Retirement Expert: 67% of Americans Fear Running Out of Money More Than They Fear Dying
Most Americans say they fear running out of money more than dying, but the unsettling part is that even people with millions in the bank share that fear. A single number in your retirement plan determines whether that fear is…
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Financial planner Wes Moss opens his book The Retire Sooner Method with a question: “So what’s really keeping Americans up at night?” His answer comes from Allianz Life research showing that 64% of Americans worry more about running out of money than death itself.
He notes that “that worry has real consequences on sleep quality.” He supports this with a survey from the American Academy of Sleep Medicine. In it, 66% of people said they sometimes, often, or always lose sleep over money.
For people in their fifties and sixties, the cost goes beyond lost sleep. Fear can lead retirees to spend too little. Moss warns that those who play it too safe “may end up spending far less than you need to, making lifestyle sacrifices that simply aren’t necessary.”
Why Millionaires Still Lose Sleep Over Money
Moss’s own survey shows the fear often has little to do with actual wealth. Among Americans with $100,000 to $499,999 in investable assets, 51% call running out of money a top concern. For those holding $500,000 to $999,999, the share drops to 45%.
Among people with $1 million to $2.9 million, 39% still list it. Even 24% of those with $3 million or more share the concern.
Moss describes that last group: “That’s like having a full tank of gas and worrying you won’t make it across town.” The fear stems from not knowing whether savings can support a retirement lifestyle.
Your Withdrawal Rate Decides Whether the Fear Is Justified
One number determines whether the fear is justified: your annual withdrawal rate. Moss’s book includes a table from Capital Investment Advisors, built on Bloomberg data, showing the odds that a portfolio lasts 30 years after inflation.
A $1 million portfolio with a 4% starting withdrawal yields $40,000 in year one, going up annually with inflation.
With a 60% stock and 40% bond mix, that plan lasted the full 30 years 100% of the time. No historical reason to lose sleep.
Raise the withdrawal rate to 5% and the success rate drops to 83%. At 6%, it falls to 67%. Now the fear matches the math.
That’s why Moss calls the 4+ percent rule of thumb “the biggest antidote to running out of money.” He treats it as a range: take about 5% in strong market years, less than 4% in rough years, leaning on cash and bonds.
(The 4% figure came from research done decades ago in a very different market. We made the full case for an income-first alternative in a free guide here: The 4% Rule Is Broken.)
Moss is managing partner and chief investment strategist at Capital Investment Advisors, a fee-only SEC Registered Investment Adviser with over $8.1 billion in assets under management.
Taking listener questions at wesmoss.com/ask, Moss lays out the framework in The Retire Sooner Method.
Four Benchmarks for Reaching the Money Green Zone
Moss says four goals together get you to what he calls the Money Green Zone:
- A $1 million nest egg. $1 million or more in liquid investable assets (cash, CDs, brokerage accounts, and IRAs, excluding home equity), according to The Retire Sooner Method (Greenleaf Book Group).
- Multiple income sources. Income sources totaling $100,000 or more (Social Security, pensions, portfolio withdrawals), according to The Retire Sooner Method (Greenleaf Book Group).
- Mortgage payoff within nine years. A payoff within nine years or fewer eliminates your largest fixed bill, according to The Retire Sooner Method (Greenleaf Book Group).
- A sustainable withdrawal rate. The 4+% rule turns the first three goals into reliable annual income, according to The Retire Sooner Method (Greenleaf Book Group).
Steps to Take Before Your Next Sleepless Night
- Add up your liquid assets. List every account you could tap within days and multiply by 4% to get your starting annual withdrawal.
- Figure other income. Get your Social Security benefit from SSA.gov and add pension income. Compare the total with the $100,000 goal and your actual spending.
- Check your mortgage timeline. If payoff is more than nine years away, $200 to $500 per month in extra principal can take years off the loan.
- Write down your plan. Document your withdrawal rate, asset mix, and cash reserve so you have rules to follow when markets drop.
This fear can be fixed. Moss’s research shows unhappy retirees are twice as likely as happy retirees to worry about running out of money. A sustainable withdrawal rate and a written plan give retirees rules to lean on when markets turn.
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Jake has been been working in financial media for almost 15 years. He focuses on all things personal finance for 24/7 Wall St. with high hopes to educate and entertain. Most recently, Jake spent 12 years working various roles at The Motley Fool. He started copy editing fool.com content, worked on premium and marketing campaigns, and helped launch The Ascent, a personal finance brand.
His work has been featured on platforms like MSN, Yahoo Finance, USA Today, and more. He's written about credit cards, social security, ETFs, savings accounts, and just about anything else you can imagine when thinking about money. Jake love to cook, play golf, and tell people he's never had a cavity. (It's true!)
