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How To Make Your Money Last As Long As You Do In Retirement

The main goal of investing for retirement is building up enough wealth to cover your living expenses (and pay for fun) for as long as you live. The problem? There is not a single soul who knows when they’re going to pass away. You can speculate all you want, but the reality is, you don’t know if you’ll last until 85 or 102.

If you’ve been crunching numbers or playing around with retirement calculators, you already know how problematic this is. Retirement planning is hard enough, but it’s nearly impossible when your timeline is an absolute unknown. If you know you’ll only live to age 85, it’s easy to put more effort into the early years of retirement. But, have you considered what happens if you live it up early in retirement and end up living to 100?

There is a natural tension between wanting to make the most of your life in early retirement and still having confidence you’ll be okay later on. This tension never goes away. The trick is finding a good balance between the two.

This tension often leads us to do some crazy stuff. You might find yourself attracted to a financial guru who promises they know the secrets to proper retirement planning; you may even listen to crabby uncle Larry who insists you won’t live a second past 72 because, well, nobody else in your family has.

This is one of the biggest issues I have with traditional retirement planning. It focuses so much on making the long-term numbers “work” that recommendations typically cause you to sacrifice more than you may need to from the early years of retirement.

Unfortunately, dire consequences can arise from believing there’s one true way to plan for retirement, or worse, sticking to a rigid retirement roadmap that doesn’t allow you to change course. With no plug and play model available to follow, it’s absolutely crucial to remain agile as you start enjoying your golden years. In other words, commit yourself to having a series of conversations that might make you realize you need to change things up.

Like it or not, there’s actually more we don’t know about our own retirement than stuff we do know. For example, we don’t know what kind of health we’ll be in, how much inflation will chip away at our wealth, or how the market will look 6 months, 6 years, or 20 years from now.

What we do know is that, if we can keep our options open and constantly assess our situation, we’ll be in the best position to make our money last.

Here are some factors you can think about as you look for ways to retire and stay retired:

Lifestyle factors: The way you choose to live can have a huge impact on how long your money lasts, but that’s especially true if you’re intentional about leaving space for changes you need to make. If you prefer to live in an expensive area with exorbitant property taxes and a high cost of living, for example, you’ll have a tougher time adjusting your lifestyle than if you live in a low-cost area, are willing to downsize to a smaller home, or are perfectly happy to move if that would help you lower your expenses.

Plus, there are other lifestyle factors to consider. How expensive are your hobbies? What are you willing to live without? And how low could your expenses go if you needed to make sweeping cuts?

Social capital: Social capital includes any payments you can count on for the rest of your life. This could be Social Security payments, an annuity you purchased, or a pension. If you’re able to secure more social capital and guaranteed income, then you’re definitely on your way to making your money last in retirement.

Just remember that, with some guaranteed income products like annuities, you may be trading flexibility and liquidity for that guaranteed check.

Human capital: In a lot of ways, you are your most valuable asset in retirement. After all, you’re in control of all the major decisions that could help your money last, including things like moving to a cheaper place or finding a way to earn some income in what I call “pre-retirement.”

While traditional retirement typically involved not working at all, retirement these days is often coupled with part-time work. Every year you continue to work, even if it’s for substantially less money than you’re used to, means you can stretch your retirement funds further and earn cash for “extras” your regular retirement funds cannot cover.

Your assets: You have two main types of assets including productive assets and use assets. Productive assets are things that have the potential to grow and provide income. Think of investment accounts, IRAs, etc. “Use assets” typically decrease in value over time and don’t provide income. Your home and toys like boats and campers are a good example. Their return comes from your enjoyment of them. It’s important to have a proper balance between the two.

The bottom line: The tension between having a great early retirement and still being okay if you live to 100 won’t go away. There are no magic products, strategies, or gurus that will provide you the security all of us naturally desire.

That’s okay. Life has always been this way. If you focus on making lots of smart little decisions on the four areas above, you’re well on your way to rocking retirement.


This article was written by Roger Whitney from Forbes and was legally licensed through the NewsCred publisher network. Please direct all licensing questions to

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