Quick notes:

  • Expenses have a huge impact on how far savings go, and there are ways to manage them.
  • Just because you’re retired doesn’t mean you can’t have an income too.
  • You might have assets you hadn’t considered leveraging.

You’ve been saving for retirement almost since the moment that you began working. It has taken discipline, some amount of research, and the right financial planner. Now that you’re nearing retirement you’re ready to benefit from your hard work and sacrifice. Naturally, you may be asking yourself, how long will my money last? How can I make it stretch further?

There are a lot of factors that can impact how far your savings will take you. These include the size of your nest egg and how aggressively you’ve invested what you have. But there are other factors that also come into play.

1. Expenses

One of the biggest factors in how long your retirement funds will last is how fast you are planning to spend them. To help get a handle on this, try to establish a budget outlining what you think you’ll want to pay for during your retirement.

Naturally, you’ll need to include the basics first. Things like housing costs, utilities, and food expenses. Then layer on costs for some extras like large and small scale vacation planning or paying for hobbies.

Take it a step further: There are a couple of ways to reduce your expenses and make your retirement funds last longer. Sure, you can pare back things and spend less on hobbies or splurges. More creatively, give some thought to where you may want to call home. Some places in the U.S. have a lower cost of living than others. Some places abroad can be even more reasonably priced.

2. Income after retirement

Is it possible for you to find an after-retirement income source that won’t cramp your lifestyle? If so, it will help make your nest egg last.

Another factor that can affect the duration of your retirement savings is your ability to continue to earn income after you’re no longer fully focused in your career. You may not be climbing a corporate ladder or showing up to a desk from 9 to 5 each workday, but that doesn’t mean you can’t use your days to earn some green stuff.

If you have a hobby you love, see if you can earn money from it. If you’ve been interested in a lower-paying type of work that you couldn’t do while your career was in full-force, you may have more time to experiment from it.

Take it a step further: While you’re searching for a supplementary line of funding, consider seeking out a passive income stream that will give you funds while requiring minimal amounts of your time and effort. Real estate is a classic example of this kind of business effort, but there are others.

3. The ability to leverage current assets


As you are planning to retire, consider if there are larger assets that you can leverage to provide you with income. For example, is it possible for you to take a reverse mortgage out on the home that you’re currently living in? Do you have a share in any substantial businesses that could provide you with ongoing income?

Keep in mind that this approach to supplemental income can be risky and may have dramatic effects on the value of your estate and on what you’re able to leave behind for heirs. It is wise to consult with a financial advisor so you fully understand all of the implications to these approaches.

Take it a step further: If you have enough time before you expect to retire, consider any opportunities you may have to gain access to assets that you could benefit you once you stop working. Consider if you can tolerate the risk required to take part.

A deeper dive — Related reading from the 101

Depending on what (or who) you’re willing to live with, cheap housing is out there.

Some tips on padding the ‘ole nest egg.