The cost of living continues to rise, placing increasing financial pressure on those already in retirement. As a result, many seniors now face a heightened risk of outliving their savings. According to a 2025 analysis by the Transamerica Center for Retirement Studies, retirees in 41 states and Washington, D.C. are projected to deplete their savings before the end of their lives, with an average shortfall of $115,000. Factors such as inflation, market volatility, tariffs, and longer life expectancies all contribute to this growing challenge.1
This six-figure gap is staggering for retirees who expected to enjoy a comfortable lifestyle after decades in the workforce. To make up the difference between rising expenses and limited savings, many may be forced to make significant lifestyle adjustments or even consider returning to work on a part-time or full-time basis.
Individuals approaching retirement are feeling the pressure as well—especially those who have been counting on the traditional 4% withdrawal rule, which suggests withdrawing 4% of savings in the first year of retirement and adjusting that amount annually for inflation to make savings last roughly 30 years.
While these concerns are understandable, there are proactive steps to take before retiring to help reduce potential shortfalls. Below, we outline key strategies to help prepare for the retirement you’ve envisioned, without the fear of running out of money.
Delay taking Social Security
At age 62, you become eligible to claim Social Security benefits. However, if you take Social Security at 62, it is considered to be an early withdrawal, as individuals don’t receive full benefits until they reach Full Retirement Age (FRA) at 67 (for those born in 1960 or later). This is why delaying benefits can be a great strategy for those who are worried about their savings from their 401(k), 403(b), pension, or IRAs running out in their lifetime. These benefits are also a powerful tool for retirees because they increase with inflation through annual Cost-Of-Living Adjustments (COLAs).
Nevertheless, delaying benefits might not be the right choice for everyone. For anyone who has been battling health issues that could potentially lead to a short life expectancy, claiming Social Security benefits late could mean they aren’t able to take full advantage of the money that they worked for throughout life. Though if they have a surviving spouse, that money can be a helpful safety net in the event that they pass away.
There is a second factor to consider regarding Social Security. Over the past few years, lawmakers have been sounding the alarm on the shortfall that’s expected to impact the Social Security program in 2035. Essentially, trust funds are projected to deplete around 2035, meaning ongoing payroll taxes would only cover about 78% of scheduled benefits. If Congress doesn’t act by then, this will equate to cuts of 20-25%. While some industry professionals believe that Congress will step in before 2035 to make sure that this doesn’t happen, there is no guarantee of that occurring. With the number of Americans over the age of 65 projected to increase to more than 78 million in 2035 compared to the roughly 58 million in 2025, this puts many Americans at risk.2 If you won’t reach FRA by 2035, it could be useful to explore other income options outside of Social Security.
Buying a lifetime income annuity
If you have additional money to set aside for retirement, purchasing a lifetime income annuity can be an effective way to reduce the risk of outliving your savings. A lifetime income annuity provides a guaranteed stream of payments for as long as you live, helping ensure income even if your retirement accounts are depleted. You fund the annuity either with a lump sum (in the case of an immediate annuity) or with payments over time (typically through a deferred income annuity), and the insurance company pays you a regular income—monthly, quarterly, or annually.
There are options for both individuals and couples. For couples, this is referred to as a joint and survivor annuity. Income can continue for as long as either partner is living. Depending on the option selected, the surviving partner may receive the full payment amount or a reduced portion of it after the first partner passes.
Depending on how the annuity is funded, there may be tax advantages. When you purchase an annuity with after-tax money, a portion of each payment will be tax-free as you recover your original investment. If the premium comes from a Roth IRA rollover and the Roth account meets qualification rules, annuity payments are generally tax-free. Any taxable portion of annuity income is taxed at ordinary-income rates, not capital-gains rates.
Consider buying long-term care insurance
Healthcare is one of the largest expenses retirees face beyond their day-to-day living costs. Estimates suggest that a 65-year-old couple may need as much as $366,000 in savings to have a 90% chance of covering healthcare expenses—including premiums, deductibles, prescriptions, copays, and other out-of-pocket costs—throughout retirement.3 Many seniors assume Medicare or Medicaid will cover most medical needs; however, these programs often provide limited support for long-term care, which is where the greatest financial strain typically occurs. The Department of Health and Human Services estimates that 56% of people turning 65 between 2021 and 2025 will require long-term care services at some point in their lives.4 As healthcare costs continue to rise, these needs can place significant pressure on retirement savings.
This is where long-term care insurance can serve as a meaningful financial buffer. Long-term care insurance helps support not only the individual receiving care but also their family, who often shoulder the physical, emotional, and financial burden of caregiving. Purchasing a policy in one’s 50s or early 60s allows enough time to build benefits that can help cover a wide range of services—from in-home assistance with daily activities such as bathing, dressing, and meal preparation to extended stays in assisted living or nursing home facilities. By carving out resources specifically for care-related expenses, retirees can better preserve their income and the assets they have worked a lifetime to build.
Conclusion
While no one can predict how markets will behave over the next year or the next 20 years, proactive planning remains one of the most effective ways to protect your income and maintain stability in retirement. Using strategies such as long-term care planning, income diversification, and thoughtful withdrawal approaches can help reduce the risk of financial shortfalls later in life.
Because everyone’s situation is different, it is essential to work closely with a financial advisor who can tailor strategies to your needs, goals, and health considerations. A personalized plan can help safeguard your financial well-being and support the legacy you wish to leave for your family.
If you are approaching retirement or beginning to think about your future, we encourage you to reach out to your advisor and ask for a plan designed to support your financial security today and for years to come.
1. De Vise, D. (2025, September 3). Seniors risk outliving their retirement savings in these 41 states. USA TODAY. https://www.usatoday.com/story/money/2025/08/28/seniors-outlive-retirement-savings-social-security-401k/85821717007/
2. GOBankingRates. (2025, October 1). What social security could look like in 2035. Nasdaq. https://www.nasdaq.com/articles/what-social-security-could-look-2035
3. Kawashima, C. (2025, November 19). Health care costs in retirement: Are you prepared? Schwab Brokerage. https://www.schwab.com/learn/story/health-care-costs-retirement-are-you-prepared
4. Office of Behavioral Health, Disability, and Aging Policy (BHDAP), Johnson, R. W., & Dey, J., Long-Term Services and Supports for Older Americans: Risk and Financing, 2022. United States Department of Health and Human Services. Retrieved from https://aspe.hhs.gov/sites/default/files/documents/08b8b7825f7bc12d2c79261fd7641c88/ltss-risks-financing-2022.pdf.
