How long will my retirement savings last?

It’s no secret that people are living longer and longer these days. And that’s fantastic, except when it comes to planning your retirement. It means you have to be that much more disciplined about getting your financial house in order; otherwise you may outlive your money.

Just how long will you live?

With so many things to factor into planning your retirement, calculating longevity can become one of the things that often falls between the cracks. But it’s one of the most crucial factors in accurately calculating how much money you’ll need to last you for the long haul. A good place to start is the Social Security Administration’s Life Expectancy Calculator. This will give you a life expectancy calculated by your date of birth and gender, as well as life expectancies at future dates. In addition, think about the longevity of your immediate relatives. Did your grandmother live to be 102? Are your parents or siblings fit and sharp in their 70s and 80s?

It’s also important to factor in your lifestyle. Do you spend your time painting or rock climbing? Would you rather practice yoga or go bungee jumping? Think about whether the activities you enjoy are risky or not.

Last but not least, consider your own health. Factor in any medical conditions you may have, but don’t forget about things like flexibility, balance, muscle strength and mental agility. All of these things will give you a complete picture of your overall health.

Making spending cuts may seem painful today but it’ll help you be better off tomorrow.

Taking control of your expenses today can help make a difference when it comes to living comfortably and securely tomorrow. Using the Budget Calculator, you can run “what if …” scenarios to plan for the future. For instance, if you are in your 60’s, run a “What if …” for your 70’s and one for your 80’s. Be sure to factor in inflation (the historic average is 3% or if you are working with a financial professional, they should have more accurate projections).

Imagine how, as you grow older, expense priorities could shift. Entertainment and travel costs may go down, but healthcare expenses could go up. If you’re part of the “sandwich” generation, you may need to take care of aging parents, your children and yourselves. Don't forget to take inflation into consideration. Plan now on how you can keep as much of that profit as possible with appropriate tax strategies. A financial professional can help you crunch the numbers and objectively review the decisions to help keep your retirement spending in line with your income.

Bringing it all together

Be holistic and realistic when you’re calculating your longevity and your resources. Use that information and your planned retirement age to figure out how many years you can expect to live in retirement. This will help you and your financial professional calculate how much of your savings to draw each month so you can enjoy retirement to the full — while helping to ensure that your money will go the distance with you.