Counting down the days to retirement? One burning question which seems to be on everyone’s mind is, “How long will my money last in retirement?”

Cut it too tight and you face the risk of running out. Not taking into account unknown expenses or variables could leave you wishing you kept working an extra year or two. When calculating how long your money will last in retirement, don’t forget to factor in these variables.

Your Rate of Return in Retirement

An important factor to consider about your investments is your rate of return during retirement. This could have a huge effect on how long your retirement money lasts.

In periods of low interest rates, safe investments such as CDs and government bonds offer less of a return than during seasons of high interest rates. The same goes with stocks. Markets vary and it’s impossible to know exactly the rate of return you’ll earn in retirement.

Basing your numbers on an average isn’t the answer either. It means half the time you’d earn below average.

Look at historical returns and the best and worst case scenarios. Run different scenarios so you know how to adjust your plan (aka spending) if below average returns are happening when you retire.

Health Care Expenses

The majority of your expenses in retirement could be for health care. These services are not free and they’re not cheap.

While Medicare may cover some expenses, it doesn’t cover all. You must look at the total cost of health care during retirement including Medicare and Medigap premiums, copays, prescriptions, as well as, hearing, dental, and vision care.

Estimate your overall health care expenses and assume you’ll spend your entire deductible each year. Aim high for extra cushion. If you don’t spend it all on health care, you’ll have extra money to spend on something else.

How You Spend Your Money

Looking forward to taking trips a couple times a year? While you may remember to budget for golf, eating out, and trips to visit the grandkids, don’t forget other important life expenses including home repairs, a new car every so often, and emergencies.

Be careful to avoid lavish spending if you experience great returns early on. This may not continue through retirement and should be stashed away for a rainy day. If you withdraw too much too soon, 10-15 years later your retirement plan may be in trouble.


Inflation is real. Stuff costs more than 20 or 30 years ago. Inflation may not affect the wealthy as much, but lower income households may feel the pinch.

Essential household items including food, energy, and basic necessities will rise and lower income households typically don’t have extras in their budget to make the cut.

Watch your spending each year and adjust as necessary. Consider starting a garden, investing in an energy efficient home, and using public transportation to keep costs down.

How Long You Will Live

The average person could live to their mid-80s. But are you really average? In reality, half live longer than average with some people living much longer. It’s better to plan for living longer than running out of money early.

Estimate the life expectancy of you and your spouse in your timeline of income and expenses. To supplement your later years, invest in Long Term Care Insurance now to help cover the high cost of personal care services later.

Get an online quote for Long Term Care Insurance for you and your spouse. Make sure you are retirement ready so your money lasts as long as you do.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.