retirement savings

How Long Will My Retirement Savings Last?


John E Chambers
August 25, 2021

No one wants to run out of money saved for retirement.

That’s the entire idea behind the savings in the first place. However, everyone should be interested in knowing how long retirement savings would last and how to stretch it even further.

You should also know how to manage your savings so that it is not quickly depleted. Decades of savings should guarantee decades of spending if you know how to work out the math.

Experts have worked it out. It translates to not withdrawing beyond 4% in the first year after retirement. Maintaining that every year onwards, and putting inflation into consideration, should make it last very long. However, for how long?

There’s no straightforward answer to knowing how long your retirement savings would last. This is because several factors can determine this. However, following strict withdrawal guidelines can make retirement savings last for as long as 25 years!.

We know this is not always realistic. Only a few people can ever keep to the 4% rule, especially as the first years after retirement are often spent on vacations and other quite expensive ventures.

A retiree deserves all the fun after years of hard work. However, caution is needed, or the savings could soon be under enormous strain that would deplete it sooner rather than later.

But what is certain is that everyone wants their savings to last for as long as practicable.

Calculating How Much Your Retirement Savings Would Last

calculating how long will savings last

You can know how much your retirement savings would last by knowing these variables

Cumulative Savings by Retirement

You need to be able to calculate how much you (would) have saved by retirement.

You can know this value from how much you have been saving annually. You should include the value of properties or items you hope to sell ahead of your retirement.  Calculate in today’s worth of the dollar.

Annual Retirement Spending

Calculate how much you wish to spend annually on retirement. Do that in today’s dollar value as well.

Value of annual After-tax Return on Investments

You’ll need to calculate a hypothetical value of the rate of after-tax return on your investments when retired.

This has to be hypothetical because you can’t possibly know the actual value of the rate of return on investments due to their volatile nature. But you should be able to make a fairly accurate prediction.


This is the annual reduction in value, which may not often be factored into the calculations.

With the above variables, how long retirement savings would last can be easily calculated.

If, for example, you have $250,000 at retirement, an annual return of investment of 6%, and annual spending of $24,000, without factoring in inflation, the savings are projected to last for about 14 years.

Several kinds of specialized calculators can offer a more accurate projection as long as you can provide the correct variables. The ones listed above are the most important.

How Much Money Is Needed For Retirement?

How Much Money Is Needed For Retirement?

Outliving your retirement savings is the simple result of not having saved enough.

How much money is enough?  This depends on so many things—the cost of living, lifestyle choices and recurrent expenses.

Regardless of the amount that is considered sufficient, very few people ever save up to the required amount on retirement. To have a comfortable retirement, you need to continue maintaining the lifestyle you nurtured while in employment. Experts believe you need to earn at least 80% of your salary at the time of employment to have a good retirement.

This means you need to have at least $80,000 annually if your last salary was $100,000 if you need to retire comfortably.

Remember the 4% rule? This means by retirement, if you are to earn this amount, you must have saved up to $2M for your retirement savings to be sufficient.

Does My Location Matter?

Your location doesn’t affect your retirement savings any more than your location affects your salary during paid employment.

However, choosing an area that would help manage your expenses is a smart way of keeping your savings longer. If you want your retirement savings to last even longer, you may need to consider changing your location to a place with a more affordable cost of living.

While this may be a good idea in the short term, the idea of relocating permanently to stretch retirement savings a little further doesn’t appeal to many people.

It has many advantages, though. The retiree has the opportunity to see lots of new places while also providing cheaper holidaying experiences.

Should I be worried about inflation?

When you save your money over time, it is not unusual for its value to decline. It means that the amount you saved would likely not have the original value when you start withdrawing from it.

When planning on your retirement savings, inflation must be factored into the calculations.

The cost of goods and services rise over time. That’s inflation. If inflation is well factored into your plans, you’ll have nothing to worry about. Knowing inflation would decrease the value of your savings at a certain percentage means you can plan for your savings to cancel out the losses.

There’s no magic wand to knowing exactly how much the value of your savings would decrease each year, but you can make use of projections and statistics that put it at about 3% yearly on average.

Unlike in paid employment, retirement earnings are fixed. That means the retiree is likely to have less and less as inflation increases. This is certainly something that requires planning and foresight to forestall it so that the savings can last longer.

How to be SMART with your money

be smart with your own money

There are simple decisions you can make to make your retirement more enjoyable. You’ve stressed yourself all your life. You desire a restful retirement. However, how many people, despite their best efforts, rest in retirement?

By being smart, and I do not just mean not being dumb, you can make your retirement more fulfilling.

In managing retirement finances, Forbes describes SMART as an acronym for

  • Secure
  • Manage
  • Active
  • Realistic, and
  • Transitional

This implies that getting SMART with your money helps you take steps to prevent a regrettable but avoidable situation.

Secure involves providing shock absorbers for the inherent risks of retiring. You should be able to prepare for them and adjust your lifestyle accordingly. Making changes so that your money lasts longer is a smart choice.

Manage talks about getting proper advice on how to let your savings keep yielding and securing your retirement. You’ll be surprised to know how much money people lose because of a lack of financial guidance. This advice may preferably come from a professional source. What’s important is that the advice helps to make the savings last longer.

Active refers to activities that keep the retiree active in body and mind. Remaining active may be a way even to help grow the savings rather than deplete them.

Realistic talks about practical steps the retiree may take that would help grow the savings. The person planning for retirement involves making choices on how the goal of a restful retirement can be achieved. This may involve working part-time or even delaying retirement to make some more money. It may also include reviewing some decisions to reflect realities on the ground.

Transitional addresses the transition phase and how to manage it.

Being smart with your money involves lots of decision-making. You have to decide on the kind of future you want and how to get there. If you can take any steps to make it a reality, take it immediately. If not, you may have to adjust your expectations to match existing realities.

One way to be smart about your retirement savings could be taking a part-time job!

Can Work In Retirement Make My Money Last Longer?

lady work in booking office

Apart from making more money, part-time jobs are a significant way for retirees to keep fit and manage their time while still being productive.

Many believe that one smart way of making retirement savings last longer is to earn more after retirement! Working in retirement certainly reduces the burden on your retirement savings by providing an avenue for more income.

However, many retired personnel never get a part-time job just because of money; otherwise, they would have kept working in the first place!

Keeping fit and staying healthy remains the primary reason for retired personnel who work part-time.

However, there are some downsides to picking up paid employment after retirement, and this is where you need to be careful.

Working in retirement could mean you pay more in taxes, reduce your social security payments and even increase your Medicare costs (particularly for prescription drugs). While these do not mainly eat into the retirement savings, they may not have the net-increase effect desired on retirement savings.

Part-time jobs also do not come with benefits that may increase retirement savings, except on infrequent occasions. So while working in retirement can help provide more cash at hand, keep the body active, it may not necessarily have a significant effect on making the savings last longer. However, it can certainly help.


Retirement requires lots of planning. A happy retirement is the result of decades of savings.

Knowing how to save adequately and make the savings last is essential for everyone who seeks to have a happy retirement.


John E Chambers

John E Chambers is an experienced financial advice expert. Born in Chicago, he has a master's in Industrial Finance, but he has spent decades offering investment advice to businesses and individuals alike. He is the founder of and wants the website to be valuable for retirement advice. In addition, he writes articles that help users jump-start their retirement plans and choose the best investment options. If not pondering over stock market statistics or reading some magazines, you can find John spending time with his family. As an early retiree, John also offers unique insights into what post-retirement life is like.