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Retirement is meant to be the reward after years of hard work—the time when you can finally pursue your passions and enjoy life on your own terms. But is reality going to live up to your dreams?
Many Americans find their retirement expectations don't match the reality. In fact, the 2024 Retirement Confidence Survey showed that only 68% of workers feel financially prepared to retire comfortably.
So, how can you cover all your bases? How can you know if you're truly retirement-ready?
Originally published: February 6, 2025
Being retirement-ready means having the savings, income streams, and plans in place to maintain your desired lifestyle. This goes beyond having a certain amount in your retirement accounts.
Retirement readiness reflects your overall financial health and preparedness to thrive in your post-work years without money worries. Evaluating it means looking at the full picture of your finances, not just your account balances.
As you approach retirement age, consistently evaluating your preparedness matters. Here are three assessments every pre-retiree should work through:
The 4% rule provides a guideline for how much you can safely withdraw from your retirement savings each year. Here's how it works:
For example, a $1 million portfolio allows up to a $40,000 first-year withdrawal.
The 4% rule aims to generate ongoing income from your savings while preserving the balance. But several factors impact its effectiveness, like market performance and your personal situation.
Debt obligations impact how much you need to save and withdraw. To understand your situation, create a detailed debt inventory:
Financial experts recommend keeping this ratio below 36%. If it's higher, focus on paying down high-interest debts first.
Having an overview of your debt and associated costs will help you budget for retirement. Debt takes a bite out of your available income, so minimizing it frees up more cash flow.
Creating an income inventory helps you map out your income streams in retirement:
Having multiple income sources helps reduce over-reliance on any given one, providing a safety net if one falls through. A significant share of retirees depend primarily on Social Security. Make sure you have backup sources of funds.
Retirement readiness extends beyond the accounts you've built. For the years traditional savings may not reach — the 80s, 90s, and beyond — there are new tools worth knowing about.
Savvly's Longevity Benefit is designed to help investors build potential income for the later years of retirement. It adds a longevity-based reallocation layer to market-linked performance, creating the opportunity for additional payouts at ages 80, 85, 90, and 95 for investors who reach those milestones. Savvly is not insurance, not a guaranteed product, and not FDIC insured. For full details on fees, assumptions, risks, eligibility, and disclosures, visit savvly.com/disclosures.
Learn more at savvly.com/contact-us.
This article is for informational purposes only and does not constitute financial, tax, or investment advice. Consult a qualified financial professional before making retirement planning decisions.
Disclosures
The information on this page is provided for educational purposes only and is not intended as investment, legal, or tax advice. It is designed solely to illustrate how longevity-linked investment benefits may work under certain assumptions. Actual results will vary. All illustrations, examples, and case studies are hypothetical and are intended to demonstrate potential scenarios — not to predict or guarantee actual outcomes. They do not represent the performance of any individual investor, portfolio, or account.
Key Assumptions Used in the Illustrations
Life expectancy and mortality projections are based on the most recent Social Security Administration (SSA) tables available at the time of simulation.
In the event of death or early withdrawal, hypothetical scenarios assume that investors who exit early, or their estate in the event of death, may receive 75% of the lesser of the initial investment or current market value, plus 1% for each full year the account was active. Case studies assume standardized market growth of 8% annually and do not incorporate unexpected market volatility, inflation, changes in interest rates, or changes in an investor's personal circumstances.
Simulations may assume a 3% annual early withdrawal rate prior to payout or death. All figures shown are net of fees. No forecast, projection, or hypothetical return should be relied upon as a promise or representation of future performance.
Past performance is not indicative of future results. The 8% annual market growth rate used in illustrations is a standardized assumption for modeling purposes only and does not represent the historical or expected performance of any specific investment. Note that early or voluntary withdrawals by other participants can affect fund performance and the size of distributions, and that a higher-than-expected number of participants reaching payout milestones may reduce the per-participant benefit received.
Savvly's Longevity Benefit is not a bank product, not FDIC insured, not insured by any federal government agency, not a guaranteed or insured investment, and not insurance. Investment values may decline.
Savvly's Longevity Benefit may not be suitable for all investors. Eligibility to invest is subject to qualification requirements and not all investors will be eligible. Investors should carefully consider their investment objectives, risk tolerance, time horizon, and financial situation before investing. See savvly.com/disclosures for current eligibility criteria, fees, risks, withdrawal terms, and fund assumptions.
This content is published by Savvly, Inc. Savvly has a financial interest in the products described and this content should not be interpreted as independent financial research or analysis. Investors should carefully evaluate their own circumstances and consult a qualified financial professional before making any investment decision.
