Are you currently in danger for Outliving Your Retirement Savings?

Can undervaluing your longevity mean you will run out of retirement savings?

At age sixty five, the average life span is 81.8 yrs for a male and eighty four.8 years for a woman. At age seventy five, the typical life expectancy is 85.5 yrs for a male and 87.6 years for a female.1 With recent improvements in healthcare technology, it is not a stretch to think that you could live to be 100. Actually, the U.S. Census Bureau projects that by 2050, there will be nearly one million centenarians.

Nobody desires to die sooner, so that's great news. The issue: In case your retirement plan doesn't recognize the possibility of an extended retirement, you then can possibly outlive your retirement savings.

Consider the following hypothetical instance. Assume you are sixty four yrs old and make $60,000 each year. You plan to retire next year at the age of sixty five. You have gathered $1,000,000 in retirement savings, which you think will return a hypothetical 6 percent per year all through your retirement. Plus, you have a $60,000 yearly retirement need (excluding Social Security). If you have a 15-year retirement from ages sixty five to eighty, you will have no deficiency in retirement savings; in fact, you'll end up with nearly $696,000 to pass on to your heirs. Alternatively, when you have a 30-year retirement from ages sixty five to ninety five, you will exhaust cash at the age of eighty eight.3 The table beneath illustrates. Of course, this example above is theoretical and for illustrative functions only. It is not designed to represent the performance of any specific product.

Will you use up all your retirement savings?

Hypothetical retirement money needs

Age	Savings	Retirement savings required for annual living expense
64	$1,000,000.00	$0.00
64	$1,059,999.94	$0.00
66	$1,058,028.28	$61,860.00
67	$1,053,905.60	$63,777.66
68	$1,047,439.82	$65,754.77
69	$1,038,425.39	$67,793.17
70	$1,026,642.42	$69,894.76
71	$1,011,855.72	$72,061.50
72	$993,813.88	$74,295.41
73	$972,248.18	$76,598.57
74	$946,871.51	$78,973.12
75	$917,377.18	$81,421.29
76	$883,437.69	$83,945.35
77	$844,703.39	$86,547.66
78	$800,801.08	$89,230.64
79	$751,332.50	$91,996.79
80	$695,872.80	$94,848.69
81	$633,968.79	$97,789.00
82	$565,137.20	$100,820.46
83	$488,862.75	$103,945.90
84	$404,596.18	$107,168.22
85	$311,752.06	$110,490.44
86	$209,706.59	$113,915.65
87	$97,795.12	$117,447.03

Source: Burling Bank. Presumes $1,000,000 in retirement savings has already been gathered; an additional $60,000 is added. The cash increases at a theoretical 6 percent per yr; $60,000 (in today's dollars) in withdrawn every year. This example above is theoretical and for illustrative functions only. It isn't meant to represent efficiency of any particular item.