7 Ways to Make Your Savings Last in Retirement

Table Of Contents

    Are you nearing retirement and getting a little nervous about what the next stage in life will bring and whether you are prepared or not?

    Or perhaps you’ve already made the plunge and retired, but now that you’ve done so you have some anxiety regarding whether you have the financial wherewithal to ensure your savings will last.

    Both scenarios are common, leaving many people questioning how they will go about making their retirement savings last.


    Fear can be debilitating in many areas of life. It’s not pleasant and no doubt we all try to avoid issues, circumstances and events that can trigger the emotion.

    But it can also be a motivator that can be healthy when harnessed correctly to motivate and make you work harder when trying to achieve something.

    In the case of retirement, it’s fair to say many people fear not having enough saved, or even worse, outliving their savings. You may feel this, fearful of becoming debilitated and ending in a home that is not your own or bereft of the very people who gave meaning to your life.

    While those things are real, and certainly outcomes none of us wish to face, just as with many fears in life, they can be dealt with and potentially avoided by taking them head on.

    While it’s important to remember that there are no guarantees in life – death and taxes, as it were – there are prudent things that you can do to help ensure your savings last throughout your retirement and hopefully assist you achieve your goals and dreams in your golden years.

    Today we look at 7 ways you can make your savings last in retirement:

    Long term view

    The first thing you need to do when addressing the issue of making your savings last in retirement is to be honest about the fact you can’t know how long that period might end up being. That uncertainty doesn’t sit well with the average person.

    With that given, you need to remember that financial strategies and emotional behavior are critical to making your money last in retirement. The decisions and actions you take now and near term will directly impact your money and situation in the future.

    More simply stated, plan long-term now so there are no surprises, no matter how long you (and a spouse) might live.

    For some context, according to the Centers For Disease Control and Prevention (CDC), the average life expectancy nowadays for both sexes is 76.4 years. But if you live till your 90, that’s an additional 14 years. And that number could obviously grow even longer.

    How can you plan for such uncertainty?

    Discipline and strategies will need to be utilized, such as continuing to grow your savings through market investment for longer than you might have anticipated. And looking for a source of guaranteed income that you can’t outlive, among other things.

    Budget for retirement

    The long and short is the fact that living successfully in retirement requires a well-constructed budget. And this starts with an examination of what you have going on in terms of your lifestyle and meeting your bills.

    You can look at your current income and costs to get you rolling. If you’re still working you know that this budget is what’s covering the bills and hopefully leaving some  aside for savings and emergencies.

    Assuming that is true, there are varying estimates that you’ll need 70- to 80-percent of your pre-retirement income to maintain your current standard of living in retirement. This is a good starting point in terms of what will be needed.

    If instead you’re already retired, then you know what you have and what you’re spending. Be honest. Are you meeting your bills and able to maintain this or are you falling behind and dipping into your savings at a rate that is unsustainable over the long run?

    That’s exactly the issue you wish to avoid.

    As would be expected when budgeting, you need to look at the expenses you will incur in order to simply live and maintain your current standard of living. But given this is your retirement, you need to also account for what meeting your needs, desires and goals during your golden years will entail.


    Start by looking at current and anticipated expenses, which can be a long list. Be sure to account for the following monthly expenses:

    • Housing
    • Food
    • Transportation (auto, gas, maintenance and repairs)
    • Utilities (water, electricity/gas, phone, Internet, etc.)
    • Healthcare and associated prescriptions and products
    • Insurance (medical, life, auto, home/renter, etc.)
    • Entertainment
    • Infrequent travel
    • Emergency
    • Investment
    • And more

    Beyond these, you need to consider what your retirement goals are, including frequent and or extensive travel, paying education costs for kids and grandkids, need for a future vehicle, purchasing a vacation home, gifting and charitable giving, engaging in expensive hobbies, passing on your wealth to family and/or charities, and more.

    While those lists are fairly exhaustive, there is a big item missing – Long Term Care insurance or LTC. Many people forget…or willingly choose to ignore this issue, estimating they will be the exception. This can be a major mistake capable of wiping out your retirement savings:

    LTC Facts:

    According to the Kaiser Family Foundation or KFF, 70-percent of people aged 65 and older will require LTC at some point.

