Why You’re Wasting Your Time Worrying About Running Out of Money

Here’s a stat that will probably surprise you: the vast majority of retirees still have at least 80% of their savings after two decades in retirement.

And here’s another one: married couples aged 65 and older withdraw an average of just 2.1% annually from their retirement savings, when current research suggests a safe withdrawal rate is around 5%.

Now here’s the OMG moment… 48% of UK retirees and 51% of US retirees are terrified they’re going to run out of money.

Do you see the problem here?

You’re not going to run out of money. Almost nobody does. But you’re going to spend your retirement years worrying about it anyway, denying yourself experiences and joy, living small when you could be living fully, all to protect against a disaster that probably isn’t coming.

Let me be really blunt… you’re wasting your bloody time.

The Fear That Dominates Retirement

The fear of running out of money is the monster under every retiree’s bed.

It sits in the background of every financial decision. Every holiday you consider booking. Every restaurant meal. Every gift to your grandchildren. Every time you think about replacing something that’s worn out or upgrading something that still “works.”

Can we really afford this? What if we run out?

This fear is so pervasive that researchers in the US found nearly half of American retirees would rather die than run out of money. Think about that for a second. Death is preferable to financial insecurity.

And I get it. The fear feels rational. You’ve spent decades saving for this moment. You no longer have a salary coming in. You’re watching your nest egg every month, and every pound you spend feels like a pound lost forever. You don’t know how long you’ll live. You don’t know what disasters might happen.

Healthcare might get expensive. Care homes are terrifying. The markets could crash.

So you hold on tight. You spend carefully. You protect what you have.

And in doing so, you’re solving a problem that doesn’t actually exist for most people.

The Reality: You Probably Won’t Run Out

Let’s look at what actually happens to retirees and their money.

Research from BlackRock found that after 20 years in retirement, the vast majority of retirees still had at least 80% of their original savings. Not 80% spent… 80% remaining.

A study by T. Rowe Price showed that one-third of retirees actually have higher balances partway through retirement than when they started. They’re not spending down… they’re still accumulating.

Analysis from the Institute for Fiscal Studies in the UK found that retirees’ spending remains relatively constant or even increases slightly through their 60s and 70s, before levelling off—not because they’re running out of money, but because their needs and desires naturally shift as they age.

And perhaps most telling: research by David Blanchett and Michael Finke discovered that 65-year-old couples are spending just 2% of their savings annually, over half of a 5% ‘safe’ withdrawal rate.

Think about what this means.

If a 5% withdrawal rate gives you a 95% chance of not running out of money over 30 years, then spending 2% means you’re building in a safety margin so large you’re virtually guaranteed to die with most of your wealth intact.

The data is clear: the problem isn’t that retirees are running out of money. The problem is that they’re not spending it.

Why We’re Wired to Worry

So if the data says we’re not going to run out, why are we all so terrified that we will?

Because we’re human. And humans are terrible at this stuff.

Our brains are wired for survival, not abundance. For most of human history, resources were scarce. The people who survived weren’t the ones who spent freely; they were the ones who hoarded, who worried, who prepared for famine and drought and disaster.

That’s in your DNA. The anxiety you feel about spending money isn’t irrational from an evolutionary perspective; it’s your brain trying to keep you alive.

The problem is, you’re not trying to survive a famine. You’re trying to enjoy retirement. And the instincts that kept your ancestors alive are now making you miserable.

We also suffer from loss aversion. Research shows that the pain of losing money is roughly twice as severe as the pleasure of gaining it. Every time you spend from your savings, your brain registers it as a loss. Even if you’re spending on something wonderful, even if you can easily afford it, the emotional hit of watching your balance go down overrides the rational knowledge that this is what the money is for.

Add to that the absence of a salary - for decades, you had money coming in to replace what you spent. Now you don’t. Every pound spent feels permanent. Final. Gone forever.

And finally, there’s the unknown lifespan problem. You don’t know if you’ll live to 75 or 105. And because you don’t know, your brain defaults to planning for the worst-case scenario. You optimise for living to 105, needing expensive care, facing every possible disaster, even though the odds of all of that happening are vanishingly small.

