by Gary Foreman

Will you outlive your retirement savings? If you are over 50 and have not thought about this question, you likely will at some point. We get expert advice on making our money last as long in retirement as we do.

They are key questions that everyone faces as they near retirement. How much can I take from my savings each year and still not outlive my money? And how do I manage my retirement accounts to maximize the amount that I can take each year?

To help us answer these questions, we contacted Bryan Slovon, founder and CEO of Stuart Financial Group. He provides financial planning services exclusively to retirees and soon-to-be retirees in the District of Columbia metro area.

Q: Traditionally, it was always felt that you could take 4% per year from your investment accounts without the risk of outliving your principal. Why 4%?

Mr. Slovon: 4% has been the figure most regularly used from the investment community. Through back testing and market history, it’s been found if an account is allocated properly, this amount can be successful in the long run.

Q: When people calculate how much is in their retirement accounts, they should include IRA’s, 401k’s, investment properties, and other investment accounts. What about their home if it’s a valuable asset that they plan on selling in the not-too-distant future?

Mr. Slovon: The home may be used if the assets from it will be available to invest. However, most of the time, there is a new purchase involved and that may or may not use up the monies from their home that is being sold. This is really on a case-by-case basis.

Q: Inflation has been fairly quiet in recent years, but now it has returned. Should retirees adjust how much income they take from their accounts? Their cost of living has gone up, so they need more income. But if they take more, they’ll deplete the principal. Is there a right answer?

Mr. Slovon: The right answer is to readjust assumptions each year and come up with a withdrawal rate that can work. Sometimes it’s okay for monies to be spent down if there are other assets that will go to the family. Maybe the client has no heirs. If this is the case, he/she may not be concerned about what they leave behind.

Related: How To Leave a Legacy With Your Life Insurance

Q: Retirees have always been told to reduce their investment risk as they get older. With life expectancy increasing, is that still true?

Mr. Slovon: Yes, they are still getting closer to the finish line and have less time to recover from market corrections. On average, it takes about seven years to recover. Seven years is a long time for a retiree.

Related: How To Minimize 4 Risks to Your Retirement Savings

Q: Many people are working past retirement age. Some keep part-time jobs well into their 70s. How has this trend affected what you tell retirees about their investments?

Mr. Slovon: People are working longer and longer. However, they still have to be concerned about age-appropriate investing and holding on to what they have worked for over a lifetime.

Q: Many people lose their jobs a few years before they’re ready to retire. What advice can you give them?

Mr. Slovon: They should keep on top of their planning and control the things in their lives that they can control.

• Will You Outlive Your Retirement Savings?
• Commonly Overlooked Retirement Expenses
• The Importance of Managing Debt as You Near Retirement
• Closing in on Retirement With Very Little Savings

Reviewed July 2023

About the Expert

Bryan Slovon is the founder and CEO of Stuart Financial Group, a boutique financial planning firm exclusively serving retirees and soon-to-be retirees in the District of Columbia metro area. He is a financial planner specializing in retirement planning and wealth preservation to a select group of clients. He currently holds his Series 65 license and is a Registered Financial Consultant as well as a Comprehensive Wealth Manager offering investment advisory services through Global Financial Private Capital, an SEC registered investment advisor.

About the Author

Gary Foreman is the former owner and editor of the After50Finances.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.