Will your money outlast you? Explained
Plan for your money to last well past your life expectancy, not just to it. Life expectancy is an average, so about half of people live longer. From the US life table, a 65-year-old man has a 1 in 4 chance of reaching about 90 and a 1 in 10 chance of reaching about 95; for a woman the ages are about 93 and 97. That is why many planners suggest funding retirement to age 90–95.
Survival odds: SSA period life table 2023.
How this retirement calculator works
- Until you retire, your savings grow each year at your chosen return, minus 2.5% inflation, and you add 12 months of saving.
- From retirement, each year your pot grows at the same real return and you take out 12 months of spending. Enter spending after any pension or Social Security income.
- The result is the age at which your savings run out, compared with the age you plan to live to.
All amounts are in today’s money, because the calculator works with the return after inflation. A 5% return becomes about 2.4% a year in real terms.
Worked example. A 45-year-old with $120,000 saved, saving $600 a month and retiring at 65 with a 5% return has about $377,000 in today’s money at 65. Spending $3,000 a month, the money runs out at 77, about 13 years short of a planning age of 90.
| Change | Savings last to |
|---|---|
| As above | 77 |
| Save $1,200 a month instead of $600 | 84 |
| Retire at 70 instead of 65 | 85 |
| Spend $2,000 a month instead of $3,000 | 85 |
| 7% return instead of 5% | 87 |
How long should you plan for?
| At 65 | Half live past about | 1 in 4 live past about | 1 in 10 live past about |
|---|---|---|---|
| Men | 84 | 90 | 95 |
| Women | 87 | 93 | 97 |
| Couple, both 65 (at least one alive) | 91 | 95 | 98 |
Planning only to your average life expectancy leaves roughly a 50% chance of running short. Planning to the age that only 1 in 4 or 1 in 10 people reach gives a much safer margin. For your own estimate, try the life expectancy calculator or the odds of living to 90.
Planning as a couple? Shared savings have to last until the second partner dies, which is usually later than either partner’s own life expectancy. For a man and a woman who are both 65, there is a 1 in 4 chance that at least one of them is still alive at about 95 and a 1 in 10 chance at about 98 (SSA 2023 period life table, treating the two lives as independent). Enter both ages in the couple odds calculator to see your own planning horizon.
A common rule of thumb, the “4% rule”, comes from William Bengen’s 1994 study of US market history: withdrawing 4% of the starting balance in the first year, then adjusting for inflation, would have lasted at least 30 years in every period he tested. It is a guide, not a guarantee.
Retirement savings and lifespan FAQ
How long will my money last in retirement?
Enter your savings, monthly saving, retirement age, spending and expected return above. The calculator shows the age your savings run out, in today’s money, and compares it with the age you plan for.
What age should I plan my retirement savings to last?
Many planners suggest 90 to 95. From the SSA 2023 life table, 1 in 4 men aged 65 live past about 90 and 1 in 4 women past about 93.
How many years do people usually live after retirement?
In the US, a 65-year-old man can expect about 18 more years and a woman about 21, on average (SSA 2023). Half of people live longer than that, which is why planning beyond the average matters.
When should I claim Social Security, and how does life expectancy affect it?
For people born in 1960 or later, full retirement age is 67. Claiming at 62 cuts the monthly benefit by 30%, and each year you wait past 67 adds 8% until age 70, so claiming at 70 pays 124% of the full amount (SSA). Counting only the total paid out, waiting until 70 instead of claiming at 62 comes out ahead if you live past about 80 and 4 months; 67 instead of 62 pays off after about 78 and 8 months, and 70 instead of 67 after about 82 and 6 months. In the SSA 2023 life table, about 60% of men and 71% of women aged 62 live past 80 and 4 months. So longer expected lifespans favour waiting, but your health, income needs, taxes and spouse or survivor benefits also matter. This is a simplified illustration, not financial advice; SSA’s own calculators give your figures.
How long should a couple plan retirement savings to last?
Plan for the longer-lived partner. For a man aged 65 and a woman aged 63, the SSA 2023 life table gives a 57% chance that at least one of them is alive 25 years later, but only a 10% chance that both are. The chance that at least one is alive falls below 1 in 4 only after 31 years, when they would be 96 and 94. These are population averages that treat the two lives as independent; the couple odds calculator shows yours.
What is the 4% rule?
A guideline from Bengen (1994): take 4% of your savings in the first year of retirement, then raise the amount with inflation. In historical US data it lasted at least 30 years.
What does this calculator leave out?
Taxes, fees, market ups and downs, and the order in which good and bad years arrive. It assumes a steady return and steady spending. Talk to a qualified financial adviser for a full plan.
Last reviewed: · Sources · A simplified estimate, not financial advice.
Sources
- US Social Security Administration. Actuarial Life Table: period life table, 2023 (2026 Trustees Report).
- US Social Security Administration. Starting your retirement benefits early (full retirement age and age-62 reduction by year of birth).
- US Social Security Administration. Delayed retirement credits.
- Bengen WP. Determining withdrawal rates using historical data. Journal of Financial Planning, 1994;7(4):171–180.