Outliving Your Money: 7 Hidden Dangers that Drain Your Money

Outliving your money is one of the scariest realities facing today’s retirees. Even if you’ve saved diligently, the combination of rising costs, taxes, and unexpected health expenses can drain your nest egg faster than you imagine.

The good news? By identifying these hidden dangers early, you can protect yourself and your future.

7 Retirement Risks to Avoid: Outliving Your Money

1. Market Volatility: The Silent Wealth Killer

A major downturn right before or during retirement can erase years of growth. For many retirees, this risk becomes reality when they rely solely on 401(k)s or IRAs tied to market performance.

Solution: Diversify with a fixed indexed annuity or IUL policy that locks in gains but protects against losses.

2. Rising Healthcare Costs

Health expenses — especially long-term care — can drain even the most disciplined saver’s account. Medicare doesn’t cover everything, and private care can exceed $100,000 annually.

Solution: Use life insurance with Living Benefits or hybrid long-term care policies to safeguard your savings.

3. Inflation: The Hidden Erosion Factor

Even 3% inflation cuts purchasing power in half over 25 years. Retirees feel it most when their income is fixed but expenses keep climbing.

Solution: Create income streams that adjust or grow, such as annuities with inflation riders or IULs with market-linked returns.

4. Taxes: The Retirement Surprise No One Plans For

Withdrawals from 401(k)s, IRAs, and pensions are taxable. For many, that means giving 20–30% of their income back to the IRS.

Solution: Shift savings into tax-free vehicles like Indexed Universal Life insurance and Roth IRAs for future flexibility.

5. Longevity Risk: Living Too Long Without a Plan

It’s great news that people are living longer — but your money must last longer too. Many underestimate their life expectancy and overspend in early retirement.

Solution: Guarantee income for life through annuities or create a personal “retirement paycheck” using lifetime income strategies.

6. Poor Debt Management

Carrying mortgage, credit card, or student loan debt into retirement can limit cash flow and increase stress.

Solution: Use a pre-retirement debt elimination plan that frees cash to fund income-generating assets instead.

7. Lack of a Coordinated Strategy

Most Americans have savings, insurance, and investments scattered across multiple accounts without a clear, unified plan. This lack of coordination leads to missed opportunities and inefficiencies.

Solution: Work with a financial professional who can align your income, tax, and protection strategies into one cohesive retirement plan.

Running out of money is the biggest retirement fear in America — bigger than illness or even death. Here’s how you can put that fear to rest with a lifetime income strategy.

The Bottom Line

Outliving your money isn’t inevitable — it’s preventable. The retirees who thrive are the ones who take control early, protect their income, and plan for longevity.

Take the first step:

1. Discover your financial blind spots — Take our 3-minute Let's Begin with Financial Fundamentals Assessment.

   
   

2. Explore guaranteed lifetime income options with an advisor who understands your goals.

   
   

3. Secure your future so your money lasts as long as you do.