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How Long Will Your Retirement Savings Last

March 27, 2024

Blueprint Income Team

"How long will my savings last in retirement?" It's a common question that pre-retirees ask, not to mention an important one. The ideal answer would be that your savings will last for as long as you need it, but that's not always a guarantee. Stretching your savings to last throughout your retirement requires careful consideration of factors such as your current income, your current age, the age at which you plan to retire, your retirement portfolio, and your expected cost of living after you leave the workforce.

How much money do you need to retire?

The guidance for retirement savings is that you need at least 80% of your pre-retirement income to support your retirement lifestyle. For example, if you currently make $100,000 per year, your annual income streams in retirement should amount to $80,000. This percentage centers on the notion that a person's expenses drop by approximately 20% when they retire, as they don't have to pay as much, or at all, for commuting, a work wardrobe, payroll taxes, and retirement contributions.

For a more accurate reckoning of how much money you need, you should also consider these factors:

  • Desired expenses: These are the things you want to spend your money on, such as travel, charity, and the money you want to leave for your family.
  • Necessary expenses: Necessary expenses may include healthcare and housing-related costs. Healthcare costs often increase with age, while housing costs may be less if you own your home or plan to live with family members.

The last thing to consider is how long you expect your retirement to last. Calculating your retirement span isn't an exact science, but there are some factors you can use to come to a rough estimate, such as:

  • Retirement age: The later you retire, the smaller the time frame for funding your retirement. 
  • Current health: The better your health is now, the better your chances of remaining healthy down the line.
  • Lifestyle: Studies show that maintaining an active lifestyle can increase your odds of living a longer life. Increased mental activity can have the same impact.

How long will your retirement savings last?

The life of your retirement savings depends on the factors discussed above, along with variables such as your retirement portfolio and retirement income. If you have a robust portfolio with diversified assets, you can rely on cash flow, dividends, and selling your assets as needed to supplement your savings. Thorough planning and fortunate market performance can ensure that you have enough money to last your entire retirement.

If you haven't met your savings goals and your portfolio isn't performing as you expected, there are strategies you can implement to stretch the money you have.

Tips for making your retirement savings last

Here are some ways you can stretch your retirement savings to last you the rest of your life, though you should keep in mind that a given strategy may not work for everyone. The ideal strategy for you may depend on your circumstances. Consulting with a financial adviser before you incorporate any of these strategies is generally a good idea. 

Follow the 4% rule

The 4% rule is a withdrawal strategy that structures your spending based on your total savings. The rule says to withdraw 4% of your savings in your first year of retirement and, in subsequent years, withdraw the same dollar amount plus a little extra to account for inflation. Say, for example, you've saved $2 million. According to the 4% rule, the maximum amount you can spend in your first year of retirement is $80,000. The following year, you'd again have a spending cap of $80,000 plus however much inflation has occurred in the intervening period. 

The 4% rule assumes a 30-year retirement, so it may be less useful for those who may enjoy greater longevity. Also, it's less of a definitive rule than it is a general guideline. In years when you can comfortably spend less than 4% of your savings, you should. That can help make up for years in which you may need to exceed 4%. 

Align withdrawals with your portfolio's value

The 4% rule is based on findings originally published in the mid-1990s, so applying it to the contemporary volatile market may reveal shortcomings for some retirees. An alternative strategy is to align your yearly withdrawals with your retirement portfolio's remaining value. Instead of an inflation-adjusted spending cap based on 4% of your first year's overall portfolio value, each subsequent year would have a slightly lower cap based on how much money you have left, which you can adjust based on evolving financial needs. 

Make dynamic withdrawals

The strategy of making dynamic withdrawals is similar to aligning your spending with your portfolio's remaining value. It centers less on your savings and more on how well your investment portfolio performs. Your spending cap would be higher in years the market does well. In years it does poorly, your cap would tighten accordingly. 

Establish an income floor

An income floor is the minimum amount of money you need to cover your basic living expenses. To establish your income floor in retirement, consider at least the following factors:

  • Cost of living: Your specific cost of living includes housing, utilities, food, transportation, and healthcare, the exact costs of which may depend on where you live out your retirement. 
  • Anticipated expenses: Anticipated expenses refer to the costs of your intended retirement lifestyle. If you want to travel, for example, your floor may be higher than that of a retiree who plans to spend retirement largely in a home that they own.
  • Guaranteed income sources: Some common guaranteed income sources for retirees are Social Security benefits, pensions, and retirement account withdrawals. Knowing how much money you're guaranteed to have allows you to calculate more accurately how much you need from your investments to pay for your minimum living expenses.
  • Estimated returns: If your guaranteed income doesn't cover all your minimum expenses, you may need to rely on returns from your investments to account for the rest. Consulting with a financial adviser is probably the best way to come to an accurate estimate of portfolio growth and optimize performance.

With your floor established, monitor your portfolio carefully and adjust your floor as needed on a year-to-year basis. That way, you may be in a better position to adapt to factors that are largely outside of your control, such as inflation, increasing healthcare needs, and family circumstances.

Suspend your Social Security benefit payments

Suspending your Social Security benefit payments means delaying when you start to receive payments. The IRS allows you to suspend your benefits until the age of 70. The idea behind suspension is that you'll receive higher payments when you do start receiving them. This approach can help you stretch and supplement your savings by providing you with larger cash infusions at a time when you have a clearer sense of how much money you need to fund the rest of your retirement years.


Some places have higher costs of living than others, so moving to a more affordable location (a different city, state, or even country) may allow you to stretch your savings by spending less. However, moving is a big decision, one that may involve a high initial cost, so consider this strategy with such factors in mind.

Secure other sources of income

You may have numerous ways to make a living even after you formally leave the workforce. If you have a bankable skill or hobby — for example, art, writing, or woodworking — consider monetizing it to supplement your savings and investments. You could also transition your pre-retirement career into a part-time or freelance profession.

Alternatively, or in addition, put some thought into purchasing financial products that may grow your money and supply you with income when you need it most. A fixed annuity is an example of such a product. When you purchase a fixed annuity, the annuity provider offers you a fixed interest rate. You make an initial contribution or series of contributions, and your account grows, tax-deferred and compounded, at the specified rate. At the end of the annuity's term, you can convert it into a series of cash distributions that may last you the rest of your life. 

Learn more about incorporating an annuity into your retirement plan today

If an annuity seems like a good inclusion in your retirement plan, consider seeking expert advice to make the best of it. The annuity consultants at Blueprint Income are happy to help you in that regard. Use our free tools and resources, such as the longevity calculator, to estimate how long you may need to stretch out your savings. When you're ready to address the finer points of your future, reach out to us at support@blueprintincome.com or 888-867-7620 to discuss how an annuity can complement your overall strategy.


Blueprint Income Team

We are a team of finance, insurance, and actuarial professionals working to make it easier for everyone to achieve a steady and comfortable retirement. We write about annuities (the good and the bad) and provide strategies to help Americans prepare for retirement.


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