Ever wondered why retirees run out of money — even after decades of careful saving? The answer isn’t just market performance. In fact, many retirees face financial challenges not because of what the market does, but because of what they do in response. Understanding this dynamic is key to building a retirement plan that lasts.

Resources:

• • FREE RETIREMENT READINESS REPORT 
  • Warren Buffett’s Bizarre Warning – What Retirees NEED to Know
    

    Why Retirees Run Out of Money: The Behavioral Trap

    It’s not uncommon for retirees to react emotionally when the market dips. Selling during downturns, becoming overly conservative, or making abrupt changes to their plan can sabotage decades of progress. These decisions, made in fear, are a major reason why retirees run out of money sooner than expected.

    Even those with well-structured portfolios can fall into this trap. A strong financial foundation doesn’t help if your behavior undermines it during periods of uncertainty.

    The Hidden Threat: Sequence of Returns Risk

    Another major reason why retirees run out of money is the timing of market returns. Known as “sequence of returns” risk, this refers to experiencing poor market performance early in retirement while simultaneously drawing income. These early losses, combined with withdrawals, can shrink a portfolio permanently.

    It’s not just about average returns — it’s about when those returns happen. Without a strategy to protect early withdrawals, a retiree may unknowingly accelerate the depletion of their savings.

    Two Retirees, Same Investments, Different Outcomes

    Let’s say two retirees start with the same portfolio. One has a strategy to manage market downturns — cash reserves, income buckets, or structured withdrawals — while the other doesn’t. Over time, their financial trajectories can diverge significantly.

    This is a real-world example of why retirees run out of money: not from poor investments, but from the absence of a withdrawal strategy that accounts for volatility.

    How to Avoid Running Out of Money in Retirement

    The good news is that there are proven strategies to prevent these pitfalls:

    • Maintain a cash reserve to avoid selling during downturns

    • Implement a bucket strategy to divide short- and long-term funds

    • Adjust withdrawal rates based on market performance

    • Stick to a disciplined investment strategy — not reactive decisions

    These simple steps, when combined with professional guidance, can help ensure your retirement income lasts as long as you do.

    Conclusion

    Understanding why retirees run out of money is the first step toward avoiding it. With the right plan in place — one that factors in both market realities and behavioral tendencies — you can retire confidently and sustainably. Don’t let fear or volatility dictate your retirement. Plan smart, stay steady, and protect what you’ve worked so hard to build.

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This does not constitute an investment recommendation. Investing involves risk. Past performance is no guarantee of future results. Consult your financial advisor for what is appropriate for you. Disclosures: https://onedegreeadvisors.com/solutions/#disclosures