How Long Will My Retirement Money Last?

If you ask some pre-retirees the question: “What is your greatest fear in retirement?” “Outliving my money” may be one of the top answers. This is usually followed by the panicked question of “How long will my retirement money last?”

In fact, 42% of workers say they fear outliving their savings and investments.

Retirees face greater “longevity risk” today than ever before.

The Census Bureau says that Americans typically retire around age 63 for women and 65 for men. Social Security projects that today’s 63-year-olds will live into their mid-eighties, on average. 

This is a mean life expectancy, so while some of these seniors may pass away earlier, others may live past 90 or 100.

If your retirement lasts 20, 30, or even 40 years, how well do you think your retirement savings will hold up? What financial steps could you take in your retirement to try and prevent those savings from eroding? 

As you ask yourself, “How long will my retirement money last?” – consider the following possibilities and realities:

How will Social Security work in the future?

For decades, Social Security took in more dollars per year than it paid out. That ongoing surplus – also known as the Social Security Trust Fund – may face funding challenges as early as 2034. 

Congress may act to address this financing issue before then, but the worry is that future retirees could get slightly less back from Social Security than they put in. It’s critical that pre-retirees estimate the amount of Social Security benefits they are expected to generate in the future.4

Preparing for out-of-pocket health care costs.

You can enroll in Medicare at age 65, but how do you handle the premiums for private health insurance if you retire before then?

Striving to work until you are eligible for Medicare makes economic sense and so does setting aside money to pay for health care costs. 

A healthy couple retiring at age 65 can expect to pay nearly $315,000 in lifetime out-of-pocket healthcare expenses, even if they have additional coverage such as Medicare Part D, Medigap, and dental insurance.

Related: The Biggest Retirement Mistakes & How to Avoid Them

Luck is not a plan, and hope is not a strategy.

Those who are retiring unaware of these factors may risk outliving their money. Creating a strategy may help you better prepare for retirement.

We’re able to collaborate with you to create one, personalized for your specific goals, as well as take a look at your existing strategy in case something comes up. 

When you have such a strategy, you know what steps to take in pursuit of the future you want.

There are so many personal factors when it comes to preparing for your retirement. My goal is to help navigate and provide all the education I can to help you make the right decision for your personal circumstances.

If you need help sorting out what options would work for you and your family, please reach out to our office. We’re here to help you navigate what best suits your goals and personal circumstances and will help you find the best solution for you.