The result? You live like you’re broke even when you’re not. You deny yourself experiences and joy to protect against a future that will probably never come.

The Studies That Got Everyone Panicking

You might be thinking: “But wait, I’ve seen headlines saying 45% of people will run out of money in retirement!”

You have. Those studies exist. And they’ve done enormous damage.

Here’s what those studies actually say… and what they don’t.

The Morningstar study that generated that alarming 45% figure was a simulation model. A computer projection based on assumptions about spending, returns, healthcare costs, and longevity. It’s a model of what might happen, not what actually happens to real retirees.

And crucially, the model assumes people will maintain constant inflation-adjusted spending throughout retirement regardless of circumstances. It assumes they won’t adapt, won’t adjust, won’t modify their plans when markets dip or when their spending needs change.

But that’s not how humans actually behave.

Real retirees, faced with a market downturn, don’t blindly keep spending at the same rate. Research shows that 65% of retirees would simply spend less during a downturn, and only 8% would maintain their current spending by dipping into savings.

Real retirees don’t maintain constant spending. UK data shows that spending naturally declines in real terms as people age, not because they’re running out of money, but because their needs and desires change. Travel decreases. Energy decreases. The desire to acquire stuff decreases.

The “45% will run out” headline is based on a model that assumes robotic, inflexible behaviour. And when researchers look at what actually happens to real retirees with real money and real human behaviour, they find the opposite: most people die with most of their money still intact.

The Tragic Irony

Here’s the cruellest part of all this: the fear of running out of money causes you to live exactly the life you were trying to avoid.

You saved for decades so you could have freedom, security, and the ability to enjoy your later years without financial stress. You wanted to travel, spend time with loved ones, pursue hobbies, live comfortably, and say yes to experiences.

But the fear of running out makes you say no to all of it.

You don’t take the trip because “maybe we should wait and see how the markets do.” You don’t help your grandchildren because “we need to preserve capital.”You don’t upgrade your worn-out car or sofa because “this one still works.”You don’t go to the nice restaurant because “it’s a bit extravagant.”

And so you end up living small, carefully, anxiously, experiencing the very financial stress and constraint you spent 40 years trying to avoid.

The money sits there, growing, compounding, increasing, while you get older, less mobile, less energetic. The window for adventure closes. Your health declines. Your grandchildren grow up. The experiences you could have had slip away.

And then you die. With most of your money still in the bank.

I’ve watched this happen too many times. Clients in their 80s, sitting on substantial wealth, filled with regret about the trips they didn’t take, the experiences they denied themselves, the joy they postponed.

They were careful. They were prudent. They were responsible.

And they were miserable.

What You Should Actually Worry About

I’m not saying there’s no reason to be thoughtful about money in retirement. There are real risks. Real things that can go wrong.

But running out of money isn’t top of the list for most people.

Here’s what you should actually be concerned about:

1. Underspending and dying with regret

This is the real epidemic. Study after study shows retirees aren’t spending enough. They’re denying themselves experiences they could easily afford. They’re living below their means not because they have to, but because they’re terrified.

Ask yourself: would you rather die at 85 with £200,000 left in the bank, having said no to a decade of experiences you could have afforded? Or die at 85 with £50,000 left, having lived fully and richly?

2. Not having a plan

The retirees who struggle most aren’t the ones who spend too much; they’re the ones who have no plan at all. No idea what their assets can support. No withdrawal strategy. No guardrails.

If you don’t know what you can afford to spend, of course you’ll be anxious. The solution isn’t to spend nothing, it’s to create a plan that tells you what you can spend with confidence.

3. Making emotional decisions in market downturns

The real risk isn’t that you’ll run out of money by spending too much. It’s that you’ll panic during a market crash, sell everything, and create the very disaster you were trying to avoid.

4. Healthcare and care costs in very late life

Yes, these can be expensive. But here’s the thing: they’re usually a problem for your last few years of life, not your first 20 years of retirement. And by the time they arrive, you’ve often already lived decades of retirement, and your spending needs have naturally declined.

