Don’t run out of money too soon
Updated 28 July 2021
With retirement lasting 30 years1 or more, it's so important that you don't run out of money.
If you're eligible for a State Pension, it will continue to be paid for your lifetime. You may also have personal or employer pensions that will provide an income throughout your retirement. If it's private savings you're relying on - there's a chance they could run out if you withdraw too much too soon.
What’s a safe withdrawal rate?
It depends on your individual circumstances, the choices you make and factors that are out of your control, including:
- Preserving your savings. Whether or not you want to preserve some or most of your savings, to pass on after you die, has a big influence on how much you may choose to withdraw.
- How long you live for. The longer you live the greater the risk that your money could run out. We don't know how long we're going to live, but you can get a general idea by using this calculator.
- The investment environment. If markets perform well, particularly in the early years of your retirement, this can help your savings. If they perform poorly, this can have a negative impact. Remember the value of an investment can fall as well as rise, and you could get back less than you originally invested.
- Asset allocation. Where you decide to invest (cash, equities or bonds), can also have an impact on how long your money might last. For example, a higher investment in equities when markets are falling can be very damaging, as it can be to have all your money in cash and not earning enough interest for the long-term.
So what’s the answer?
There are so many variables that make it impossible to guarantee that you won't run out of money.
The best thing you can do is get a tailored retirement plan that's right for you, by speaking to a financial adviser. There may be a charge for this service.