How Many Years of Retirement Should I Plan For?

How Many Years of Retirement Should I Plan For?

Posted by on Feb 15, 2021


Planning for retirement can seem like a daunting task, but estimating how many years you plan to spend in retirement can help you decide how to maximize your retirement plans

We all want to live comfortably in retirement, but no one knows what their lifespan will be. Do you need to plan for 10 years of retirement, 20, maybe even 30 years? 

While there is not an exact science, there are many factors to consider when estimating how many years of retirement to plan for. 

Life Expectancy Estimates

You can find several life expectancy calculators online. Obviously, these will not give you an exact number, but it is a good starting point for planning for retirement. For example, according to the social security administration, a male born on Jan. 1, 1956, has an average life expectancy of 84 years, while a female born on the same date has a life expectancy average of 86.6 years. You can also consider factors like overall health and family history. 

Generally, it is better to plan for a longer retirement than you expect. The last thing you want is to run out of money after a few years of retirement.

When do you expect to retire?

Studies show the average age of retirement for men is 65 years old and age 63 for women. However, this number can change depending on personal circumstances. 

Despite the data, the best person to estimate when you will retire is you. Do you love your job and want to work as long as possible? Maybe you won’t plan to retire until 72. Are you longing for the days of travel and leisure? You might plan for a retirement starting at age 62, or even earlier. 

Another aspect to consider when looking at your expected retirement age is social security payments. Eligibility for social security payments starts at 62 years old, if you made contributions. However, you will not receive 100% of your benefit unless you wait until 66 years of age if you were born between 1943 and 1954. 

For example, if you retire when you are 62, you only get 75% of your monthly social security benefit. If you wait until age 70, the social security benefit can rise to 132% of your benefit amount. 

The good news is, even if you live past the age of 100, social security payments will continue. 

It is always best to work with a financial planner when making estimates for your retirement, so you take all factors into consideration. However, looking at your life expectancy and when you want to retire can help you estimate how many years you will need an income to enjoy your retirement. 

This material is for general information and educational purposes only. Information is based on data gathered from what we believe are reliable sources. It is not guaranteed as to accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions.

Start Maximizing Your Investment Property Wealth

Defer Capital Gains Taxes & Shelter Potential Income
Download eBook


Defer Capital Gains Taxes & Shelter Potential Income

Start Maximizing Your Investment Property Wealth

Discover How To Seek Passive Income Generation Without Property Management Responsibilities.

By providing your email and phone number, you are opting to receive communications from Realized. If you receive a text message and choose to stop receiving further messages, reply STOP to immediately unsubscribe. Msg & Data rates may apply. To manage receiving emails from Realized visit the Manage Preferences link in any email received.