What if I Outlive My Savings?

Many of us may need to financially survive until age 120.

Ruth Saldanha 18 May, 2021 | 4:28AM
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Ruth Saldanha: You are happily retired, living your best life. Late one night, you wake up in a cold sweat from a nightmare. You're running out of money. What if I outlive my savings?

The fact is, we are living longer. World over life expectancy is rising, especially in the developed world. It isn't inconceivable that you or some of your peers might live to 120 years old. In that scenario, can you retire at 65? Will you have enough? First, don't panic. You have a couple of options.

Christine Benz: You really have two levers if you don't have enough. The first is to continue working. The second is to find ways to lower spending in retirement, like downsizing your home or relocating to a cheaper locale.

Saldanha: Start by considering your retirement plan with fresh eyes. You may want to travel the world or buy a motorcycle, or you may be sick. All of this needs money. Ask questions like how long will you continue to work, how much will you save, what's your health going to be? Understand that standard investment strategies may no longer fit your individual needs. So, you may need to adjust your strategies, you may need to work longer, pursue more aggressive investment strategies for longer than you'd intended.

Next, look at your spending. How much is necessary and how much can be manipulated just a little? Ask yourself if your habits are sustainable. Once you know where you are, you can adjust again.

This video was scripted by Susan Zhou

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About Author

Ruth Saldanha

Ruth Saldanha  is Editorial Manager at Morningstar.ca. Follow her on Twitter @KarishmaRuth.


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