North County San Diego
How long will my money last?
Nobody can answer that with a number, and you should be careful with anyone who tries. What can be answered is what decides it, and three of those things are inside your control.
Nobody can answer that with a number, and you should be careful with anyone who tries. What can be answered is what decides it, and three of those things are inside your control.
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Narrated in Rosario Scappaticci’s voice · 19 min
This narration uses a synthetic recreation of Rosario Scappaticci’s voice. It reads the article above and is provided for convenience. Where the audio and the written page differ, the written page governs.
How long your money lasts is decided by four things: how much you take out, what order your returns arrive in, how long you live, and what you get hit with along the way.
Only the first is fully under your control. The second is entirely outside it. The third you can plan for but not choose. The fourth is what actually ends most plans.
Anyone who answers this question with a single number, "your money lasts until 94", is telling you the output of a model, not a fact. The number moves the moment any assumption behind it moves. What is worth understanding is the machinery underneath, because that is what you can act on.
This is the least intuitive thing about retirement, and it is worth slowing down for.
While you are saving, the order of your returns does not matter at all. Not "matters a little", mathematically, not at all. Take any set of annual returns and shuffle them into any order you like: the ending balance is identical every time. Multiplication does not care about order.
The moment you start withdrawing, order becomes decisive. Every withdrawal permanently removes shares from the portfolio. When you sell into a decline, you liquidate more shares to raise the same dollar amount. Those shares are gone. They are not there to participate in the recovery when it comes.
So two people can retire with the same balance, experience the identical average return over the identical stretch of years, and end up in entirely different places. Not because one was smarter. Because one of them met their bad years early and the other met them late.
This is called sequence of returns risk. It is the reason the years immediately around your retirement date carry more weight than any others.
One honest note, because you will see this dramatized elsewhere. The researcher who has studied this most rigorously, Javier Estrada of IESE Business School, concluded that sequence risk is real but routinely overstated, and that the alarming illustrations that circulate describe historically rare scenarios. His own conclusion was that retirees should be aware of it but probably not lose sleep over it. We agree. It is a reason to plan the first decade deliberately, not a reason to be afraid.
Ask most people how long to plan for and they reach for life expectancy. It is the wrong tool, for two reasons.
US life expectancy at birth was 79.0 years in 2024. That figure includes everyone who died young. It does not describe you, because you have already survived the years that pull it down.
The relevant figure is life expectancy at 65. A 65-year-old man can expect on average 18.4 more years, while a 65-year-old woman, 20.8 more years, to roughly 83 and 86. That is already several years beyond where most people are planning.
Life expectancy is a mean, not a finish line. Because the distribution of deaths after 65 is skewed, slightly more than half of 65-year-olds outlive their own life expectancy, roughly 53% of men and 54% of women.
Planning to the average means planning for a coin flip. If you lose that flip, you lose it at 90, with no ability to go back to work.
This is the point that changes the whole picture. Almost nobody applies it. Your plan does not need to last until you die. It needs to last until your spouse dies.
Working from Social Security's life tables, for a couple both aged 65 there is roughly a 50/50 chance that at least one of them reaches 90, and roughly a one-in-five chance one reaches 95. A plan built around a single life expectancy is planning for the wrong event.
The couple figures above are our own calculation from Social Security's 2023 period life table, treating the two lives as independent. Real spousal lifespans are positively correlated, which pushes the true figure somewhat lower. The table also assumes no future improvement in mortality, which pushes it higher. Treat it as "roughly half," not as a precise probability.
You have almost certainly heard it. It is worth knowing what it really is, because the version in circulation is not the version that was written.
It comes from William Bengen, a financial planner in California, in a 1994 article in the Journal of Financial Planning. He looked at US market history back to 1926 and asked how much a retiree could withdraw without running out over a 30-year horizon. His conclusion, in his own words, was that he counselled his clients to withdraw "at no more than a four-percent rate during the early years of retirement."
Note what that is. It is one practitioner's counsel to his own clients, drawn from one country's market history. He never called it a rule. The industry did that afterward.
That last line matters more than any of the others. Every dollar of fee and every dollar of tax comes out of the same portfolio the withdrawal comes out of. Neither was in the model. If you are using 4% as a planning anchor, you are using a figure that assumed both were zero.
None of which makes it useless. It makes it a starting point for a conversation rather than an answer, which is roughly what its author said in the first place.
No regulator and no government agency endorses any particular withdrawal rate. If you see one presented as official, it isn't.
Nearly every retirement projection assumes you spend the same amount, adjusted for inflation, every year until you die. Almost nobody actually does that.
The research on real retiree spending, most notably by David Blanchett, found a consistent pattern often described as the retirement spending smile. Spending is highest in the early years, when people travel, renovate, and do the things they waited for. It drifts down through the middle years in real terms. It then rises again late, driven by health and care costs.
Two consequences follow, and they cut in opposite directions:
The practical version: your first decade of retirement and your last decade are different problems. A plan that treats them as one problem is solving neither well.
In our experience, it is rarely a market crash. It is one of these four risks.
The federal government's most recent projection, from a study prepared for the Department of Health and Human Services, is that about 56% of people turning 65 will develop a long-term care need serious enough to meet the statutory definition; needing help with at least two daily activities for 90 days or more, or severe cognitive impairment.
