for this kind of ongoing care.
- Withdrawals that start too high. Morningstar puts a safe starting withdrawal rate at 3.9% for 2026. Spending well above that early raises the odds that savings run out.
- A bad market early in retirement. Losses in the first few years do the most damage, a problem called sequence of returns risk.
- Claiming Social Security early. Claiming at 62 locks in a smaller check for life. Delaying Social Security raises the floor you’d live on if savings ran out.
Some retirees have the opposite problem and spend too little out of fear of spending their savings. A plan helps with both.
Will Social Security Run Out Too?
Social Security benefits keep coming even if the trust funds run dry. The 2026 Trustees Report projects the combined trust funds will be depleted in 2034. After that, incoming payroll taxes would still cover 83% of scheduled benefits, according to the Social Security Administration. The retirement trust fund alone runs dry in late 2032, with 78% of benefits payable.
Congress has until then to change taxes or benefits.
How Can You Tell If You’re on Track to Run Out?
You may be on track to run out if your withdrawals run well above a safe rate or your balance falls faster than your plan assumed. Paying regular bills with credit cards is another warning sign, and so is having no plan for long-term care.
The Boldin Planner shows how long your savings will last. Its Lifetime Income Projection chart shows a deficit in any year your income and savings can’t cover your spending. You can then test changes, like working two more years or cutting travel, and see whether the deficit closes.
How Can You Avoid Running Out of Money in Retirement?
To avoid running out of money in retirement, raise your guaranteed income, set a spending plan you can keep, and plan for long-term care. These moves do most of the work:
- Work a little longer. Each extra year you work adds income and shortens the years your savings must cover. Even part-time work helps.
- Set a spending plan. Separate must-spend costs from nice-to-spend ones in a retirement spending plan, so you know what to cut first.
- Delay Social Security. Each year you wait past full retirement age, up to 70, raises your benefit by 8%.
- Add guaranteed income. A lifetime annuity turns part of your savings into a monthly check for life. Compare costs and terms before you buy.
- Plan for long-term care. Decide now how you’d pay: savings, insurance, home equity, or Medicaid. A long-term care plan lowers the odds that one illness drains your savings.
- Use your home on purpose. Downsizing frees cash and cuts costs. A reverse mortgage can turn equity into income if you’re 62 or older and plan to stay.
What Can You Do If You’re Already Running Low?
If you’re already running low, start with free help. These services connect older adults with benefits and counseling:
- Eldercare Locator: call 1-800-677-1116 to reach your local Area Agency on Aging.
- BenefitsCheckUp: a free tool from the National Council on Aging that matches you to programs by ZIP code.
- State Health Insurance Assistance Program: free Medicare counseling, including help applying for Medicare Savings Programs.
- A HUD-approved reverse mortgage counselor: required before any reverse mortgage, and a good way to test whether one fits.
You can also come out of retirement and go back to work. A job in retirement adds income right away. If you’re collecting Social Security before full retirement age, the earnings test can hold back part of your benefit for a while.
The earlier you see a shortfall coming, the more ways you have to close it.
FAQs: Running Out of Money in Retirement
Do pensions run out?
A traditional pension pays a set amount for life, so it doesn’t run out the way savings can. If a single-employer plan fails, the Pension Benefit Guaranty Corporation pays benefits up to a limit, $8,113.64 a month at 65 in 2027. Multiemployer plans have a lower guarantee. Most benefits in failed plans fall below the limit.
Can you lose your house if you run out of money in retirement?
You can keep your home while on SSI or Medicaid. SSI doesn’t count it, and Medicaid exempts it up to an equity limit. After you die, states must try to recover Medicaid long-term care costs from your estate, including the home. They can’t while a spouse is alive, or while a child under 21 or a disabled child survives.
Does Medicare stop if you can’t pay the premiums?
Part B can end if premiums go unpaid. Medicare sends bills and a delinquency notice over about three months. If you don’t pay the full amount by the date on the termination notice, coverage ends. Premium-free Part A continues. A Medicare Savings Program can pay your Part B premium if your income and savings are limited.
Can you go back to work after you retire?
You can go back to work after you retire at any age. If you’re under full retirement age and collecting Social Security, earnings above $25,560 in 2027 reduce your checks for a while. At full retirement age, Social Security raises your monthly benefit to credit the months it held back.
What happens to your debts if you run out of money in retirement?
Debts don’t go away when your savings do, but most collectors can’t touch your benefits. Private debt collectors can’t garnish Social Security or SSI, and your bank must protect two months of direct-deposited benefits. Back taxes, federal student loans, and child or spousal support can still reach Social Security, though SSI stays protected.
