**Meta description:** Calculating how long your retirement savings will last helps you decide when to retire and whether you are contributing enough to your retirement accounts.

Saving for retirement is essential to ensure a comfortable, happy life after you stop working. Without adequate savings, you may need to stay at your job longer or work part-time during retirement. Determining how long your savings will last can help you decide if you are contributing enough to your 401(k) or other retirement accounts. Below is a guide to assess whether your retirement savings are sufficient.

A 2019 Schwab Retirement Plan Services survey found the average 401(k) participant believes they will need $1.7 million to retire. However, individual needs vary based on living expenses. A United Income report revealed only about one in six retirees has $1 million saved — still twice as many as in 1989.

Start by estimating your annual retirement expenses and multiplying that figure by the number of years you expect to spend in retirement. Those who retire later or reduce costs will need smaller nest eggs. If projected retirement income falls short, consider increasing your salary contributions or allocating more to your 401(k).

Many financial advisors use **the 4% rule** (or the 4% sustainable withdrawal rate). This guideline suggests withdrawing 4% of your savings annually, based on historical stock returns averaging 7% annually minus 3% inflation.

Keeping withdrawals below 4% typically allows a portfolio to last at least 30 years, supplemented by Social Security. For example, a $500,000 account provides $20,000 annually, while $1 million offers $40,000. To calculate your target savings, divide estimated annual expenses by 0.04.

If you need $50,000 annually, aim for $1.25 million ($50,000 ÷ 0.04). Adjust withdrawals for inflation: A 3% annual increase means withdrawing $51,500 in year two and $53,045 in year three.

Bill Bengen, a certified financial planner in Chula Vista, California, developed the 4% rule after studying balanced portfolios of cash, stocks and bonds. Due to market volatility, rising lifespans and low interest rates, some advisors now recommend a 3.5% or 3% withdrawal rate.

The **80% rule** suggests retirees need 80% of their pre-retirement income. While work-related costs like commuting and professional attire may drop, healthcare and travel expenses often rise. Spending typically peaks early in retirement, plateaus mid-retirement and increases again with medical needs later.

Downsizing or relocating to a lower-cost area can reduce expenses while maintaining quality of life. However, home renovations or frequent travel may require higher savings.

Combine expected Social Security benefits with retirement account withdrawals. If you have contributed to Social Security for over 10 years, use the [Social Security Administration’s online estimator](https://www.ssa.gov) to project benefits.

Claiming benefits early at age 62 reduces monthly payments, while waiting until 70 increases them. Most retirees start at 66, receiving an average of $1,503 monthly. Pension recipients should contact their plan administrator for benefit estimates.

Traditional 401(k) or IRA withdrawals can begin penalty-free at age 59½. Required minimum distributions must start by age 72.

Multiply your annual income needs by 25 to estimate total savings required. For example, $40,000 annually requires $1 million saved. This rule does not account for pensions, rental income or Social Security.

For conservative portfolios heavy in bonds, CDs or cash, use the **Multiply by 33 Rule**: $40,000 annually would require $1.32 million.

A Government Accountability Office report found 48% of Americans over 55 have no retirement savings. Many rely solely on Social Security, which averages $1,503 monthly — slightly above minimum wage. Rising debt further limits retirees’ ability to travel or pursue hobbies.

Businesses can help employees save through services like Human Interest, which offers 401(k)s, IRAs and 403(b) plans. Setup takes 15 minutes, with plans active in 30–45 days.