Retirement Income · Cautionary Stories

The money doesn't run out on the last day. It runs out because of decisions made in year one.

Most retirees don't run out of money because markets crashed. They run out because of small choices, compounded over time. Here are four.

Educational only. This content is general retirement education — not personalized financial, tax, or legal advice. Every situation is different; if you'd like Ebby to look at yours, use Talk With Ebby.

'Will my money last?' is really four questions in disguise: how much you're spending, how the market treats your first years, how inflation grinds at you, and whether a health event blows the plan up. Every retiree who's run out of money got beat by at least one of these.

Scenario 01A cautionary story

The 'go-go years' that never ended

The situation. A couple retired at 63 with $900,000 saved. They spent aggressively in the first four years — RVs, cruises, a second-home down payment — pulling 9–10% a year.

The mistake. They confused 'we deserve this' with 'we can afford this.' No written income plan, no withdrawal guardrails.

The outcome. By age 71, the portfolio had dropped to $410,000 despite decent markets. RMDs at 73 made taxes worse. Their 'slow-go' years now look a lot like their working years — budgeting every month.

Ebby's lesson

The first five years of retirement set the tone for the next thirty. Front-loading spending without a plan is the fastest way to shorten your money's life.

Scenario 02A cautionary story

Retired into a bad market and kept withdrawing

The situation. A retiree left work in early 2008. His portfolio dropped 35% in the first year. He kept withdrawing his planned $4,000/month anyway.

The mistake. He didn't have a cash buffer or a plan for down markets. Selling shares at the bottom locked in losses he never recovered from.

The outcome. Even after markets recovered, his portfolio never caught up. He ran out of investment savings at 82 and now lives on Social Security alone.

Ebby's lesson

This is 'sequence of returns risk.' What matters isn't just average returns — it's when the bad years happen. A 1–2 year cash buffer for spending is not conservative; it's survival.

Scenario 03A cautionary story

Ignored inflation because 'we're frugal'

The situation. A modest couple built a plan around spending $4,500/month, forever. They assumed inflation wouldn't hurt them because they didn't spend much.

The mistake. They forgot that healthcare, property taxes, insurance, and groceries don't care how frugal you are.

The outcome. Ten years in, that same lifestyle cost $6,100/month. Their withdrawals kept climbing and their portfolio couldn't keep up. They ended up house-rich, cash-tight.

Ebby's lesson

Any plan that assumes 'we'll just spend the same amount' is not a plan. Build inflation into the numbers before retirement, not after.

Scenario 04A cautionary story

Long-term care wiped out the plan

The situation. A widow was doing fine on her own — until a stroke put her in memory care at $8,500/month.

The mistake. Neither she nor her late husband had planned for long-term care. Medicare doesn't cover it. They assumed 'the kids will figure it out.'

The outcome. The kids had to sell her home to pay for care. Her plan to leave something to her grandchildren evaporated inside 30 months.

Ebby's lesson

A retirement plan that ignores long-term care isn't a plan — it's a hope. Even a modest plan for it (insurance, self-funding earmark, family conversation) beats no plan.

The takeaway

A written income plan doesn't have to be complicated — but it has to be written. Withdrawal rate, cash buffer, inflation assumption, and a long-term-care answer. Put those four things on one page and you've done more than most.

Ask Ebby your version Explore the Retirement Income Center →

Have a question?

Ask Ebby a retirement question.

Type your question — get an honest, educational answer in Ebby's voice. No sign-up. No sales pitch. No obligation.

Ask A Retirement Question Talk With Ebby