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The Scary Plight of Going Broke in Retirement

BOSTON (TheStreet) -- A survey by Allianz Life Insurance of North America this past summer found that among a sampling those ages 44 to 75, more than three in five said they worry more about running out of assets than dying.

The upside of such fears is that they may spur a more serious savings strategy. The considerable downside, however, is that some of these spooked respondents may see their premonition come true.

So what happens if, into your retirement, you run out of money? What options are you left with?

"You hope you have good family and good services in your community and that sort of thing," says Noel Abkemeier -- a retirement actuary for Milliman and an active member of the Society of Actuaries. "Of course when your account runs dry, hopefully you still have Social Security coming in your direction."

One in six older Americans lives below the federal poverty line, according to a recent government analysis.

At 16%, the proportion of seniors living in poverty is higher than the proportion of all Americans in poverty, according to the Supplemental Poverty Measure Research, an alternative calculation from the U.S. Census Bureau that factors in such traditionally overlooked costs as out-of-pocket medical expenses and taxes that can affect those on fixed incomes.

"Millions are suffering and millions more are living on the edge of a financial crisis," says Sandra Nathan, of the National Council on Aging, a nonprofit service and advocacy organization. "Many seniors desperately need help assessing and navigating the options available to assist them in getting on a pathway to economic security, to meet their basic needs, survive an emergency and afford medical care."

Cash in your assets
The first move, when you see your proverbial tank is running on empty, is to refuel if you can. Take stock of any and all assets that can be made liquid.

In the past, if you owned a home it would be a logical step to put it on the market and move to a more affordable apartment. That may still be an option, but the current housing market may mean you suffer a loss, comparatively, to what that property might have fetched a few years ago.

An alternative is a reverse mortgage, which will provide immediate access to the equity in your home. Carefully review any such arrangement before signing off to ensure that the terms meet your short- and long-term goals.

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