Will your savings last through retirement? Here’s how to improve your odds

For nearly half of American retirees, one question casts a long shadow: “Will I outlive my money?” According to Merrill Lynch research, 45% of Americans fear their retirement savings won’t last a lifetime. But with proactive planning and smart adjustments, retirees can gain control over their financial future.

“Retirement planning isn’t about predicting the future perfectly—it’s about being prepared to adapt,” says Eric Breemen, a financial advisor with Merrill.

Here are three key steps that can help make your savings stretch further and smarter.

Step 1: Develop a sustainable spending strategy

The conventional wisdom of withdrawing 4% annually from your retirement savings is a helpful guideline, but not a one-size-fits-all rule. Many retirees may need to adjust that rate depending on:

• Their retirement age
• Health status and life expectancy
• Other income sources like Social Security or pensions

Annual withdrawals

For instance, someone with $1 million in savings using a 4% withdrawal rate would have $40,000 to spend in their first year of retirement. However, if you expect to live well into your 90s or have a family history of longevity, a more conservative rate of 3% to 3.5% may be wise. Women, who statistically live longer than men, might especially benefit from a lower drawdown rate.

If your budget looks tight, consider delaying Social Security benefits until age 70 or working longer to increase your future income.

Step 2: Let your investments do the work

Many retirees play it safe by leaning heavily into low-risk assets like bonds and CDs. But being too conservative can backfire. Over a 30-year retirement, cash-heavy portfolios may not keep up with inflation, especially with rising healthcare costs.

Build a smarter strategy:

• Maintain a diversified portfolio that includes stocks and bonds for growth.
• Create a “liquidity bucket”—a reserve of 2–3 years’ worth of expenses in safe, liquid accounts—to provide peace of mind during market downturns.
• Hedge against inflation with assets like Treasury Inflation-Protected Securities (TIPS), real estate, or commodities like gold.

For example, without inflation protection, $1 million in cash could lose nearly 40% of its value over 25 years. Strategic investment choices are essential to preserving—and growing—your nest egg.

Step 3: Prepare for healthcare and long-term care costs 

Healthcare is one of the biggest wild cards in retirement spending. About 70% of Americans over 65 will need some form of long-term care, and a semi-private nursing home room now averages over $111,000 per year.

If you don’t have long-term care insurance, it’s essential to set aside a portion of your savings specifically for future medical expenses. Options include:

• Health Savings Accounts (HSAs) for tax-free medical spending
• Dedicated investment accounts for healthcare planning
• Hybrid insurance policies that combine life and long-term care benefits

Understand what Medicare covers—and what it doesn’t—so you can fill any gaps without depleting your core retirement funds.

Most importantly, don’t let emotions derail your financial strategy. Markets may fluctuate, and personal priorities can shift, but having a flexible, well-structured plan will help you stay on track.

“Regular check-ins with your advisor can help you adjust for changes in life or the market,” says Anil Suri, managing director at Merrill. “These timeless principles of spending wisely, investing strategically, and planning for the unexpected are the backbone of lasting financial health.”

By staying informed and making deliberate choices, you can enjoy your retirement years with greater confidence and peace of mind.