How Long Will My Money Last In Retirement?

Shawn Plummer

CEO, The Annuity Expert

It’s a common question: how long will my retirement savings last? Many people are worried about whether they’ll have enough money to live on during retirement. The good news is that there are plenty of ways to stretch your retirement savings – it’s all about being smart about money management during retirement. This guide will discuss tips for making your retirement savings last as long as possible!

This retirement plan is ideal for:

If you are far from retiring (Ages 30-54), follow this step-by-step guide to guarantee your future retirement, starting today.

Can You Run Out Of Retirement Money?

The first thing to understand is that running out of retirement money is possible. This typically happens when people don’t plan carefully for their retirement income and essential expenses. As a result, they may spend more than expected or not have enough income to cover their costs.

How Long Will My Retirement Savings Last?

The answer to this question depends on several factors, including how much money you have saved, how much you plan to spend during retirement, and what sort of investment return you can expect. However, some general rules of thumb can help you know how long your retirement savings might last.

As a general rule of thumb, most experts recommend that you plan to have enough retirement savings to cover at least three to five years of living expenses. This will help ensure you have a cushion in unexpected events, such as job loss or medical emergencies.

Another rule of thumb is to aim for a retirement savings goal of at least $500,000. This may seem like a lot of money, but remember that your retirement savings will need to last you for many years. If you start saving early and invest wisely, reaching this goal is achievable!

How Many Years Should Retirement Savings Last?

Your retirement savings should last for as long as you need them. However, this isn’t always possible. In reality, most people will need to rely on other sources of income at some point during retirement, such as part-time work or government benefits.

A few factors can impact how long your retirement savings will last. For example, if you plan to retire early, your savings will need to last for a more extended period of time than someone who retires later in life. Additionally, if you expect to have high medical expenses or want to travel extensively during retirement, your savings will also need to last for a more extended period of time.

How Long Will My Money Last Using The 4% Rule?

One way to estimate how long your retirement savings will last is by using the “four percent rule.” This rule of thumb suggests that you can withdraw four percent of your retirement savings each year and still have enough money to last for 30 years.

For example, let’s say you have $100,000 in retirement savings. Using the four percent rule, you could withdraw $4000 per year ($100,000 x 0.04) and still have enough money to last for 30 years.

Of course, this is just a general guideline – your actual withdrawals will depend on factors such as your investment return, inflation, and how long you expect to live in retirement.

The 4% rule has recently been criticized for being too aggressive. Many experts now recommend using a withdrawal rate of three percent or less to make sure your retirement savings last as long as possible.

Tips for Making Your Retirement Savings Last

Once you know how long your retirement savings might last, it’s time to start thinking about ways to make your money last even longer. Here are a few tips to get you started:

  • Review your budget and make adjustments as needed. One of the best ways to stretch your retirement savings is to review your budget and make any necessary adjustments carefully. This might include cutting back on unnecessary expenses, such as dining out or travel.
  • Make sure you’re taking advantage of all available tax breaks. Several tax breaks can help reduce the amount of taxes you owe, which can, in turn, help you stretch your retirement savings. Be sure to contact us or a tax professional for tax advice to see what breaks you might be eligible for.
  • Consider working part-time during retirement. Working part-time during retirement can help supplement your income and make your savings last longer. Just consider the pros and cons before making any decisions carefully.
  • Stay healthy and active. Keeping yourself healthy and active during retirement can help reduce overall healthcare costs, saving you a lot of money in the long run.

How Can I Prevent Running Out Retirement Savings?

One way to guarantee not to run out of retirement savings is to utilize an annuity to create a guaranteed income for life. An annuity is an insurance contract that pays out retirement income, and you can use it to create a stream of payments that will last as long as you live (even after the account runs out of money).

There are two main types of annuities: immediate and deferred. You make a lump sum payment with an immediate annuity and start receiving payments immediately. With a deferred annuity, you make periodic payments into the account and start receiving payments later (usually when you retire). Annuity payments can even increase throughout retirement to keep up with inflation!

No matter which type of annuity you choose, be sure to consider your options before making a decision carefully. Several factors can impact how much guaranteed income you’ll receive from an annuity, such as the type of annuity, your age, and the current interest rates.

