Have you saved enough to retire?

One reason retirement funding may mystify you: How do you know when you saved enough so you won’t run out of money during your golden years? The answer begins with an understanding of your day-to-day expenses, and how those expenses may change in 30 or more years of retirement.

Saving enough fro retirement takes careful planning, financial experts say.

According to a recent survey from the Employee Benefits Research Institute, 84% of future retirees believe that savings will cover their post-career years – yet fewer than one in three respondents actually calculated how much they will need. Only around 20% had more than $100,000 set aside. More than 10% had nothing at all saved for retirement.

A conventional savings rule says you withdraw no more than 3% to 5% each year from your retirement savings to make your money last, aka a sustainable rate of withdrawal. Opinions vary about appropriate sustainable rates; the 4% rule comes under considerable scrutiny lately. Working with the above range will get you close.

This equates to $1 million in retirement funds for you to withdraw $30,000 to $50,000 each year.

Don’t despair: There are ways to increase your sustainable rate of withdrawal while still maintaining a relatively high degree of certainty that your money will last.

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The first and possibly most critical factor is to plan and then to monitor your plan closely, either on your own or with a financial pro. Your plan needs to include projections or modeling to show what your future income might be based on your sources of income, such as retirement savings, pensions, Social Security benefits and the like.

Developing a plan can give you more confidence in your ability to make savings last. Similarly, planning can also reveal if you saved too little and allow you time to adjust your efforts. Review and update your plan once a year or so.

Second, adjusting your portfolio holdings can also boost your level of sustainable withdrawal. More risk in your holdings is actually good for your long-term holdings; a significant position in the stock market helps you achieve a higher level of returns – and, in your retirement, withdrawals – over time. Without some exposure to risk, your funds will fall behind the inflation of day-to-day expenses, not to mention such hyper-inflation items as health care.

The third important factor regarding your savings’ sustainability: the pattern of income that you’ll need in retirement. Over three or more decades, your income needs will likely change. During your first several years, for instance, you’ll likely spend more than average as you travel or take on new hobbies. On the other hand, you may continue to save during this time of your life, perhaps with income from a part-time job.

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Later in retirement, many folks lower expenses as they become more sedentary, not traveling as much and having fewer extraneous expenses. Declining health and energy in still-later years often increase health-care costs.

Best to maintain a realistic view of your own life span, erring on the long-term side. It’s not unreasonable to project a retirement plan to your late 90s. With planning, that can be completely good news.

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Jim Blankenship, CFP, is a fee-only financial planner at Blakenship Financial Planningin New Berlin, Ill., And a member of the AdviceIQ Financial Advisors Network, which is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.