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How Long Will My Money Last in Retirement?

Answering this question takes planning. Find out what to consider as you plan for your money to last through retirement.


Key Takeaways

Retirement savers and retirees are concerned about their money lasting as long as they need it to in retirement.

Planning and considering key factors can help you have a better chance of making your money last.

Calculating expenses, a smart withdrawal strategy and how you invest in retirement should be part of your planning.

Retirement planning can feel like throwing darts against a wall and hoping something sticks. But answering key questions and creating a plan may help you feel more confident about the future.

  • What will your expenses be?

  • How long will you need the money?

  • Do you have enough saved?

  • How will you invest?

  • How will you withdraw your funds in retirement?

You will have to estimate some of your responses. However, these can help you answer the important question most people have about retirement: How long will my money last?

Though no one can predict the future, there are methods to gauge your financial status post-retirement with planning. That includes calculating expenses, determining withdrawals and investing to continue growing your savings.

The Fear of Running Out of Money Is Real

Is it possible to run out of money in retirement? It is, but whether you do or don’t, the fear is real. In fact, many retirement savers and those already retired, say running out of money is their biggest fear.1

58% of savers and retirees say running out of money is their biggest fear.1

Some people worry their retirement savings will never be sufficient, even if they have enough money. And while there are those who are truly behind in saving, it’s not too late to make changes for your future.

How can you alleviate fears of running out of money? We think it’s best to address your concerns (and your plan) head-on. Start with these essential tips.

Budget Now, Budget in Retirement

If you wonder if you need a budget in retirement, the answer is yes. To avoid outliving your money (known as longevity risk), create a budget while working and in retirement. Your expenses today will give you a good idea about your retirement budget.

Remember budgeting is not a negative. Too many of us think it means spending as little as possible. However, including “fun” expenses frees you to enjoy the things you want to do. When you’ve forecasted those expenses, it can give you the green light to make it happen.

In retirement, certain expenses may decrease or stop altogether. For example, if you pay off your debts or no longer have commuting costs, you may spend less monthly. But there may be new expenses such as more travel or new activities. Another consideration is higher health care costs in retirement.

Your Money May Need to Last Longer Than You Think

How long your retirement savings last may depend on several factors. Some of those include the age you retire, your lifestyle and your health. Also important is the amount of money you earn from savings, investments, Social Security, pensions and working after retirement.

Healthier lifestyles and medical advances mean people live longer. That also means you’ll need to plan for longer. Most financial professionals agree you should plan for at least 30 years.

How Much Is Enough for Retirement?

When saving for retirement, it’s important to understand how much money you may need later. Knowing how much to save now based on your age and general checkpoints can help you see if you’re on track.

Investing Before and After Retirement

To make your money last, have a portfolio that helps you reach your goals by potentially growing your money. That may mean taking on more risk with additional stock funds. Typically, as you near retirement, you'll want less risk in your portfolio, but not zero risk. Too little risk can mean no growth.

Conversely, taking on riskier investments to compensate for a savings shortfall is not ideal either. How much risk to take in your retirement portfolio depends on two factors: when you need the money and your risk tolerance.

A Smart Withdrawal Strategy Can Help Your Money Last

Making your money last in retirement means not overspending. For retirees, overspending is withdrawing too much from your savings too fast. Developing a wise withdrawal strategy may help preserve your nest egg. Here are three to consider.

1. The Rule of 4 in Retirement

The 4% rule is another name for this retirement withdrawal strategy. And while it’s the easiest to calculate, many financial professionals consider it to be a rule of thumb. Most retirees understand that if there’s a down year in the market, they may want to spend less.

How does it work? You withdraw 4% from your savings the first year of retirement, then adjust for inflation every year after.

What Is the 4% Rule for Retirement and How Do You Calculate It?

Withdraw 4% of your savings in the first year of retirement, then adjust for inflation every year after (based on the original 4% amount). Here’s what it could look like:

A retiree with $1 million in savings would withdraw $40,000 in year one ($1m x 4%). In year two, they would withdraw the amount times the rate of inflation.

If inflation went up 2% in year two:
$40,000 x 1.02 = $40,800

If inflation went down 2% in year two:
$40,000 x .98 = $39,200.

Source: What is the 4% Rule for Retirement Withdrawals, Forbes, February 2023.

Is the 4% Retirement Rule for Everyone?

Your situation and the size of your savings may help you determine if the 4% rule will work. You may not need to spend 4% if you have a larger retirement fund. If you have less saved, 4% may be too aggressive.

A more recent study indicates that 3.3% may be a better withdrawal rate for retirees.2 Inflation and market volatility are also considerations when determining how much to withdraw. However, most financial professionals tend to agree that withdrawing more than 4% could deplete your savings too fast.

2. A Dynamic Withdrawal Strategy

The 4% rule assumes retirees will take out the same amount each year, but some retirees prefer a more flexible approach. With a dynamic withdrawal strategy, you choose how much you will spend each year based on what the markets are doing.

If the markets or economy are bad, spend less and delay expenses until things improve. This strategy allows you to keep more money invested during difficult times. It enables you to potentially recover from losses when the situation gets better.

When using a dynamic withdrawal strategy, it is important to consider that your spending may vary greatly from year to year. This variation in spending requires careful planning. You may plan to increase your income in good market years but remember to save for lean years.

3. Retirement Income Floor Strategy

Determining the minimum to live on is the basis of the retirement income floor strategy. Add up your essential expenses to determine how much you need to live by dividing your expenses into needs and wants. The “needs” make up your income floor.

What’s Your Income Floor?

Add up all expenses your need to live on. It’s the essentials, not the wants.

Things that affect your necessary expenses are inflation, changes in the cost of living where you live, and unexpected health care expenses. You’ll also want to consider “wants” expenses, which will exceed your income floor.

Another consideration is how you will invest. For your minimum income needed, investors typically choose investments that don't change in value drastically. For wants, you may want more growth potential, and that could mean taking on more risks.

Plan to Make Your Money Last

Retirement planning is so important. Without it, you may continue to wonder if your money will last or if you’ll come up short. You can start planning at any age. However, if you have less than ten years, it is crucial to begin now.

You can also plan alone but discussing it with a professional may alleviate some concerns. There are different approaches, and a financial consultant can walk you through them. Knowing your financial situation can help alleviate concerns.

Start Planning and Stop Wondering (and Worrying) About Retirement

We’re here to help put your questions to rest.


Retirees’ biggest fear is outliving their assets, research finds. These tips can help., June 2023.


Is 3.3% the New 4.0%? Morningstar, November 2021.

This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

You could lose money by investing in a mutual fund, even if through your employer's plan or an IRA. An investment in a mutual fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency.