Featured Post from Retire with Equity

Fear Of Running Out (FORO)

How neuroscience explains how we sabotage spending in retirement

Mar 28, 2025

10 min

Sue Pimento

Summary: The article explores the Fear of Running Out (FORO), a psychological phenomenon that stems from anxiety about resource scarcity, particularly in retirement. FORO is especially common among seniors who fear depleting their financial, physical, or emotional resources as they age. Unlike FOMO (Fear of Missing Out), FORO focuses on the depletion of existing assets, often leading to cautious decision-making, delayed spending, or self-sabotaging behaviours like excessive frugality or social withdrawal. While some instances of FORO are valid—such as retirees who underestimated their living expenses—others are more psychological, with financially secure individuals still feeling paralyzed by fear and unable to enjoy their retirement fully.  There are practical solutions, but they require more than just emotional support.  We also need to address the lack of formal retirement planning and literacy.  Most retirees have insufficient knowledge about tax-efficient asset drawdowns, and the limited guidance from financial institutions exacerbates these fears.


We’ve all heard of FOMO (fear of missing out)—that nagging anxiety when everyone else seems to be at a fabulous party while you’re at home scrolling through social media, eating last night’s leftovers straight from the container.


As we age, the fears we carry evolve—and for some, they get a little louder, quirkier, and much more challenging to ignore. A unique set of acronyms has emerged for older adults to describe these creeping anxieties. Allow me to introduce you to the unholy trinity of aging fears:


FOGO (Fear of Getting Old): This one typically kicks in around our mid-to-late 50s when the realization hits and panic sets in: "Wait... I’m not young anymore?" Have I saved enough? Have I experienced enough? Am I running out of time? Cue the classic symptoms: splurging on bright red sports cars, embarking on bucket-list trips to exotic locales, or dating someone who knows what "Netflix and chill" really means, not cozying up with a movie. And yes, sometimes while still married. It’s all part of the "midlife crisis" package—a desperate attempt to outrun Father Time. But let’s be honest: The comb-over isn’t fooling anyone.


FOBO (Fear of Being Old): This stage sneaks in during your 70s, as your "best before" date blinks ominously on life’s metaphorical packaging. Many enter into a state of "defensive denial," 

refusing to acknowledge their age or any limitations, insisting they are still as capable as ever, even when struggling with specific tasks.  In this stage, people can demonstrate "overcompensation - Desperately trying to prove they’re still youthful.  Many will refuse to use mobility aids or decline assistance from family or caregivers out of pride.  Others will shut down anyone who dares to suggest they are old. “Me? Old? Please. I just got a brand-new hip last year!”


FORO (Fear of Running Out): Now we get to the show's real star. FORO enters the spotlight as you thoughtfully consider retirement and suddenly takes over the plot. It’s the fear of running out—of money, energy, time, or maybe even snacks at movie night. This one’s a relentless buzz in the background of every decision, from how you spend your savings to whether you should buy name-brand peanut butter or settle for the generic jar. If left unchecked, FORO can steal the joy out of today by worrying too much about tomorrow. We have all heard the stories of people passing away with millions of dollars in the bank, yet they lived in squalor, afraid to spend their money.


Now, FORO can manifest in all kinds of ways. Some are almost funny in hindsight. Remember the pandemic toilet paper wars of 2020? Or that panic at a party when you’re convinced you don’t have enough food for your guests, only to find yourself drowning in leftovers? But for seniors in retirement, FORO often takes on a much more serious tone—like running out of money, energy, or health as the years go by. These thoughts can be terrifying for the aged. 


And sometimes, this fear is warranted. Imagine a retiree who underestimated their living expenses, burned through savings too quickly, and now faces the stark reality of financial insecurity. That’s a legitimate case of FORO that demands attention, planning, and maybe a shift in lifestyle.


But other times, FORO is more like a shadow in the dark—unsettling at first glance but harmless once illuminated. For example, some seniors with reasonable pensions, savings, and even supplemental income streams might still be too paralyzed by the fear of running out to take that dream vacation or help their grandchildren with school. In this situation, it is doubtful that there will ever be enough. This type of FORO can cause harm through neglect. This unfounded FORO can keep people from genuinely thriving during their golden years.


There are well-documented cases of individuals who have perished from thirst in the desert while carrying full bottles of water. They were too frightened of running out of water to save their lives by drinking it. Most of us shake our heads and think we would never do that, but FORO represents a compelling fear that can lead to self-sabotaging behaviours. If FORO could result in death in the aforementioned desert scenario, how might it influence decisions regarding our significant assets, such as our homes? Unfortunately, many retirees pinch pennies and go without while living in homes with considerable equity, refusing to access it for fear of running out (FORO).


