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Retirement is a massive milestone to celebrate.
But we're sure you've seen plenty of articles describing health care costs, housing, and daily life when you retire.
It's almost like you spend so much time accumulating wealth that when it's time to spend it, you're not sure if you have enough.
But that's okay because if you're reading this, you're off to a great start.
As you continue to save diligently, let's break down some of the top retirement costs. This way, you'll be ready to set more specific goals – and you can definitely achieve them.
Originally published: October 2, 2024
This is one of the most famous and expensive costs associated with your golden years. Here are a couple of quick facts:
To get ahead of these costs, you should do your best to:
Combining these proactive strategies will make a strong impact and help you prepare for retirement.
Housing is a cornerstone of financial confidence in retirement. Although almost 80% of retirees own their homes outright, housing costs can still take a big bite out of your cash if you're not paying attention.
Due to property taxes, utilities, and repairs, your housing costs might be more than you anticipate. This is especially true for 20% of retirees renting or not owning their home.
You must budget carefully if you don't plan to own your home in retirement. Consider:
Your daily living expenses should be fairly predictable by the time you retire. You'll have a good handle on grocery costs, utility bills, and other regular expenses. The key is to make the most of every dollar:
As you develop your retirement plan, define success for yourself. Be realistic—a $3 million portfolio requires different planning than a $5 million goal. Set strong, achievable goals that may not be easy but can be reached with diligence and hard work.
Here's a practical exercise:
Want to know how long it takes your money to double? Use the Rule of 72. Divide 72 by your target rate of return on your investment. For example:
This simple calculation can help you plan your investments and understand the power of higher returns over time. It illustrates why investing for growth can significantly impact your retirement savings, potentially allowing you to reach your goals faster or with less out-of-pocket saving.
Remember, the choices you make today about spending, saving, and investing can dramatically affect your financial comfort in retirement. Stay focused on your goals, make informed decisions, and let the power of compound growth work in your favor.
Savvly’s Longevity Benefit is designed to help investors build potential income at later life milestones. It is not insurance, not a guaranteed product, and not FDIC insured. Learn more at savvly.com/disclosures.
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.
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