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How Long Will My Money Last?

Thumbnail image of Alastair Hazell By Alastair Hazell.
The nominal interest rate is the standard annual rate excluding compounding. The APY/AER figure includes compounding, and is often quoted on savings products.
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Use our calculator to work out how long your savings or retirement fund might last and the maximum amount you can withdraw to ensure your savings last.

You may be using our calculator to calculate savings withdrawals, to see where you are with your retirement strategy, or just to work out how many months and years of savings you have in the event of a change of circumstances.

We've designed the calculator to give a number of helpful insights. You can:

  1. See how much of your savings remains after a series of regular withdrawals.
  2. Find out how long your money might last, based upon a regular withdrawal figure.
  3. Discover the maximum withdrawal amount required to ensure your savings last the length of time you want.

The rest of this article will explore insights and tips to help you extend the life of your retirement savings.

Strategies and tips for making your money last

According to the Federal Reserve, the average American retires with a median savings of $87,000. 1 While the top 10% of income earners may start their retirement with upwards of a million dollars, the reality is that most retirees face anxiety over their finances. Given the current average life expectancy in the US - 73.5 years for men and 79.3 years for women - it's more important than ever to plan your finances with a long-term view. 2

With little to no income replenishment after retiring, your money must work hard for its place in the world. This demands a strategic approach that keeps your accounts in the green. Here are six ideas to consider as part of your strategy.

1) Practice the 4% rule for retirement

The Bengen Rule was coined in the Nineties to give retirees a safe income stream that would outlast their retirements. The rule states that if you withdraw 4% of your savings every year, your funds will last a minimum of three decades. It's rarely that simple, though, so it's no surprise that Bengen himself has had to tweak his rule to adjust to inflation. These days, he advises a withdrawal rate of anywhere between 3% to 5%. 3

The higher the inflation rate rises, the higher your withdrawal rate must climb, but you can feel safe in the knowledge that the 4% rule was designed to work in a prolonged market downturn.

2) Understand your spending

You can't control what you don't understand, so tracking your expenditure is a crucial part of post-retirement security. You'll need at least a month of transactions to work from. Once you have your baseline, you can identify overspending and actively maintain your financial health.

Thankfully, there's an app for everything, so the process won't require you to muddle through piles of receipts. A budgeting app or budget management tool can help you work out where your money is going and where you can cut back.

3) Optimize your savings

Money should never be passive. It should always work hard to attract further income, so a high-yield savings account is the first step to a successful retirement. Certificates of deposit and CD ladders are another high-yield option. While some liquidity is needed, your larger nest egg should be stored in a lucrative, low-risk investment portfolio.

NerdWallet provides a regularly updated list of the best high-yield savings accounts, highlighting the benefits of earning above-average yields. And, Forbes has a very good article highlighting places to put your savings.

Consider consulting with an independent financial advisor to create an investment strategy that suits your goals.

4) Reduce withdrawals

If the market is experiencing a downturn, your withdrawal rates should slow down in tandem, but you'll also need a tax-conscious withdrawal strategy that puts more money in your pocket. Some financial planners suggest withdrawing from taxable accounts before tax-deferred accounts. This way, you can optimize your tax outlay via tax-free accounts for most of the year.

If you fall into a high tax bracket, however, some financial planners suggest you withdraw from a tax-exempt account first. If you temporarily jump to a higher bracket, a Roth IRA withdrawal can reduce your outlay. 4

5) Increase your income

On average, retirees receive over $1,800 a month through Social Security. While that creates a strong foundation, it isn't enough. An investment portfolio will force your money to work harder for you.

Retirement is not the time to risk catastrophic losses, so strong diversification is essential. Retirees often learn towards annuities and bond funds for extra income, but you might also decide to put your property to work through tenancies. 5

6) Stay flexible, but perform regular reviews

There's no such thing as a perfect financial strategy. The economy will change. The market will evolve, and your expenses will rise with inflation. You should therefore be fluid with your strategy - revise your financial plan often and make changes as the need arises. Review your asset allocations and adjust your investments in response.

Retirement demands an entirely new approach to finances, but there's no reason to do it alone. A financial planner can ease your learning curve. If you're riddled with anxiety over your money, you'll miss out on the pleasures of post-retirement life. A robust financial plan will ease your mind and set you free to extract joy from your golden years.

For further reading, Forbes writer David Rae has created a list of ways to make your money last longer in retirement, which you can find here.


  1. Motley Fool. What Is the Average Retirement Savings in the U.S.?.
  2. CDC: National Center for Health Statistics. Life Expectancy (U.S.).
  3. Journal of Financial Planning. Is the 4 Percent Rule Too Low or Too High?.
  4. SmartAsset Advisors. Pay Fewer Taxes on Your Retirement Income With This Withdrawal Strategy.
  5. Forbes. Make A Retirement Planning Checklist.

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