So, how do we know when FORO is a valid warning signal and when it’s just a psychological hurdle? And, more importantly, how can we tackle this fear to ensure it doesn’t stand in the way of living a joyful, fulfilled retirement? Read on; we’ll dive deeper into the concept of FORO—why it exists, how it can sneak into our decision-making, and, most importantly, actionable strategies to manage it.


Remember, your golden years shouldn’t be ruled by fear—they should be a time to shine.


The Fear of Running Out (FORO) is a psychological concept rooted in anxiety about scarcity or insufficiency, particularly concerning essential resources like money, time, or opportunities. It's akin to FOMO (Fear of Missing Out), but instead emphasizes the anxiety of depleting one's existing resources rather than worrying about missed experiences.


While FORO has not been as widely studied as FOMO in academic circles, the term has gained traction in financial and psychological contexts, particularly regarding retirement planning, economic behaviour, and decision-making. Although it’s unclear who explicitly popularized the term “Fear of Running Out,” it has become a recurring theme in financial planning discussions and among behavioural psychologists studying how individuals manage uncertainty and risk.


The Psychology of FORO


FORO is deeply rooted in psychological concepts of scarcity and loss aversion, both key ideas in behavioural economics. Loss aversion, central to Daniel Kahneman and Amos Tversky’s prospect theory, highlights that the pain of losing something outweighs the joy of gaining an equivalent amount. In the context of retirement, the fear of running out of money reflects this principle—financial depletion carries the weight of losing essential aspects like security, independence, and quality of life, making it feel particularly distressing.


The work of researchers like Eldar Shafir and Senthil Mullainathan on the scarcity mindset further illuminates this phenomenon. They suggest that when people are preoccupied with avoiding resource depletion, they often develop tunnel vision, focusing narrowly on the immediate issue. For seniors worried about outliving their savings, this can manifest as excessive caution or hesitation in deciding to spend or draw down resources, even when such concerns may not be warranted. Faced with this dilemma, some seniors develop inertia, choose to do nothing, and ignore the situation altogether.


According to a 2024 report by the Ontario Securities Commission, 13% of pre-retirees and 19% of retirees among Canadians aged 50 and older have a formal written retirement plan, which is a significant cause for concern.


This reflects a widespread lack of structured financial and retirement literacy. Without a clear strategy, many individuals may not fully understand how to manage their resources effectively throughout retirement, particularly when it comes to de-accumulating (spending) assets in a tax-efficient manner. We can quickly start to see why many older Canadians have FORO.


One key issue is that minimal accessible information exists on strategies for drawing down retirement savings to minimize taxes while ensuring long-term financial security. For example, the timing and order in which individuals withdraw from registered accounts like RRSPs, TFSAs, non-registered investments, or access their home equity can dramatically impact their overall tax burden and available income in retirement. Unfortunately, this type of guidance is often overlooked in financial planning resources, leaving most retirees guessing how much money is enough.


The financial industry also contributes to this gap. Banks and many financial advisors are primarily compensated through commissions tied to the sale and management of investments, such as mutual funds or other financial products. This model does not incentivize them to provide comprehensive advice on strategically spending down savings. As a result, many seniors are left without the critical guidance they need to navigate the complexities of de-accumulation, leading to suboptimal emotionally driven decisions and increased financial stress.


This lack of tailored advice is particularly problematic for Canadians who rely on paying off their homes as their primary financial plan. While homeownership is a valuable asset, it is not liquid, and converting it into usable retirement income can be challenging without proper planning. The fear of running out of money (FORO) becomes especially acute for these individuals, as they may not have the financial and retirement literacy or tools to make informed decisions about how to fund their retirement, especially concerning using home equity.


In short, the low prevalence of formal retirement plans, insufficient education on tax-efficient de-accumulation, and the misaligned incentives of financial institutions significantly disadvantage seniors. This gap exacerbates financial insecurity and leaves many retirees vulnerable to the psychological and practical challenges of FORO, particularly those who rely on home equity, an illiquid asset, as their primary financial safety net.


Addressing these issues requires a broader emphasis on financial and retirement literacy and unbiased, accessible advice tailored to retirees' unique needs.


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Key Components of FORO:


1. Scarcity Mindset—Seniors facing FORO might develop a scarcity mindset, which can lead to overly frugal behaviours. For example, they may reduce spending on essential support services or forego social activities to protect their savings, even when financially secure.


2. Emotional Triggers—FORO is tied to deeper emotional needs like safety, independence, and legacy. At its core is the fear that people will have nowhere to live, won’t have enough money to care for themselves, and will not have any money left to leave a legacy.


3. Decision Paralysis - FORO can cause retirees to delay allocating resources, from downsizing a home to sourcing pension-type income. This indecision can lead to missed opportunities or unnecessary sacrifices.


