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By Jean Chatzky

You know the classic fear of running out of money in retirement? You probably do — more than 60 percent of us fear running out of money in retirement more than we fear death, according to a survey by financial firm Allianz. Turns out those worries are unfounded for the majority of current retirees— a recent BlackRock study has uncovered that nearly 20 years into retirement, most retirees still have 80 percent of their pre-retirement savings. It’s not just that they didn’t get the memo that “you can’t take it with you” — according to the study, these retirees have been incredibly thoughtful about making their money last: They’re great at sticking with a budget, they actively don't want to spend down their assets, and they’re risk averse.

“After a lifetime of hearing ‘save, save, save,’ many retirees start to savor financial security over spending,” says Anne Ackerley, head of BlackRock’s U.S. & Canada Defined Contribution group. “Even so, we were surprised by the findings, and we started to think, is this a good thing or a bad thing?” Of course, there’s an upside to not outliving your money. On the other hand, if the way you’re doing that is by scrimping through the last 30 years of life, that’s not good either.

Compounding the conundrum, no matter how much you have saved, longevity is both misunderstood and hard to predict, as are future health expenses. So while some retirees can start enjoying their money a bit more, others still need to conserve. The big question is: Where do you fall?

Caution for future retirees

Folks headed into retirement over the next couple of decades probably won’t be able to retain as much of their savings as the group of retirees BlackRock studied. Why? Well, a few things: They have less money saved overall, the market leading up to their retirement hasn’t been as strong, and a much lower percentage of them have pensions, Ackerley says. “That combination of economic factors has us with a different situation for today’s retirees. The shift from pensions to 401(k) plans means that people won’t have that monthly check — they’ll have a pool of assets, and they’ll have to figure out how to spend them down.”

Additionally, future retirees will face higher healthcare costs, including those for long term care, cautions Chris Schaefer, head of retirement plan practice at MV Financial, based in Betheseda, MD. From 2006 to 2016, average healthcare deductibles increased from $303 to over $1,200, and total out of pocket spending rose by 54 percent, from $525 in 2006 to $806 in 2016, according to Kaiser. Those numbers are only going to increase as the years pass, Schaefer says.

How everyone can make their money last

David Peterson, CFP and managing director of United Capital in Denver, is optimistic. He says that his clients all recognize there will be higher costs in their future, and as a result most of them have taken steps to increase their 401(k) contributions. “It used to be that they would only put in enough money in to get the match, but now they’re seeing that the match is the minimum you should do.”

Beefing up all your accounts is a great step towards kissing retirement money worries goodbye — here are a few others.

  • Don’t put your child’s college education ahead of your retirement. “It’s like on an airplane — you have to put your mask on first before you can help others. Your retirement savings are the most important thing you can do for yourself,” Schaefer cautions.
  • Don’t relocate (or downsize) without doing your homework. “I’ve seen folks move to Florida or North Carolina and then in six months, they decide to move back home, but this puts them behind the 8-ball financially. If they had done their research, they wouldn’t end up in that position,” Schaefer says.
  • Pay off your mortgage. Go into retirement as debt-free as possible, Schaefer says. If a third of your income is going towards paying off your mortgage, your budget is going to be tight.
  • Understand how much you have in your accounts and how many years’ worth of living expenses your money will buy you. “$500,000 sounds like a lot of money, but if it has to last you till you’re 100, you might not have enough,” Ackerley says. A financial planner can help you work through the math.
  • Consider buying your own pension. One way to insure (literally) that your money will last as long as you do is by converting a portion of your assets at retirement into a paycheck using an insurance product called an immediate annuity. It’s not the right move for all of your assets — or all people — but it is a good way to make sure your fixed costs will always be covered.

Most importantly, don’t be afraid to enjoy

“You’re always going to be doing a balancing act between spending too much and not spending enough,” Peterson says. “If you want to travel early on in retirement, do it, because you may not be able to travel later. It’s important that you spend your money while you’re well enough to do things you enjoy, or you’re going to have regrets. It’s our life experiences, not our possessions, that mean the most to us, that we remember.”

With Kathryn Tuggle

HOW TO SAVE MORE MONEY

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