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If you're worried about a shortfall between your income and expenses in retirement, you're not alone. But there are ways you can make up the difference.
By
Brian Teets, IAR, MBA
published
11 January 2026
in Features
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About once a week, I hold workshops on retirement planning and Social Security. During these workshops, I like to ask those attending a simple question: "What is your main concern?"
Invariably, the most common answer is: Running out of money.
This isn't surprising. 64% of Americans worry more about running out of money than they do about dying, according to an Allianz Life survey. That's some heavy worrying.
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Sign upSadly, many of those people may do nothing more than worry. The survey also showed that just 23% said they had discussed their concerns about running out of money with a financial professional.
Whether you work with a professional or not, it's important to set up a budget for your retirement years to make sure expenses don't exceed income and push you toward that empty bank account so many people worry about.
How much income will you need?
One of the first steps in creating that budget is to determine how much money you expect to need in retirement once a regular paycheck is no longer showing up in your bank account.
A good rule of thumb is to shoot for 80% of your pre-retirement income. That would include Social Security, a pension (if you have one) and withdrawals from your retirement savings, such as an IRA or 401(k). You may also own stocks, rental property or other assets that will provide income for you.
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Some people opt for a lower percentage, perhaps under the assumption they can get by on much less money than they did during their working years. Perhaps they can. For many people, though, that's simply not the case.
It's even possible you might spend more each month than you did before you retired. During their working years, people often spend more money on Saturdays than they do on weekdays, which makes sense because for most people, that's a day off from work.
In retirement, though, every day is Saturday, providing plenty of time to spend money if you aren't careful.
Tally expenses
This is why you need a good handle on both your expenses and income.
- How much are your bills?
- Do you still have a mortgage?
- Do you have credit card debt?
- What will inflation do to your money's spending power?
In my experience, many people spend more money early in retirement. For example, they may travel more while their health is still good. Or they simply fill those non-working hours with visits to restaurants or by spending money on entertainment.
Others take it slow and casual. They prefer a quiet lifestyle in retirement and are conservative with their money. You should determine where you fit on that scale as you are creating your retirement plan.
Of course, expenses also vary depending on where you live. Housing costs vary throughout the country. Some states have state income taxes; others don't.
As you continue to age, you may need to spend more on health care and even long-term care, which can be expensive. The cost of a nursing home could run as high as $135,500 a year in 2026, according to the annual CareScout and Genworth Cost of Care survey.
It would be nice to think you won't need long-term care, but research by the Health and Human Services Department reveals slightly more than half of Americans turning 65 will need some sort of long-term care assistance at some point in their lives.
There are different ways you can prepare for that. One is long-term care insurance, although that can prove pricey. With some life insurance policies, you can add a long-term care rider and use the death benefit to pay for long-term care if necessary.
What to do if the numbers don't add up
As you make your plans and do your budgeting, what can you do if the income and expenses aren't balancing out the way you hoped?
One option is to reconsider when you take Social Security. The timing for claiming your benefit can make a significant difference in the amount.
You can claim Social Security as early as age 62, but that puts you at a reduced amount for the rest of your life, other than for cost-of-living adjustments. It's generally better to wait until you reach full retirement age, which is 67 for most people these days.
And if you can postpone claiming the benefit until you are 70, the amount of your monthly benefit will be even greater.
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You might also explore ways to create an additional income stream in retirement. For example, purchasing an annuity can give you a guaranteed monthly payment for life, much the way a pension would.
Finally, you could consider postponing your retirement. That would give you extra time to save more money while reducing the number of years you draw on your savings to live.
There are numerous options for improving your financial situation and reducing the likelihood of running out of money in retirement, but these options will vary depending on your individual circumstances.
A financial professional can review the numbers with you and advise you on what would be best for you. That can give you greater confidence as you head into retirement, for what will hopefully be many years of enjoyment.
Ronnie Blair contributed to this article.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
- Will You Outlive Your Money?
- Nine Things You'll Spend Less on in Retirement
- Retirement Calculator: How Much Do You Need to Retire?
- When To Take Social Security Payments: Your Age Matters
- Will You Have a Retirement Income Gap? How to Fill It
This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.
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Brian Teets, IAR, MBASocial Links NavigationFounder, Safe Haven Wealth ManagementBrian Teets is a financial adviser and the founder of Safe Haven Wealth Management, where his goal is to eliminate the worry of running out of money and help retirees enjoy the lifestyle they have worked hard to build. With over 14 years in the financial industry, Brian makes retirement planning accessible to everyone, explaining complex topics in relatable terms. Before becoming a financial adviser, Brian taught high school business classes for 20 years.
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