4. Overcompensation—In some cases, the fear of running out can lead to self-sabotage behaviours like hoarding money or withdrawing from social activities. These behaviours reduce quality of life and increase feelings of isolation.


The Solution:


A comprehensive approach that combines emotional support, practical planning, and mindset adjustments is essential to helping retirees overcome FORO. By addressing their fears and financial realities, they can gain the confidence to enjoy their retirement years without worrying about running out of money.


1. Acknowledgement and Understanding - Listen and empathize: Begin by genuinely listening to the retiree's concerns, recognizing that FORO is an emotional issue tied to deep-seated fears about security and independence.


Normalize the fear: Reassure them that the fear of running out of money is common, especially in retirement. Explain the reasons behind this fear:

  • Retirees often can’t return to work to supplement income.
  • Lifespans and healthcare costs are unpredictable, creating uncertainty.
  • The transition from accumulating wealth to spending it feels unnatural to many.


2. Develop a Retirement Spending Plan—Create a tailored plan. Outline a sustainable spending strategy aligning with the client's lifestyle, goals, and resources:

  • Leverage expertise: Collaborate with their bank manager or financial advisor to develop a realistic budget covering essential and discretionary expenses.
  • Focus on balance: Establish a balance between meeting current needs and maintaining future security.


3. Generate Pension-Like Income - Explore income solutions: Help them research ways to create predictable income streams, such as:

  • Purchasing an annuity to convert part of their savings or equity into guaranteed income.
  • Consider equity mortgage products for additional cash flow if they have sufficient home equity.
  • Address misconceptions: Explain how these tools can reduce uncertainty and provide peace of mind.


4. Emergency Fund - Health care may be needed later in life and can be costly. Setting money aside for unexpected expenses will offer great comfort and peace of mind.


5. Mindset Shifts - Reframe perspectives: Encourage retirees to focus on the opportunities their resources provide rather than fixating on worst-case scenarios:

  • Promote enjoyment: Remind them that retirement is a time to enjoy the fruits of their labour, not live in constant fear. Highlight the importance of self-care and experiences that bring joy and fulfillment.


6.  Legacy Planning -  Address legacy concerns: Help them create an estate plan or designate resources for loved ones and causes they care about, ensuring their wishes are honoured:

  • Provide clarity: Show how planning for a legacy can reduce anxiety about leaving something behind while meeting their current needs.


The Fear of Running Out is more than just a financial concern—it’s a deeply emotional and psychological issue for seniors facing the unpredictability of retirement. By addressing this fear in practical and empathetic ways, we can give retirees the tools and confidence to enjoy their golden years without worrying about depletion or feeling like they need to stockpile financial "water bottles" for a drought that may never come.


And there you have it—FORO might be a formidable guest at the retirement table, but it doesn’t have to steal the show. By addressing the emotional roots of this fear, creating practical plans, and shifting the focus to what’s possible, retirees can turn their golden years into precisely that: golden. Remember, retirement isn’t about tiptoeing around scarcity; it’s about celebrating a lifetime of hard work and savouring the moments that make life rich. So, let’s leave FORO in the shadows where it belongs and step confidently into a retirement that truly shines.


And let’s be honest, no one wants their legacy to read: "Lived frugally, died rich, and missed the Boat to the Caribbean."



Don't retire---Re-Wire!


Sue

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Sue Pimento

Sue Pimento

Founder | CEO

Focused on financial literacy and retirement strategies. Authoring new book on home equity strategies to help seniors find financial freedom

