Most retirees don’t realize it, but the biggest financial threat isn’t inflation or taxes — it’s outliving your savings.

And new research shows it can happen far faster than people expect.

But there is a strategy that guarantees lifelong income.

Why Retirees Run Out of Money Too Soon

Americans are living longer than ever, which means your nest egg may need to last 25–30 years — or even longer if you reach age 90 or 100. But many retirees spend their savings too fast or hit losses early in retirement, creating a financial chain reaction that can’t be undone.

Researchers warn that retirees who suffer major market declines in their first five years of retirement face the highest risk of running out of money. That early damage — known as “sequence-of-returns risk” — shrinks your portfolio before it has time to grow again.

“It’s not just how much you save — it’s when the losses hit,” one retirement expert explained. “The timing can make or break your entire plan.”

That’s why financial planners now emphasize one powerful solution: creating an income floor that covers your essential expenses for life.

And it’s simpler than most people think.

How to Build an Income Floor That Lasts Forever

The cornerstone of this strategy is delaying Social Security until age 70, which increases your benefit by about 8% per year between full retirement age and 70. No other investment offers a guaranteed return like that.

Next, many advisors recommend placing 20–30% of your retirement savings into immediate annuities — the kind that pay a monthly income for life. Unlike investments that rise and fall, these payments don’t stop as long as you’re alive.

That means your basic needs are covered no matter what the market does.

Finally, retirees should keep 3–5 years of living expenses in stable assets such as high-quality bonds or Treasury Inflation-Protected Securities (TIPS). This cash buffer lets you pay bills during a downturn without selling stocks at a loss.

These three layers — Social Security, lifetime annuity income, and a stable reserve — form a powerful shield against market volatility and longevity risk.

It’s the one strategy researchers agree prevents retirees from ever running out of their core income.

And it works even if you live to 100.

This approach also provides emotional relief. Retirees with guaranteed income sources report higher confidence, lower stress, and less fear of overspending. Knowing that your essentials — housing, food, healthcare, and transportation — are covered for life frees you to invest and enjoy the rest.

As more Americans enter retirement with 401(k)s instead of pensions, this income-floor strategy is becoming the new blueprint for lifetime security. It blends stability with growth, protecting your future without sacrificing the opportunity to build wealth.

Outliving your savings doesn’t have to be the biggest fear in retirement — not if you set the right foundation now.