Worried You'll Run Out of Money in Retirement? Don't Do This.

One of the biggest fears retirees face isn't a stock market crash, unexpected expenses, or health problems -- it's the possibility of outliving their savings. And that concern is understandable.

After all, once you're no longer earning a paycheck, your nest egg might have to last for decades. And there's no guarantee how long your retirement will be.

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But there's one mistake you might risk making in an effort to preserve your retirement savings. And it's something that could have a truly negative impact on your senior years.

Don't let fear stop you from enjoying retirement

Many retirees are so worried about running out of savings that they underspend year after year. But if fears of running out of money cause you to do things like pass up vacations, limit yourself to low-cost hobbies only, and defer home improvements indefinitely, you may end up doing yourself a serious disservice.

It's important to do what you can to make your retirement savings last. But if you deny yourself happiness along the way, you're not winning the game by any means.

And it's not just the lack of spending that's a problem. It's also the constant worrying. You don't want to spend your senior years stressing about money. That's just not a great way to live.

Create a withdrawal plan you feel comfortable with

It's definitely not a good idea to spend recklessly in retirement. If your savings run out and you're forced to live only on Social Security, you could end up in a tough spot financially.

But you also don't want to underspend year after year due to fears of running out. And if you create a solid spending plan, you may change your mind about how you use your money.

That plan should start with a smart baseline withdrawal rate. You can consult a financial advisor to come up with a safe rate based on your investment mix, income needs, and other factors.

From there, create a cash cushion that enables you to leave your portfolio untapped during market downturns. You may decide that two to three years' worth of cash offers adequate protection. Or you may decide on more cash or less.

Of course, even with these safeguards in place, there's no guarantee that your money will last as long as it needs to. But having a plan could significantly reduce the risk of you running out. And that could be your ticket to actually enjoying the money you worked so hard to save rather than spending your senior years worrying about it disappearing.

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