You may have seen 70% quoted instead. That figure uses a looser definition, comes from an older page, and is not sourced. The 56% is the better number. The duration data behind it is more useful than the headline anyway. Across everyone turning 65, the average need runs about 2.8 years; among those who actually need care, about 5 years. Roughly 22% will need care for five years or longer.
Medicare does not pay for this. That is not our characterization. Medicare's own website states plainly that Medicare doesn't pay for long-term care, and that neither does most health insurance including Medigap. The skilled nursing benefit people are thinking of is a separate, short, limited one that is not the same thing.
On what care costs: there is no federal price survey. Every cost figure you have seen, including the ones published on government websites, traces back to a private survey conducted by a subsidiary of an insurance company that sells long-term care policies. We think you should know that before you use those numbers to make a decision.
For 2026, the standard Medicare Part B premium is $202.90 a month, up 9.7% from 2025. The Part B deductible is $283, up 10.1%. General inflation over the same period ran about 3.4%.
That gap is the point. This is a cost you cannot opt out of, rising at roughly three times the rate of the index your other income is measured against.
Above $109,000 of income for an individual or $218,000 for a couple, Medicare adds a surcharge to your premiums. It is a cliff, not a slope. One dollar over the line triggers the whole surcharge for twelve months.
And it looks back two years. The income that sets your 2026 premium was your 2024 income. So a large IRA withdrawal, a Roth conversion, or the sale of a property quietly sets a bill that does not arrive until two years later, by which time nobody connects the two.
California does not tax Social Security. It taxes everything else: IRA and 401(k) withdrawals, pensions, and capital gains as ordinary income, with no preferential capital gains rate, at rates running up to 13.3%.
Which account you draw from, and in what order, changes how much of your portfolio actually reaches you. We wrote a separate page on how retirement income is taxed in California, including the part where municipal bond interest counts against you even though it is tax-free.
Given all of the above, here is where effort is repaid.
Notice that none of these is a prediction. They are all decisions.
Everything above is the machinery. The question you actually care about is what it means for your accounts, your spending and your two lifespans. That cannot be answered on a web page.
Our planning tool takes your accounts, income sources and spending and models how they interact over a full retirement, including the withdrawal order, the tax consequences, and what happens if the bad years arrive early rather than late.
It takes about five minutes, it’s free, and nothing is sold to you at the end of it.
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It depends on four things: how much you withdraw each year, the order in which your investment returns arrive, how long you and your spouse live, and what unplanned costs you meet along the way. Only the first is fully within your control.
Anyone offering a single number is showing you the output of a model rather than a fact. That number changes whenever any assumption behind it changes. The more useful exercise is to understand which of those four factors you can actually influence, and to build flexibility into the ones you cannot.
The 4% figure came from a 1994 article by financial planner William Bengen, based on US market history back to 1926 and built to a 30-year horizon. He described it as counsel to his own clients, not as a rule. He recommended a stock allocation as close to 75% as possible.
Two limits matter more than whether the number itself still holds. It applies 4% to your starting balance once and then indexes that dollar amount to inflation. It is not recalculated against your current balance each year. It assumed no investment fees and no income tax, both of which come out of the same portfolio. No regulator or government agency endorses any particular withdrawal rate.
Longer than life expectancy. A 65-year-old man can expect on average 18.4 more years and a 65-year-old woman 20.8 more years. Life expectancy is an average and slightly more than half of 65-year-olds outlive their own.
If you are married, the relevant lifespan is the longer of the two, not your own. Working from Social Security's life tables, for a couple both aged 65, there is roughly a 50/50 chance at least one of them reaches 90. A plan built around a single life expectancy is planning for the wrong event.
It is the risk that poor returns arrive early in retirement rather than late. While you are saving, the order of your returns is mathematically irrelevant. Any reshuffling of the same returns produces the same ending balance. Once you are withdrawing, order becomes decisive.
Every withdrawal permanently removes shares. Selling during a decline liquidates more shares to raise the same dollar amount. Those shares are not there to participate in the recovery. Two retirees with the same average return over the same period can end up in entirely different positions purely because of the order in which those returns arrived.
No web page can answer that. You should be wary of one that claims to. What can be said is what tends to cause it. In practice, it is rarely a market crash; it is more often a long-term care need, health costs rising faster than income, an unplanned tax or Medicare consequence, or a withdrawal rate that was never stress-tested against a bad first decade.
The factors most within your control are the withdrawal rate itself, whether your plan can flex downward in a bad year, what you hold during the decade around your retirement date, and which accounts you draw from first.
No. Medicare's own website states that Medicare doesn't pay for long-term care, and that most health insurance including Medicare Supplement policies doesn't either. The skilled nursing facility benefit people often have in mind is a separate and much shorter benefit.
A federal projection prepared for the Department of Health and Human Services estimates about 56% of people turning 65 will develop a long-term care need meeting the statutory definition. Among those who need care, the average duration is around five years. Roughly 22% need care for five years or more.
There is no single figure. California changes the arithmetic in both directions. The state does not tax Social Security benefits, but it taxes IRA and 401(k) withdrawals, pensions and capital gains as ordinary income with no preferential capital gains rate, at rates running up to 13.3%.
Against that, long-time homeowners protected by Proposition 13 often carry housing costs far below what a national calculator assumes. Both effects can move the target substantially, which is why a general rule of thumb tends to be wrong in one direction or the other for any specific household.