Running short of retirement savings is a top fear for most Americans, and unfortunately it's a justifiable concern, as many people have too little saved for their later years. In fact, the Center for Retirement Research has warned that around half of all households throughout the country run the risk of outliving their savings. 

If you've got a long time left until retirement, you can avoid this undesirable fate by making sure you're saving a substantial amount for retirement -- around 15% of income or more. But if you're nearing retirement, you may not have time to bulk up your savings account to ensure your money lasts.

Whether you find yourself struggling to save more or you're too close to retirement to change course, there is one thing you can do to significantly reduce your chances of running short of cash: Work until you're 70. 

Older woman at work stocking shelves.

Image source: Getty Images.

Working until you're 70 makes running out of money much less likely

While running out of retirement money is a very real risk for half of American families, the Center for Retirement Research found that working until the age of 70 drops that risk by half. That makes a lot of sense. After all, if you put in all those extra years on the job:

  • You'll have a lot more time to save money, so you can bulk up your investment accounts
  • You can delay claiming Social Security, as waiting until 70 maximizes your monthly benefit by enabling you to earn all of the delayed retirement credits available to you
  • You won't have to rely on your savings for as long a period of time, since you'll have income coming in from work for many more years

Just the effect of delaying Social Security benefits alone can be huge, as delayed retirement credits that you start earning after full retirement age can raise the size of your checks by 8% annually. And while you could delay these benefits even if you've quit working earlier, many people wouldn't have enough money to do that, or would run down their investment account balance too quickly if they tried. 

Is it realistic to work until 70?

While working until 70 significantly reduces the chances you'll run short of money in retirement, it's not a viable plan for everyone. Unemployment tends to be higher among older workers -- especially during the COVID-19 crisis and resulting 2020 recession -- so finding a job in the later part of your life may be difficult. You may also have health issues that prevent you from staying in the workforce for so long, or may be forced to leave work before you're 70 because you need to serve as a caregiver for a spouse or for elderly parents. 

Sadly, many people who planned to work well into their 60s or 70s find those plans thwarted for these reasons, thus ending up right back in the situation where they're in danger of running out of money. And even if you can work for so long, you may not want to, as you may prefer to have more time to enjoy life. 

How to make sure you don't have to work until 70

If you don't want to find yourself forced to work until 70, start saving as early as possible and build a budget that prioritizes retirement savings -- even if that means you have to make other sacrifices such as driving an older vehicle

If you're already nearing retirement and it's too late to bulk up your savings much, you can find other ways to make your savings last longer even if you quit work before 70 -- such as relocating to a lower cost-of-living area ASAP. While it may mean having a lower quality of life because you have to keep your investment account withdrawals lower, you may find that's a trade-off you're willing to live with so you don't have to work for quite so long.