How Long Will My Savings Last in Retirement?

One way to make your savings last longer is to reduce your fixed expenses. For many people, their largest expense is their mortgage. Consider downsizing to reduce mortgage and property tax costs. Smaller homes also mean lower costs for utilities and insurance.

Financial professionals recommend that recent retirees should withdraw no more than 4% of their portfolio in the first few years of retirement to avoid what is known as "sequence of returns risk". Studies show that the order of market returns matters greatly, and the first few years of retirement are critical. If you experience a down market or are forced to make large withdrawals early in your retirement, you increase the odds of failure.

Understand the difference between what you absolutely need to pay for—food, housing, healthcare—and more discretionary “wants”—like vacations, cars, and eating out. Most people’s incomes will drop in retirement, and you may have to reassess your expectations and habits to ensure that you won’t run out of money.