Many Americans ask the question, "Will your 401(k) investment be enough to last you through your 澳洲幸运5官方开奖结果体彩网:retirement?" To answer that question, you'll first need to estimate the length of your retirement, know all your retirement savings resources, and determine a smart d𒉰rawdown plan.

Here’s what you need to know.

Review Your 401(k) Balance

Begin by checking your 401(k) balance and adding in any other retirement savings, such as Social Security, IRAs, pensions, and other income sources. Inputting your current savings balance into 澳洲幸运5官方开奖结果体彩网:online calculators will help you see where you stand with your 澳洲幸运5官方开奖结果体彩网:retirement savings.

As for what that balance should be, Fidelity suggests having retirement savings of at least three times your salary by age 40, six times your salary by age 50, eight times your salary by age 60, and 10 times your salary by age 67. To achieve those 澳洲幸运5官方开奖结果体彩网:high savings amounts, Fidelity recommends setting aside at least 15% of your pretax salary each year.

Having 澳洲幸运5官方开奖结果体彩网:enough in your 401(k) for 澳洲幸运5官方开奖结果体彩网:retirement is not just about the balance that you’ve worked so hard to build up. There are other factor🏅s to consider.

“Calculating how long a 401(k), or any investment account for that matter, will last in retirement is dependent on many factors—current balance, current monthly spending, current inflation rates and assumptions for future rates, current market conditions and assumptions for future returns, etc.,” says , a certified financial planner at Apella Wealth.

Calculate 401(k) Withdrawals

An important factor in 澳洲幸运5官方开奖结果体彩网:how long your 401(k) will last in retirement is how much you 澳洲幸运5官方开奖结果体彩网:withdraw out of it each month. Spend a lot and you may go through your savings f♛ast.

“How much money do you need on a monthly basis from your 401(k) to supplement your lifestyle?” Price says. “Then remember, you’ll likely need to increase that distribution amount to account for taxes, as all traditional 401(k) distributions are taxed as 澳洲幸运5官方开奖结果体彩网:ordinary income.”

How much should you take out of a 401(k) for retirement spending? A 4% withdrawal of your balance⛎ each year is a good guideline.

“A generic rule of thumb is the 澳洲幸运5官方开奖结果体彩网:4% withdrawal rule. The theory states that you can reasonably withdraw 4% from your investment 澳洲幸运5官方开奖结果体彩网:portfolio every year without running out of money,” Price says. “So, if you have a 401(k) balance of $250,000, you can distribute up to $10,000 per year and then recalculate 4% based on next year’s balance and so on. Keeping in mind, whatever you distribute will increase your 澳洲幸运5官方开奖结果体彩网:taxable income and 澳洲幸运5官方开奖结果体彩网:liability come April 15.”

Only withdraw what you need to meet your 澳洲幸运5官方开奖结果体彩网:living expenses in retirement. Occasional larger withdrawals may ꧒occur as well.

“The reality is that most people don’t spend in a straight line,” says , a certified financial planner at Approach Financial. “It’s more likely that you’ll have occasional expenses throughout the years that come in chunks. You might buy new vehicles periodically, fix a roof, or have a medical issue, for example. Plus, you might start retirement by withdrawing at a high rate, but your withdrawals shrink once 澳洲幸运5官方开奖结果体彩网:Social Security kicks in.”

Be aware of the markets and how your 401(k) investments are performing. If your investments are dow♐n, you may want to tighten your 401(k) withdrawals.

“You can also use a guardrails approach, where you adjust your income based on how your portfolio is doing. If things are going well, you get a raise. You might as well enj🦩oy that money, and you can’t take it with you when you go. But when markets fall, you figure out a reduction, which you’ll hopefully reverse in future years,” Pritchard says.

Be Smart About Asset Allocation

To make your 澳洲幸运5官方开奖结果体彩网:investments last, you’ll want to have a good balance of safer assets in your 401(k). Bonds are a good strategy when ♔you are in or near retirement.

“It is important to keep five years of basic expenses kept in safer assets like bonds and cash to help (during) volatile periods in the market,” says , a certified financial planner at VLP Financial Advisors. “This avoids having to sell stocks while they may be down and avoids depleting the portfolio. The remainder stays 澳洲幸运5官方开奖结果体彩网:diversified across various sectors to support potential 澳洲幸运5官方开奖结果体彩网:long-term growth.”

The Bottom Line

How much you have saved and how much you withdraw each month are important factors as to how long your 401(k) investments will last in retirement. Saving eight times your salary by age 60 and 10 times your salary by age 67 are good saving guidelines. Withdrawing 4% of your 401(k) balance each year is🎀 a good gui🌟deline for spending.

You will also want to be smart about your 澳洲幸运5官方开奖结果体彩网:asset allocation in your 401(k) during retirement. Investing in bonds is a good way to guard against stock market 澳洲幸运5官方开奖结果体彩网:volatility, which could shri✨nk the portion of your 401(k) that you have in stock funds.