7 Effective Ways to Combat the Fear of Running Out of Money in Retirement

By AfriNews 247 Editorial Team | Adapted from Investopedia

For many people approaching retirement—particularly those in their 40s, 50s, and early 60s—the fear of running out of money is more terrifying than the idea of death itself. This may sound extreme, but the concern is very real and growing globally.

In fact, a 2025 Allianz study showed that 70% of Gen Xers (born between 1965–1980) fear depleting their savings more than dying. While the study focused on the U.S., this anxiety is universal. Whether you're in Nairobi, New York, or New Delhi, economic instability, rising costs, weak social security systems, and limited pension coverage make retirement planning more critical than ever.

But here’s the good news: You can take charge of your financial future. Here are seven practical and empowering ways to overcome the fear of financial insecurity in retirement.

1. Create a Realistic Financial Plan

The first and most essential step is to develop a clear and realistic financial roadmap. Many people fear what they don’t understand. Having a plan allows you to:

• Estimate your retirement needs

• Identify your income sources (pensions, investments, side income)

• Spot gaps early and make adjustments

Tip: Work with a certified financial planner in your region. If that’s not accessible, try using free online tools or budgeting apps.

2. Take Advantage of Catch-Up Contributions

If you’re over 50, you likely qualify for higher contribution limits to retirement savings plans.

• In the U.S., workers aged 50+ can make additional contributions to 401(k) and IRA plans.

• In other regions, such as the UK, Kenya, Nigeria, Uganda, South Africa, and India, pension systems and savings cooperatives allow for increased voluntary contributions as you age.

Tip: Explore savings schemes in your country that allow voluntary top-ups—these small moves can make a big impact over time.

3. Consider Semi-Retirement or Part-Time Work

Retirement doesn’t have to mean stopping work altogether. Many people choose to work part-time or freelance during their 60s and even 70s.

Benefits include:

• Reduced reliance on savings

• Continued income and purpose

• Social connection and mental stimulation

Tip: Turn a hobby or professional skill into a small business or consultancy service.

4. Get Serious About Budgeting

Knowing where your money goes is essential for financial security. Without a clear budget, overspending is easy—and saving is hard.

• Track your monthly expenses

• Identify areas to cut back

• Reallocate funds to savings and debt repayment

Tip: Use the 50/30/20 rule: 50% needs, 30% wants, and 20% savings/debt repayment. Adjust as needed for your local cost of living.

5. Tackle High-Interest Debt Aggressively

Nothing sabotages retirement plans like credit card and personal loan debt, especially with high interest rates. Prioritize paying off this debt to free up money for savings.

Two popular strategies:

• Avalanche method: Pay off the highest-interest debt first.

• Snowball method: Start with the smallest balance for momentum.

Tip: Once a debt is paid off, redirect that payment to your retirement savings.

6. Automate and Increase Savings Over Time

Consistency beats intensity. Even if you start small, automated savings grow fast over time—especially with annual increases.

• Automate a portion of your salary to go to a retirement account

• Increase your savings rate by at least 1% per year if possible

• Always take full advantage of employer-matching contributions if offered

Tip: Don’t wait for a big raise—start with what you can afford now.

7. Stay Informed and Take Action Early

Financial confidence grows with knowledge and proactive decision-making. Many people wait too long to think about retirement. Start now, even if you're behind.

• Read financial news relevant to your country

• Join local investment groups or cooperatives

• Ask questions—there are no silly ones when it comes to your future

Tip: Fear fades when you take action. The earlier you start, the better your outcome.

Final Thoughts

The fear of running out of money in retirement is understandable—but it’s not inevitable. With planning, discipline, and action, you can take control of your financial future no matter where you live or how much you currently earn.

Whether you’re Gen X, a millennial, or approaching your golden years, these seven steps offer a clear path forward. Start today—and retire with confidence, not fear.

Disclaimer:

This article is adapted from original reporting by Investopedia, written by Lucy Lazarony and fact-checked by Suzanne Kvilhaug. The content has been localized and repackaged by the AfriCareers Editorial Team to reflect broader international relevance.