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How Long Will Your Retirement Savings Last?

Do you wonder if you've saved enough to fund your retirement or are you worried that you haven't? Don’t leave your retirement security to chance. Take control of the situation by estimating what your spending needs in retirement will be, and identifying what retirement assets you have, or expect to have. You might be pleasantly surprised. If you're not where you want to be, you can develop a solid action plan to get there.

Rule of 25


Before you can determine if you've saved enough to fund your retirement, you need to know how much that retirement will cost. Will you own your home by the time you retire, likely reducing your largest expense? Will you be downsizing by selling your current home, buying a smaller one, and investing the difference? Do you plan to travel in retirement? Do you have a medical condition that will result in significant expenses?

The first step is to estimate your annual spending in retirement, then you could use the Rule of 25 to help determine how much money you may need to have squirreled away to support your lifestyle.


Once you have an annual spending target, take a look at all of your retirement assets. You fund your retirement through a combination of personal savings, Social Security, and retirement plans like your 401(k) and IRA. Ask yourself the following questions:

•  Will you be eligible for Social Security benefits? If so, what is your benefit estimated to be?
•  Will you be eligible to receive a pension from an employer-sponsored defined benefit plan? If so, what is your annual benefit? Is it adjusted for inflation?
•  What are the balances of your 401(k) and IRAs?


Your investment strategy may look different than it did during your working years. You will also want to have a plan in place for investing your savings that will help make sure your money lasts throughout your retirement. If you are primarily invested in stocks while employed, do you have a plan to shift some of those investments into more conservative options as you approach retirement? Have you balanced the need for capital preservation with the need for growth? Your financial advisor can help you answer these questions.

Withdrawal Rule

If you are worried about outliving your assets or generating a consistent stream of income, one option is to purchase an annuity with some of your retirement savings. An annuity will provide you a guaranteed stream of payments until your death, or over the lives of both you and your spouse. However, in exchange for this certainty, you need to keep in mind that once funds are used to purchase an annuity, you can't get them back or change the scheduled payment amount.

Another option is to invest a portion of your assets in income-generating investment vehicles. These include fixed income investments, such as a collection of bonds or certificates of deposit (CD) that mature each year. The benefit to using a bond or CD ladder with staggered maturity dates is that income is guaranteed. However, what you gain in stability, you lose in asset growth potential since the interest earned tends to be very low compared to other investments. Another option is an investment in Treasury Inflation-Protected Securities, which protect against the effect of inflation. Ask your financial advisor which investment strategy fits your situation.


Determining if you’re financially ready to retire is complex, so once you’re approaching retirement, you may want to seek the assistance of a financial professional.

Your MassMutual Retirement Specialist is also available to discuss the options available within your retirement account. Call 1-800-854-0647 with your questions, or for assistance.

Don’t know how much to save for retirement? Our Retirement Planning Calculator can help you find out if you’re saving enough, or if you need to do more.

The information provided is not written or intended as specific tax or legal advice. MassMutual, its subsidiaries, employees and representatives are not authorized to give tax or legal advice. Individuals are encouraged to seek advice from their own tax or legal counsel.

© 2018 Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.  All rights reserved.