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How Long Will My Money Last In Retirement?

Last updated 03/15/2024 by

Benjamin Locke

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Determining how long your retirement money will last requires strategic planning due to unpredictable factors like healthcare costs and market volatility. Various strategies such as the 4% rule and dynamic withdrawals can help extend savings. In case of a shortfall, options include part-time work and consulting financial advisors.
Determining how long your retirement money will last is a crucial aspect of financial planning that requires careful consideration and strategic planning. Retirement savings are meant to support you through your golden years, but unexpected and unforeseen events can significantly impact the longevity of your nest egg. From sudden healthcare expenses to market volatility, these unpredictable factors necessitate a cautious approach to retirement planning. Ensuring your retirement funds last requires not only a solid understanding of your financial situation but also the flexibility to adapt to changes and the foresight to prepare for potential challenges.

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How long will my money last in retirement?

If carefully planned, then the money you save to retire through a pension, social security, and private investments should last until your death. That being said, the money must be managed in an intelligent manner and you should consider implementing several strategies such as The Gaurdrail Approach, the 4% rule, and

Pro Tip

The longevity of retirement savings hinges on a holistic view that encompasses not just financial but lifestyle factors. It’s about crafting a life post-retirement that is not just sustainable but enriching. Calculating expected retirement duration involves a deep dive into current savings, expected lifestyle changes, and projected expenses, including healthcare. Incorporating a buffer for inflation and unexpected costs is crucial. Strategies such as diversifying income streams, investing in annuities, or even downscaling lifestyle choices can ensure that retirement savings not only last but support a fulfilling retirement phase.” – Ashish Agarwal, owner of Home In Depth.

6 common reasons people run out of retirement money

Many people dream of spending their retirement years on a sunny beach, envisioning a serene and carefree lifestyle after decades of hard work. However, life has a way of presenting unexpected challenges that can disrupt even the most idyllic retirement plans. Below are six common reasons why you might find your retirement savings depleting faster than anticipated, underscoring the importance of preparing for the unforeseen.
Rank ReasonDescription
1Health Care CostsHealth care expenses, including long-term care not covered by Medicare, can deplete savings quickly. Many retirees underestimate these costs, leading to financial strain.
2TaxesWithdrawals from tax-deferred accounts like 401(k)s and IRAs are taxed as ordinary income. Failure to plan for these taxes can result in a faster depletion of retirement funds.
3Divorce or Early Death of a SpouseSuch life events can drastically reduce household income and assets while not proportionally decreasing expenses. The loss of a spouse’s Social Security or pension benefits can further impact financial stability.
4Market VolatilityInvestment losses during market downturns can significantly reduce the value of retirement savings. This risk is heightened for those without a diversified investment portfolio.
5InflationThe cost of living tends to rise over time, which can erode the purchasing power of fixed incomes in retirement. Inflation can make it difficult to maintain a desired lifestyle without adequate planning.
6OverwithdrawalWithdrawing too much from retirement savings early on can lead to funds running out prematurely. A lack of a disciplined withdrawal strategy exacerbates this risk.

Strategies to Extend Your Retirement Savings

The 4% Rule

The 4% rule suggests withdrawing 4% of your savings in the first year of retirement, adjusting for inflation in subsequent years. Originating from William Bengen’s 1994 research, this strategy assumes a mix of at least 50% stocks and 50% bonds in your portfolio, aiming to ensure that your savings last for at least 30 years. However, recent market volatility may affect its efficacy, prompting financial experts to recommend a more flexible approach to withdrawals in response to changing economic conditions.
Even though this strategy aims to stretch your funds over 30 years, lifestyle changes and healthcare costs must also be factored into this calculation, as they can significantly impact the duration of your retirement savings. Remember, personalized strategies tailored to individual circumstances often offer the most reliable financial roadmap.” – Dana Ronald, President of Tax Crisis Institute

Guardrails Approach

The Guardrails Approach is a flexible retirement withdrawal strategy that adapts to market conditions and portfolio performance. It sets specific thresholds or “guardrails” for adjusting withdrawal rates. If the portfolio value increases significantly, you can increase your withdrawals, and if it decreases, you reduce your spending. This approach aims to protect against market volatility and extend the longevity of your retirement savings.

Dynamic Withdrawals

Dynamic withdrawal strategies offer a nuanced and adaptable method for managing retirement income, allowing you to modify your annual withdrawal rate in response to the ever-changing landscape of the financial markets as well as shifts in your personal financial needs. Unlike the rigid structure of the 4% rule, dynamic withdrawals consider the current performance of your investments, aiming to increase withdrawals during prosperous market periods and decrease them during downturns, thereby helping to safeguard your retirement savings from premature depletion.