    As you can imagine, LTC insurance is not cheap and gets more expensive with each passing year.

    According to the American Association for Long-Term Care Insurance (AALTCI), if you’re 55 you could pay an annual premium of $950 for a level-health (value of policy never increases) $165,000 policy. The same policy for a female will cost an average of $1,500, and for a 55-year-old couple the combined cost is just over $2k.

    If you wait to purchase any of those same policies until age 65, those costs nearly double.

    If you don’t have an LTC policy, the AALTCI estimates your annual out-of-pocket cost on long-term care could range from $20k to $100k, depending on the type of care needed.


    This is why we list LTC separately. You need to consider it as not having it could wipe out your savings later on if you don’t plan for it!


    When it comes to what you have in order to cover all your normal bills and the additional expenses you identified in the previous step, you should consider all sources of income, which probably include the following:

    • Retirement savings (qualified accounts, such as 401(k)s, IRAs, etc.)
    • Pension income
    • Non-qualified accounts (bank and savings accounts, brokerage, CDs, annuities, etc.)
    • Property/real estate (including rental payments)
    • Social Security
    • Passive income
    • Part-time employment, owning your own business, etc.

    With your expenses and income identified, you will have the information necessary to know where things stand. Importantly, you will have identified the information necessary to create or update your retirement plan – your roadmap for living in retirement.

    Now if you find you have enough income to cover expenses and the things you want to do in retirement, your golden!

    Chances are you are worried that may not be the case or have a healthy sense (a bit of fear) that you need to start proactively looking at ways to possibly increase and make your retirement savings last.

    Let’s look at some things you can do if that’s your scenario.

    Spending it down – distributions

    Distributions are a major part of living in retirement. Unless you have the means to live without tapping into your savings, you will probably have to take distributions from your retirement accounts and possibly other buckets of income, such as social security, cash, rental income, etc.

    When it comes to distributions, they are not all the same. A big question is always where you take the money from. And a common belief is that you should hold off on taking distributions from your retirement accounts until later.

    The fact is this could cost you significantly more in taxes in the year(s) you take a distribution from those accounts. Instead it might be better to take a portion each year from different accounts (including IRAs) starting early on in retirement.

    There’s also the issue of Required Minimum Distributions (RMD), which requires you start taking distributions from your qualified accounts once you reach age 72 (73 if you reach age 72 after Dec. 31, 2022). That amount increases each year, and if you fail to take the distribution you can be looking at a 50-percent penalty for the amount not taken as a distribution, in addition to the taxes owed.

    Given the importance of distributions you will probably take in retirement, you want to have a distribution plan and tax strategy in place that will help dictate from which accounts and in what amounts you take those funds each year.

    This will probably require the services of a qualified retirement planner to help you put tax strategies in place to help minimize your taxes. In doing so you can potentially save yourself thousands to even tens of thousands over the course of your retirement. This can be a major factor in making your retirement savings last.

    Pay off debt

    Carrying debt into retirement is generally something you want to avoid if possible. This can include everything from a mortgage and auto payment to other installment loans, credit cards, store cards, and more.

    That said, not all debt is the same. If you have a mortgage with a low rate, it may or may not make sense to pay it offsimply because you’re nearing or in retirement. Your plans relating to the home – whether you want to remain in the home or relocate – the current market value, remaining balance, location of property, and other factors can go into the decision.

    When it comes to the rest of your debt, you do want to pay it off in a prudent manner as soon as possible. High interest-rate debt can wreak havoc on a budget and negate the compounding interest benefit that you need to drive growth in your retirement accounts.

    Stay invested

    When it comes to retirement there is a common misconception that you should go completely conservative in order to protect what you have. For some, with plenty saved, that may be true.

    For many others, they will need to continue to stay invested in order to try to build their savings so they can meet their retirement needs going forward.

    There’s the additional consideration that many forget – taxes and inflation, which you must account for and stay in front of in order to protect your retirement over the long haul.

    In order to stay invested while balancing your risk tolerance, including capital preservation, you will need to find the right allocation that provides safety as well as growth potential.

    Many people start to incorporate blue-chip dividend stocks as a part of their portfolio, providing income and potential capital appreciation.