How Long Will My Money Last In Retirement Calculator

Annuities can distribute regular withdrawals without the worry of running out of money. Use our free annuity calculator to estimate how much retirement income you can collect for the rest of your life.

Next Steps

So, keep these tips in mind whether you’re just starting to think about retirement or already planning. Working with an experienced annuity broker can help ensure that your retirement savings last as long as possible and provide you with the peace of mind that comes with knowing your income is guaranteed for life. Ready to get started? Contact us today for a free quote or investment advice on how an annuity can help secure your financial future.

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Frequently Asked Questions

These are commonly asked Americans questions about when they can retire and have enough savings to retire.

Can I retire at 60 with $500k?

A person can retire at age 60 with a savings of $500,000.00. If the person is currently age 60 and wants to retire immediately, they could earn $30,500 a year for the rest of their lives. If the person is age 50 wishing to retire at age 60, they could earn $54,916 a year for the rest of their life. If a person is age 40 wanting to retire at age 60, they could earn $66,942 a year for the rest of their life. Starting at age 62, the retiree is eligible for Social Security Benefits generating more income in retirement.

Can I retire at 60 with 1 million dollars?

A person can retire at age 60 with a savings of $1,000,000.00. If the person is currently age 60 and wants to retire immediately, they could earn $61,000 a year for the rest of their lives. If a person is age 50 wants to retire at age 60, they could earn $109,832 a year for the rest of their life. If a person is age 40 wanting to retire at age 60, they could earn $133,884 a year for the rest of their life. Starting at age 62, the retiree is eligible for Social Security Benefits generating more income in retirement.

Can I retire at 55?

A person can retire at age 55 with their savings. However, for retirees younger than 59 and a half, any income generated from a qualified retirement plan such as a 401(k) or IRA will pay a 10% early withdrawal penalty in addition to ordinary income taxes. In addition, starting at age 62, the retiree is eligible for Social Security Benefits generating more income in retirement.

Can I retire with 1 million dollars at 55?

A person can retire at age 55 with a savings of $1,000,000.00. If the person is age 55 and wants to retire immediately, they could earn $56,250 a year for the rest of their lives. If the person is age 45 wanting to retire at age 55, they could earn $107,026 a year for the rest of their life. If a person is age 40 wanting to retire at age 55, they could earn $118,165 a year for the rest of their life. Starting at age 62, the retiree is eligible for Social Security Benefits generating more income in retirement.

When can I retire if I was:

Born in 1955: Full retirement age began in 2017.
Born in 1960: Full retirement age begins in 2022.
Born in 1962: Full retirement age begins in 2024.
Born in 1963: Full retirement age begins in 2025.
Born in 1970: Full retirement age begins in 2032.

Is 2 million enough to retire?

A person can retire with $2,000,000 saved. At age 60, a person can retire on 2 million dollars generating $122,000 a year for the rest of their life starting immediately. At age 65, a person can retire on 2 million dollars generating $134,600 a year for the rest of their life starting immediately. At age 70, a person can retire on 2 million dollars generating $147,000 a year for the rest of their life starting immediately.

Can I retire with 3 million dollars?

A person can retire with $3,000,000 saved. At age 60, a person can retire on 3 million dollars generating $183,000 a year for the rest of their life starting immediately. At age 65, a person can retire on 3 million dollars generating $201,900 a year for the rest of their life starting immediately. At age 70, a person can retire on 3 million dollars generating $220,500 a year for the rest of their life starting immediately.

Can I retire with 10 million dollars?

A person can retire with $10,000,000 saved. At age 60, a person can retire on 10 million dollars generating $610,000 a year for the rest of their life starting immediately. At age 65, a person can retire on 10 million dollars generating $673,000 a year for the rest of their life starting immediately. At age 70, a person can retire on 10 million dollars generating $735,000 a year for the rest of their life starting immediately.

How long will my 401(k) last?

The answer to this question depends on several factors, including how much you have saved and how much you plan to withdraw each year. However, if you are careful with your withdrawals and invest wisely, your 401(k) could last for many years. This is because an annuity guarantees your life income, no matter how long you live or the markets perform.

How long will my IRA last?

Again, the answer to this question depends on several factors, including how much you have saved and how much you plan to withdraw each year. However, if you are careful with your withdrawals and invest wisely, your IRA could last for many years. An annuity guarantees your life income, no matter how long you live or the markets perform.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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