Bucket Strategy

The Bucket Strategy involves dividing your retirement savings into several “buckets” based on the time frame when you’ll need to access the funds. The first bucket contains funds for immediate expenses, typically in cash or cash equivalents. The second bucket is for medium-term expenses, invested in bonds or balanced funds. The third bucket is for long-term growth, invested in stocks. This strategy aims to provide liquidity and income while still allowing for growth potential.

The Income Floor Strategy

The Income Floor Strategy is a prudent approach to retirement planning that prioritizes the security of covering essential living expenses through stable and predictable income streams, including passive income.. By leveraging guaranteed income sources like Social Security benefits, bond ladders, or annuities, this strategy establishes a financial “floor” that ensures your basic needs—such as housing, food, healthcare, and utilities—are met, regardless of market fluctuations. This foundational layer of income helps to mitigate the risk of having to liquidate investment assets during unfavorable market conditions, thereby preserving your investment portfolio for longer-term growth and discretionary spending.
Here are some tips and retirement advice from Tim Bottini, COUNTRY Trust Bank Financial Advisor:
  • Fine tune your retirement plan with your financial advisor and consider consolidating old 401(k)s for benefits such as diversification, investment selection, cost and consolidation of investments. Talk to a financial advisor about whether you should pay off your home mortgage early or pay the minimum.
  • Plan your transition from the asset accumulation stage to asset distribution stage. Test your planned retirement budget before pulling the trigger on the retirement date. Talk to a financial advisor to help with determine how and when to claim Social Security.
  • Consider ways to strengthen your financial plan such as protecting against future long term care costs, talking with an attorney to establish an estate plan that includes a will, Powers of Attorney, and beneficiary designations.

What happens if I run out of money during retirement?

You will probably end up on skid-row. Joking! on. If you find yourself running out of money during retirement, there are several strategies you can consider to help stabilize your financial situation. Here are some options based on recent research and expert advice:

What to Do If Your Money Runs Out During Retirement

Running out of money in retirement can be stressful, but there are steps you can take to navigate this challenging situation.
  1. Consider Part-Time Work: Supplement your income with part-time employment related to your skills or hobbies.
  2. Explore Reverse Mortgages: Convert part of the equity in your home into cash while still living in it.
  3. Seek Financial Assistance: Investigate government programs or ask family for support if feasible.
  4. Adjust Your Lifestyle: Reduce expenses by downsizing, eliminating non-essentials, or moving to a more affordable location.
  5. Delay Social Security Benefits: If possible, delay starting your Social Security benefits to increase the monthly amount.
  6. Consult a Financial Advisor: Get professional advice to reassess your financial strategy and explore investment options.
  7. Refinance Debt: Lower your monthly payments by refinancing high-interest debt to a lower interest rate.
According to Gabriela Lima, PR Executive at Scholaroo. This new report, Retiree’s Financial Reserves by State – a study that analyzes the economic future for retirees based on savings in all 50 states – retirees in California, Illinois, and Ohio have the highest levels of financial resources in the entire country.
Retirees in these states stand out for their substantial financial resources, exhibiting the highest rates of investment earnings and contributions to retirement benefit costs per capita.
Interestingly, Florida retirees are facing significant financial challenges, as they are the third least likely to have substantial financial resources saved.


How can I estimate how long my retirement money will last?

To estimate the duration your retirement savings will last, you need to consider your annual expenses against your total savings and expected investment returns over time. Tools like retirement calculators can help you make these estimates by factoring in your current savings, expected retirement age, monthly expenses, and other sources of income.

How long should I expect my retirement money to last?

Retirement can last 20 years or more, depending on when you retire and your lifespan. Your retirement income will likely come from several sources, including savings, pensions, and social security. Planning for a long retirement is crucial to ensure you do not outlive your savings.

Can I find a calculator that tells me how long my retirement savings will last?

Yes, there are specific calculators designed to estimate the duration your retirement savings will last. For example, Supermoney offers a calculator that factors in your retirement savings, expected annual withdrawals, and other income to estimate how many years you can fund your retirement.

What factors affect how long my retirement money will last?

Several factors can influence the longevity of your retirement funds, including the age at which you retire, your life expectancy, and the various expenses you will face during retirement. It’s important to consider these factors when planning for retirement to ensure your savings can support your desired lifestyle. Equifax discusses these aspects in more detail.

Key takeaways

  • Proper retirement planning requires careful consideration and strategic management to ensure funds last.
  • Common reasons for retirement savings depletion include healthcare costs, taxes, and market volatility.
  • Strategies like the 4% rule, Guardrails Approach, and Bucket Strategy can help extend retirement savings.
  • If facing a shortfall in retirement funds, options include part-time work, exploring reverse mortgages, and consulting a financial advisor.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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