Pension ReformInterest RatesHome EquityMortgagesReverse Mortgages

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Rebrand the conversation. Words matter. “Mortgage” can feel like failure. Try “home-equity strategy” or “retirement cash-flow plan.” You’re not adding debt—you’re unlocking options. Talk cash flow, not contracts. Focus on income versus expenses, inflation resilience, and emergencies. Discuss how home equity can supplement pensions, create predictable, guaranteed income (like our parents had), and—most importantly—boost that all-important sleep score. Include the family. Adult children often play a major role. Involve them early—these are emotional, multi-generational conversations, not just financial ones. Educate, don’t sell. Show examples, calculators, and real-life case studies. Transparency earns trust—and trust is the true currency in a conversion sale. When brokers shift from “rate pitching” to “retirement planning,” they go from hammer-swingers to problem-solvers—and that’s where the real magic (and business growth) happens. What Mortgage Brokers Bring to the Table The broker market is projected to grow at a 5% CAGR through 2030, driven by consumers demanding personalization over cookie-cutter lending. And the reverse-mortgage space just got a serious glow-up. Home Trust Bank has just entered the market, announcing its new Equity Access Reverse Mortgage product at this week's Mortgage Professionals Conference in Ottawa. That brings the total to four active lenders in Canada’s reverse-mortgage space: HomeEquity Bank, Equitable Bank, Home Trust Bank, and Bloom Finance Company. More lenders mean more credibility—or, as I like to call it, street cred for seniors. The kind that lets retirees walk down the street (or the fairway) with a little swagger, knowing their financial toolkit has options. With more players in the mix comes more choice, sharper pricing, and—most importantly—a sense that reverse mortgage products have finally crossed over from “fringe” to financially fashionable.  Reverse mortgages are no longer the “we-don’t-talk-about-that” cousin at the financial family dinner—they’re sitting proudly at the adult table. The product is being normalized—treated as the legitimate, strategic retirement tool it has always been. So, brokers—be honest. Isn’t it time you caught up to the trend? Reverse mortgages have gone from taboo to totally credible. And if your clients still say, “We’re just not reverse-mortgage people,” that’s your cue to help them unpack that posture of financial marginalization. Because what they often mean is, “We don’t want to feel old, desperate, or dependent.” That’s not who they are—and that’s not what this product is. It’s not about retreating; it’s about reframing. Helping them see home equity as strength, not surrender. Because empowering clients to live comfortably, confidently, and cash-flow secure isn’t just good business—it’s the kind of advocacy that gives everyone involved a little swagger. Older Canadians Need Advocates—Not Just Advisors As a spokesperson for this group, I urge brokers to master Equity Literacy—the ability to explain complex tools like reverse mortgages and HELOCs in plain language. It’s about helping retirees access equity wisely, preserve benefits, and create peace of mind. Canadian reverse-mortgage debt reached $8.2 billion in mid-2024—an 18.3% year-over-year increase. (Source: Office of the Superintendent of Financial Institutions - OSFI). Canadians are catching on: their house can help them, not haunt them (could not resist the Halloween joke). Help seniors understand the range of uses for Reverse Mortgages like paying off high-interest debt, helping family through early inheritance or gifting, and supplementing retirement income to maintain independence. And here’s where brokers can really shine—by guiding family conversations about inheritance, housing, and aging in place. According to CMHC’s 2025 Mortgage Consumer Survey, 41% of first-time buyers used a gift or inheritance to cover mortgage costs.  That's up from 30% the year before. Those gifts averaged nearly $80,000. The Bank of Mom & Dad just got promoted to Wealth Management HQ. To the Canadian mortgage broker industry You’re not just in the mortgage business—you’re in the dignity business. You help Canadians stay in their homes, reduce stress, and live comfortably in retirement. With home sales slowing and fewer purchase deals, this is your moment. Building expertise in the 55+ market isn’t just good karma—it’s good business. How to start: educate your database about equity-release benefits and tax-free cash flow; host workshops on “Aging in Place with Equity”; partner with financial planners, lawyers, healthcare providers—and yes, Realtors—to build a holistic approach to retirement housing. Involve adult children in every conversation; they’re tomorrow’s clients. The data says Canadians need you more than ever. And I’ll say it louder: so do I. Let’s make retirement planning better, smarter, and more human—one conversation at a time. So here’s the truth: the 55+ crowd doesn’t need rescuing—they need respect. They’re not clinging to the past; they’re funding their future. They don’t want pity; they want power—and they’ve earned it. This generation built Canada’s equity base—literally—and now it’s time they get to use it wisely, proudly, and on their own terms. Whether that means a new roof, a family gift, or finally taking that long-postponed trip to Italy, it’s not about borrowing money—it’s about buying freedom. So, brokers, financial pros, and anyone guiding retirees—remember: your role isn’t to sell products. It’s to spark possibilities. To help older Canadians move from fear to freedom, from “we’re not those people” to “why didn’t we do this sooner?” Because the real revolution in retirement isn’t about rates or renewals. It’s about reclaiming confidence, creating financially viable futures, and knowing you’ve made a real difference—something your clients will remember long after the ink dries. Trust me, that’s far more gratifying than handing out a 4.99% five-year fixed. I want to know what you think.  Send me your feedback.  Want more insights like this? Subscribe to my free newsletter here, where I share practical strategies, real-world stories, and straight talk about navigating retirement with confidence—not confusion. Plus, all subscribers get exclusive early access to advance chapters from my upcoming book. For Canadians 55+: Get actionable advice on making your home equity work for you, understanding your options, and living retirement on your terms. For Mortgage Brokers and Financial Professionals: Learn how to become the trusted advisor your 55+ clients desperately need (and will refer to everyone they know). This isn't just another revenue stream—it's your opportunity to build lasting relationships in Canada's fastest-growing demographic. Sue Don’t Retire…Re-Wire!

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