    There’s other strategies as well, such as using annuities to provide income you can’t outlive, real estate that can appreciate in price and potentially provide income, and more.

    In the case of an annuity, a Fixed Index Annuity (FIA) can give you the ability to participate in market upside without the downside of direct exposure, given you’re not directly invested in the market so you don’t incur losses in a down market year.

    Additionally, they can provide you with the possibility of lifetime income, which ensures you and potentially your spouse have needed income later in life.

    Delay Social Security

    No doubt you’re aware of Social Security. But for many, while they are aware of the government benefit they know little else. That can cause them dearly.

    When it comes to starting your Social Security payments, you become eligible at age 62. But if you start then your lifetime monthly payments will be discounted approximately 30-percent.

    Consider the fact that in 2023 the typical individual receives $1,782 per month, according to the Social Security Administration. Were you to start at age 62 you’d be looking at a discounted amount of $1,247, a negative difference of $535 monthly or $6,420 annually. And that’s for your lifetime.

    If instead you wait to start drawing the benefit until you reach full retirement age (age 67 if you were born in 1960 or later) you’ll receive your full benefit. Were you able to hold off on taking the benefit till age 70, the benefit would actually increase to $2,210 monthly for life, which equates to just under a thousand dollars more monthly versus starting at age 62.

    Hold off on retirement

    This may be the last thing you wish to hear when you are approaching retirement, but you may want to consider holding off in order to make your savings last.

    If you’re fearful about not having enough, you have lots of company. According to Clever Real Estate’s retirement preparedness survey (State of Retirement Finances: 2023 Edition), almost half of American’s Believe they will outlive their assets. And 37-percent have no retirement savings at all.

    Fact is that waiting to retire might be your best choice, like it or not. The reality is you may not be able to continue working longer due to heath issues (yours or a spouse or loved one) or for other reasons, but if you can it’s worth considering. In doing so, there can be a number of benefits that can help make your retirement savings last longer.

    If you do delay retirement you can reduce the number of years you’ll have to pay yourself in replacing that paycheck you’re used to getting every month. Even delaying two to three years can make a huge difference, especially when you consider you don’t have to tap your retirement saving during that period, which allows your savings to continue to compound and grow.

    There’s also the issue of continuing to receive insurance coverage from your employer. This can eliminate your need to purchase it on your own when you retire if that’s before turning age 65 and becoming eligible for Medicare coverage.

    And finally, that’s more time to contribute to an employer-sponsored plan, thus increasing your retirement savings before you walk out the door for the last time. Additionally, if your employer offers matching on your contributions each year, that’s even more you will potentially have in qualified savings when you do retire.

    If instead you’ve already retired, you might want to consider working for yourself (maybe as a consultant to your old company) or taking on a part-time job. Or starting a small business.

    These actions can be good options, allowing you to continue to pay some portion of your monthly bills (less need to draw on retirement savings), with the added benefit of keeping you active and engaged, which is good for your mental and physical health in retirement.

    Whatever decision you end up making, you want to do what’s best for your situation and peace of mind versus arbitrarily picking a particular age or date at which time to retire.


    When it comes to examining your portfolio and asking whether you have enough saved and how you can make those savings last, you need to get specific.

    Rules of thumb, such as the aforementioned 70- to 80-percent rule, or the 4-percent rule (you can spend about 4-percent of savings annually in order to make them last), might be good starting points, but you want to get granular in looking at your retirement plans.

    The good news is there are things that can be done in order to give you the best opportunity to make your retirement savings last. But ultimately it comes down to discipline and having a good plan in place to follow – one that acts as a roadmap for your journey through retirement.

    When it comes to ensuring you have a good plan in place, we at Oak Harvest can assist you. We can review your existing plan if you have one.

    Or we can assist by building a holistic, comprehensive retirement plan addressing relevant issues, utilizing strategies that cover taxes, income, spending, healthcare, LTC, legacy, and more, customized to your family’s specific scenario.

    A plan created with the goal of ensuring you have the best opportunity to live out the retirement you and your family envision.

    If you are ready to take the next step and talk to a team of retirement planners who can advise on all your retirement needs, and who will put your interests first, Schedule a call today!

    Let Us Help You Achieve the Retirement You Deserve!

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