5 Steps To Take, In The 15 Years Before Retirement, To Make Sure You Don’t Run Out Of Money

5 Steps To Take, In The 15 Years Before Retirement, To Make Sure You Don’t Run Out Of Money

The closer we get to it, the more interested we tend to be in how to pull it off. But retirement, and planning for it, isn’t something that can happen at the last minute unless a big lottery win is involved. For most of us, getting ready for an uneventful retirement that doesn’t leave us pinching pennies and cutting coupons just to get by calls for some planning.

A popular rule has often be what’s call the seventy percent rule; that anyone planning for retirement should arrange their finances to produce seventy percent of what they earned prior to retirement from their savings or other investments. It’s been a common maxim used by financial advisers for decades, but it might not be relevant to future retirees.

There are multiple reasons why the rule might need updating. For one, the elderly of today and tomorrow are more likely to live longer than in the past. The average person in their mid sixties today can reasonably expect to live twice as long as someone of that same age did in the 1970s. With longer life comes an increased chance of needing to pay for medical care; either for yourself or a loved one. Retirees today are also more likely to still have debt when they stop working, and both general inflation as well as health care costs continue to rise more than they did in times past.

The old seventy percent rule might need to be moved up to a hundred percent, with these factors in mind.

Key Points:

  • 1People are living longer in retirement than ever before.
  • 2Income replacement used to be 70% of current income, 100% may be more realistic.
  • 3The 15 years prior to retirement are critical. Make sure you have a good plan in place.


For many retirees, the 70% income replacement rule might be an acceptable baseline for planning; however, with the risk of inflation compounded by the longevity risk now confronting retirees, it’s not inconceivable that, for some retirees, their income replacement need could be as high as 100%.
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