How long will my retirement savings last?

According to a recent Federal Reserve study, only 31% of working Americans believe their retirement savings are on track. Do you know where you stand and how long your nest egg might last? Our retirement calculator provides a convenient way to establish your goals and monitor your progress at a high level. If your current progress is a bit off target, you can be provided with tips to help adjust your retirement savings strategy. You can test the calculator now or read on to learn more about the key inputs for planning a successful retirement.

How much do I need to save for retirement?

The Guardian retirement calculator was designed to help you look at your retirement savings goals and where you stand. Our calculator can help you understand if you're on track or falling behind, making it easier to make adjustments along the way.

The retirement calculator takes into account your current age, desired retirement age, current savings, and planned savings rate — as well as factors like inflation and investment returns. The answers will help you understand where you are in your retirement planning journey.

How long will my retirement savings last?

These are the main factors that affect how long your savings will last:

• Your estimated savings at retirement (in saving and investment accounts, as well as tax-deferred 401k’s, IRA accounts, etc.)

• Your retirement income (from Social Security, pensions, part-time work, passive income, etc.)

• Your estimated expenses in retirement

• Your investment returns

• Your federal marginal tax bracket in retirement

• The rate of inflation

• Unforeseen expenses

This is a lot to think about. and if you're unsure how to calculate this information, consider working with a qualified financial professional to help you develop thoughtful estimates based on your situation and goals.

On the other hand, if you are just looking for a quick estimate of what you can expect to need in retirement and don’t want to contact a financial professional or input all the information needed for the retirement calculator, there are simple ways to test your retirement readiness, like the “4% Rule.”

Estimating a “typical withdrawal rate” with the 4% Rule

The 4% rule maintains that if you withdraw 4% of your assets each year, there is a strong likelihood that your savings will last for 30 years or more. For example, if you retire with $1 million in savings, according to the 4% rule, you can safely withdraw $40,000 per year, plus an inflation adjustment in future years. This rule is based on the original Trinity study, which tested the theory over a large sample of 30-year periods. The 4% rule also assumes that you have about 50% of your portfolio in stock investments, and about 50% in fixed income investments.¹ Remember that the rule assumes that you keep your money invested during retirement – which means you're subjecting your savings to investment risk and the possibility that you could lose money. Although the rule has been a good barometer for investors historically, there are no guarantees that your assets will last 30 years even if the rule is followed.

The retirement calculator and the “4% rule” are tools that can help working age investors plan for a successful retirement. But what about those who are already at or past retirement age? There are a few strategies that can help make retirement income last longer.

4 strategies to make your retirement money last longer

These actionable strategies can help you preserve your nest egg once you stop working.

1. Consider spending Social Security income first

If you are at least 62 years old and have paid taxes for at least 10 years, you should qualify for Social Security benefits.² The average benefit in 2024 is $1,907 per month (but varies based on your income and retirement age). But remember: if you delay taking benefits until age 67 or even later, your monthly amount will be higher. You can estimate your benefit by using this Social Security benefit calculator or by logging into your Social Security account.

To help optimize your retirement spending, consider spending Social Security payments first for all your routine costs — then figure out how much you need to withdraw from savings to cover your other retirement expenses. This can help reduce the amount you have to withdraw from other investments, which can also help you save on taxes and keep your assets invested longer.³

2. Consider remaining invested in retirement

Ideally, you should consider investing your savings throughout your working career and during retirement. Most financial professionals suggest diversifying investments in a variety of stocks, real estate, and fixed-income assets like bonds and annuities.⁴

Crucially, it’s important to stick to an investment strategy once you retire. This can help your retirement savings to continue to keep pace with inflation. Most retirees choose to reduce the risk level of their portfolio once they reach retirement, for instance, by shifting some of their assets from stocks into bonds. If you're unsure what to do with your portfolio, speak with a financial professional to help you map out an investment strategy.

3. Consider using a dynamic withdrawal strategy

Instead of making regular withdrawals of a fixed amount from your savings each year — 4%, for example — you can change your withdrawal amount based on market conditions.

For example, if the stock market is down, you may choose to withdraw only 3% of your portfolio that year. Then, fill in the gaps with other savings or by temporarily cutting expenses. If the stock market is doing well, perhaps you withdraw 4% or 5% and save any extra proceeds for a future year. This strategy means you may be able to sell fewer assets when prices are low, helping preserve your wealth.

You can also help establish more stable retirement income by using insurance products like annuities. These assets can provide stable, guaranteed income, regardless of stock market performance.⁵ If you have enough income from bonds or annuities to cover of the majority of your monthly expenses, you may have greater flexibility when covering large one-time expenses from your retirement assets.

4. Optimize your tax strategy

You may still be required to pay taxes in retirement — often for the profits you've made on your investments. If your funds are in tax-efficient accounts like a 401(k) plan, your withdrawals are still subject to tax, but presumably at a lower tax rate than during your peak earning years. Further, certain post-tax accounts, like a Roth IRA, may allow for tax-free withdrawals.

There are specific strategies you can use both before and during retirement to help reduce your tax bill — and potentially boost your spending money. For example, you might consider keeping your taxable withdrawals under the 0% capital gains tax threshold ($44,625 for single filers, as of 2024). To work out the specifics of your financial situation, you can speak with a tax professional.

Guardian can help

To learn more, consider speaking with an experienced professional who will take the time to learn about your unique situation and explain the different solutions that can fit your needs. If you don't know a financial professional, ask your friends for a recommendation – or click below to find a Guardian financial professional in your area.