These are worth planning for. But they’re not worth sacrificing two decades of rich living to protect against.

How to Stop Wasting Your Worry

So what do you actually do with this information?

First: Get a proper financial plan.

Not a vague sense of what you have, not a spreadsheet you made five years ago, a real plan, ideally created with a professional, that accounts for your assets, your spending, your goals, and your risks.

A good plan will show you what you can sustainably spend. It will include guardrails—rules for when to spend more or pull back. It will model different scenarios: good markets, bad markets, living to 95, needing care.

And most importantly, it will give you permission to spend. Because when you can see the numbers and understand that you’re not going to run out, the anxiety loses its power.

Second: Reframe what spending means.

Your brain sees spending as loss. Every pound spent is a pound gone forever.

But that’s wrong. Spending money on things that matter isn’t a loss; it’s use. It’s purpose. It’s the entire reason you saved in the first place.

You didn’t save for 40 years so you could stare at a big number in your bank account. You saved so you could do things. Be with people you love. Have experiences. Live comfortably. Support causes you care about.

Money sitting in your account doing nothing isn’t being “preserved”, it’s being wasted.

Third: Focus on spending from income, not assets.

Here’s a fascinating finding from behavioural research: retirees spend about 80% of their guaranteed income (pensions, Social Security) but less than 50% of the income they could safely take from their investments.

Why? Because guaranteed income feels like money you’re allowed to spend. Investment withdrawals feel like you’re “dipping into” your nest egg.

So reframe it. Your investment portfolio is an income source. The 5% (or 4%, or 6%—whatever your plan says) you can sustainably withdraw isn’t “spending down your assets.” It’s your income.

Take it. Spend it. That’s what it’s for.

Fourth: Build in flexibility.

One reason people worry is because they’re planning for a fixed, unchanging retirement. But retirement isn’t fixed. Your spending will change. Your needs will change. The markets will change.

Build a plan with flexibility. Maybe you spend more in your 60s and 70s when you’re active. Maybe you spend less in your 80s when you naturally slow down. Maybe you have guardrails that tell you when to pull back temporarily if markets crash.

Flexibility reduces anxiety because it means you’re not locked into a single path. You can adapt. You can adjust. You’re not going to accidentally “run out” because you’ll see it coming and course-correct.

Fifth: Practice spending.

If you’ve spent 40 years in savings mode, switching to spending mode is genuinely hard. It requires practice.

Start small. Give yourself permission to say yes to one thing you’d normally say no to. Book a holiday. Buy the nicer wine. Help your grandchild with something meaningful.

Pay attention to how it feels. Notice the anxiety, acknowledge it, and do it anyway. Over time, the emotional response will soften. Spending will feel less like loss and more like use.

Sixth: Measure success differently.

Most retirees measure success by how much money they have left. That’s backwards.

The real measure of a successful retirement isn’t dying with the biggest bank balance. It’s living fully, richly, and without regret.

Ask yourself at the end of each year: Did I do the things that mattered to me? Did I say yes to experiences I’ll remember? Did I invest in relationships? Did I live in a way that reflected my values?

If the answer is yes, and you still have money left… you’re winning.

The Waste of a Life Lived Carefully

I’ll leave you with this thought.

Worrying about running out of money costs you time and energy. It costs you experiences and joy. It costs you the very life you saved for.

And the reality is, all that worry doesn’t actually protect you. Because the data shows you’re not going to run out anyway.

You’re spending your precious, finite retirement years worrying about a problem that almost certainly isn’t coming, while ignoring the problem that definitely is coming: time is running out. Your health is declining. Your mobility is decreasing. The window for the life you imagined is closing.

Every year you spend being careful and anxious is a year you can’t get back.

You didn’t work hard to spend your retirement terrified. You worked hard so you could live freely, generously, fully, without the constant stress of financial insecurity.

You have the money. You’ve done the hard part. Now do the harder part: actually use it.

Stop wasting your time worrying about running out of money.

Start worrying about running out of time.

What would you do differently if you knew - really knew - that you weren’t going to run out? What experiences are you denying yourself right now out of fear? I’d love to hear your thoughts.