One of the biggest questions about retirement is figuring out how much you’ll need to live on. There is no one-size-fits-all number, as not everybody has the same debts, health, hobbies, aspirations and spending habits.
Then there’s age, a big factor that’s overlooked, mainly because we have little control over it. Some people don’t make it past 70, while others live until they’re 100. This can have a huge bearing on how much you need to save for retirement.
The topic of life expectancy is keeping Christine up at night. Christine is 63, has an annual salary of $120,000 and is poised to retire in two years with about $750,000 in retirement savings. She also owns her own home, and projects that she’ll spend about $60,000 in retirement per year.
Christine thought she’d have enough until she considered that her mother lived until 96. She’s done the math and is worried her retirement savings won’t last past the age of 90. Christine has no children to depend on to supplement her income should she live into her 90s, and has found herself wondering what happens to elderly people when they run out of money.
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Does Christine have enough?
Christine, despite her worries, is better prepared for retirement than most. According to the Fed, Americans between the ages of 65 and 74 have an average of $609,230 saved for retirement [1]. Empower, meanwhile, reports that the average 401(k) balance for people in their 60s is $568,040 [2].
Christine can take comfort from the fact that her savings are a little better than average. She is, however, short of recommended savings targets. Fidelity, for example, claims that individuals planning to retire at 65 should have saved at least 12 times their salary [3], while T Rowe Price says the minimum savings to retire at 65 should be 7.5 times salary [4].
Social Security can help narrow that gap. The average payout from Social Security to retired workers, as of July 2025, is about $2,006.69 per month on average, which will supplement Christine’s projected spending [5]. However, the actual figure can vary depending on the age Christine accesses these benefits and her lifetime earnings.
Current figures show that retirees typically spend $5,000 per month in retirement, which aligns with Christine’s $60,000 per year targeted spending. Using the 4% rule, Christine will be able to draw down her savings at a rate of $3,541 per month until age 90. Assuming she receives the average Social Security benefit, she should have more than her projected monthly budget to work with.
Read more: I’m almost 50 and have nothing saved for retirement — what now? Don’t panic. These 6 easy steps can help you turn things around
How to manage retirement spending
Not all retirees can look forward to having their savings and Social Security payout reach the $5,000 mark each month. While the average 401(k) balance for people in their 60s is $568,040, the median balance is only $188,792, according to Empower, meaning most people will have very little to supplement their Social Security check in retirement.
For those who are less prepared for the future, there are a few options to consider in order to boost your savings:
- Delay retirement: Working even a couple of extra years can help you sock away more cash in your retirement funds and delay your Social Security benefit so that you can get a larger monthly payout. Those who delay until the age of 70 can receive 124% of their monthly benefit.
- Look for other savings vehicles: If you can contribute to a Roth IRA or other investment type, it can give you an extra income source in retirement, even if it’s a small one.
- Re-evaluate your retirement spending: While the average monthly spend reported by the Bureau of Labor Statistics is a good benchmark, can you do a little better in your monthly budgeting? Consider trimming down expenses, or even moving to a less costly area to bring down your overall cash needs in retirement.
Selling your home
As Christine owns her own home, she has a valuable asset that she can convert to cash for her retirement. Selling her home may make her feel more relaxed about her retirement savings, though there is an emotional component to leaving the place you’ve lived in so long.
Aging in place is becoming more popular, especially as the baby boomer generation hits retirement. However, while it may sound economical to stay in the home you own outright so that you don’t have to pay rent, consider the costs of owning a home. Any major repairs needed will have to come out of your retirement savings, and most seniors don’t realize that, as they age, they may need significant modifications to their home to make it more accessible. This might include ramps, a stairlift and modifications to the bathroom to improve safety.
Aging in place also means that healthcare costs will be high, as in-home nursing is more expensive and is not always covered, or only partially covered, by Medicare.
So while it may be a wrench, retirees should consider selling their loved home and looking into other living options. This may mean a retirement community for seniors, where apartments are designed for accessibility, or a long-term care home if their health doesn’t permit them to live independently.
The worst-case scenario
While Christine can sell her home to alleviate her money worries, fears about running out of money due to a long illness are justified. What happens when someone has no more savings and is entirely dependent on Social Security?
If Christine runs out of money and is assessed as low income, she can apply for Supplemental Security Income (SSI) in addition to her regular Social Security benefits. A social worker or other advisor can help her find programs like state or federal funding, or assistance from Medicaid to help cover the remaining costs of her care and maintenance.
Alternatively, if Christine develops dementia or another debilitating disease that prevents her from adequately caring for herself, she can become a ward of the state [6]. The State is then empowered to make financial and health decisions on her behalf. An appointed guardian will ensure that she receives appropriate medical attention and has the support needed to maintain quality of life.
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Article sources
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[1]. Investopedia. “Average retirement savings by age: How do you compare?”
[2]. Empower. “The average 401(k) balance by age”
[3]. Fidelity. “How much do I need to retire?”
[4]. T Rowe Price. “You’re age 35, 50, or 60: How much should you have saved for retirement by now?”
[5]. Social Secuirty. “Research, statistics & policy analysis”
[6]. Montana Elder Law. “How does an elderly person become a ward of the state”
This article originally appeared on Moneywise.com under the title: I’m 61 and plan to retire in 2 years with $750K — but I’m terrified of running out of money. What should I do?
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