How to Make Your Money Last to Age 100

Suppose you have a tax-deferred account such as a traditional 401(k) at work, in which you don’t pay taxes until you start taking money out. You might then open a Roth IRA, in which you pay taxes up front but can take withdrawals tax-free in retirement, or a taxable brokerage account, earnings from which are taxed at the lower capital gains rate (provided you’ve held the investments for at least a year).

The benefit of this approach is you can factor in the tax consequences when determining which account to draw from at different times during your retirement. For example, if you are going to need more income in a given year (say, to travel or support a loved one), you could draw from the Roth account since that money won’t be taxed. Or, if you’re not bringing in much income from work or other sources, you could tap one of the taxable accounts without doing too much damage to your overall tax bill.

“Having the flexibility to draw from accounts with various tax treatments is going to give you the best chance for reducing your lifetime tax bill,” Urban says. “You’re not going to be overly exposed to whatever the government decides to do with tax rates at any point in time.”

Build income streams

The key to supporting yourself through a long retirement is ensuring you have money coming in steadily. For many retirees, Social Security is their only guaranteed source of monthly income. (If you’re lucky enough to have a pension, that’s another.)

That’s why it’s important to not just build a substantial nest egg but to have a prudent, durable withdrawal strategy. According to a 2023 Morningstar report, retirees who follow the 4 percent rule — withdrawing up to 4 percent of their savings in the first year of retirement and adjusting amounts annually for inflation thereafter — had a 90 percent chance of still having money in their accounts after 30 years.

Another option could be purchasing an income annuity, a contract with an insurance company in which you invest a significant sum in exchange for guaranteed monthly payments for life. With this kind of annuity, there’s no risk of running out of income. “An annuity can effectively produce the same types of results for an individual that a pension plan would,” Pinsky says.

Other potential income streams include earnings from part-time work, or renting a property to tenants or vacationers.

Be strategic with Social Security

Though you’re eligible to start taking Social Security retirement benefits when you turn 62, you’ll get a larger payment if you can afford to wait. Your monthly benefit grows by 5 percent to 8 percent annually for each year you wait until age 70, when you can claim your maximum benefit.

“If you’re 62 and you have no other option to pay for living expenses other than take [Social Security], then sure, you’d have to do that,” Urban says. But if you can hold off by working or tapping some other income, you’ll have a higher Social Security check for the rest of your hopefully very long life.

Consider semiretiring

Wanting to live longer doesn’t necessarily translate to planning to work longer, the Corebridge study found, especially among younger adults. Forty-two percent of millennial respondents and 55 percent of Gen Zers said they don’t expect to need to work past age 65.

For many, though, living longer could upend those plans. Nineteen percent of Americans 65 and older were working in 2023 — nearly twice the percentage as 35 years ago. Not all do so just for the money, but doing at least some paying work into your retirement years will help stretch your savings.

That doesn’t have to mean continuing to toil away in a 9-to-5. More than a quarter of adults ages 50-plus are earning money via gig work and freelancing opportunities, a January 2023 AARP study found, which can provide flexibility, remote working options and opportunities to maintain social connections.

Protect your wealth from health care costs

Households led by someone 65 or older spent, on average, $7,540 per year on health care in 2022. The longer you live, the more those costs will add up, especially if, like most older adults, you eventually need long-term care services, which Medicare does not cover.

Median annual costs for long-term care range from around $34,000 for a 20-hour-a-week home health aide to $64,000 for a spot at an assisted living facility to nearly $117,000 for a private room at a nursing home, according to insurance company Genworth’s annual Cost of Care Survey. That can quickly eat up the nest egg you and your spouse have spent decades building.

Long-term care insurance or a hybrid life insurance policy with long-term care coverage are two options that could help you pay for such services without sacrificing your savings, says Jordan Mangaliman, CEO of Goldline Financial Services in Fullerton, California. 

“When we’re thinking about health care, let’s say, God forbid, you have a heart surgery — for the most part, you’re not truly trying to pay that out [of] pocket. You have insurance for that,” he says. “Same thing goes for a long-term care. Once you get to that bridge, you don’t want to have to use your own assets to pay for it. Same concept, and people overlook it.”

Stay flexible

However you prepare for a lengthy second act, it’s important to remember that “your retirement date is not a static date,” Pinsky says. Your strategy shouldn’t be rigid, either.

“You can always adjust your plan,” he says. “Even in your late 50s or 60s, course corrections can help significantly. I’m such a big believer that living a long life and having a happy retirement should be a positive thing, not negative. The best way to do that is to take action.”