It is quite understandable many folks worry about running out of money in retirement, especially since no one knows how long they will live and what future costs will be. Go figure!
There are several ways to increase your odds in making your money last. Some ways are:
Home (mortgage payments), if possible, downsize to a smaller home, car, insurance and utilities. If you own two cars, sell one.
If possible, continue working
Even a part-time job or a side business can help raise your standard of living and decrease withdrawal amounts from your retirement monies.
If possible, delay taking payments as long as possible to enhance the monthly payout.
Consider buying guaranteed income
Most money experts agree it is a good idea to have ample income to cover your basic expenses. If these those expenses are more than what you expect from social security and any possible pension monies, you should consider “buying” additional guaranteed income such as some form of an annuity that will provide a “guaranteed” stream of fixed income, typically for life.
Select a sustainable withdrawal rate
Financial advisors typically suggest withdrawing no more than 4.00% and increasing the annual amount by the current inflation rate in subsequent years. For example, if you have $300,000 saved, you would withdraw $12,000 the first year and assuming the inflation rate is 2.00% (the current rate), you would add $240 to your withdrawal ($12,240) the next year.
Tax situations in retirement can sometimes be quite complicated. If your retirement nest egg is substantial, you could be forced into a higher tax bracket by taking your RMD (required minimum distributions) at age 70 ½, possibly causing your social security to be taxable and raise your Medicare premiums so working with a good tax person is extremely important.