3 Reasons You Might Deplete Your Retirement Savings Too Early
Running out of money during retirement is a major concern. You can do your best to save a bundle in a 401(k) or IRA, only to misjudge your future expenses and wind up cash-strapped down the line. Here are a few reasons why you may be at risk of depleting your nest egg prematurely -- and what to do about them.
It's easy to look at a retirement account with a $300,000 balance and think "Wow, that's a lot of money." But actually, in the grand scheme of retirement, it's not.
You'll generally want to withdraw from your savings at a rate of anywhere from 2% to 5% per year (there are, of course, exceptions to this range, but this is a generally acceptable starting point for the typical retiree), which means that if you have $300,000 in your nest egg, you get $6,000 to $15,000 a year to spend. Even the higher end of that range isn't very much, and while you'll probably collect Social Security as well, based on what the average recipient gets today, that only brings your annual income up to $24,000 to $33,000.
Source Fool.com
