I recently reconnected with Dave, a former colleague who lost his job as the economy was reopening from the pandemic.

   He’s actually a few years younger than I am, but doesn’t think he can get another job that he’d enjoy in his field, nor does he want a job that forces him to commute and return to an office setting full-time.

Dave has been successful financially and thinks he can retire now, though he would pursue some of his passions or find new and different work as side gigs to stay active and engaged.

His primary concern at this point is outliving his savings, particularly if his “retirement” starts now, five or 10 years before he always expected to hang it up at work.

“The math works for me,” Dave said. “But I’m afraid that if I don’t go back to a full-time job or if I retire or mostly retire now, the market could crash or something could happen that makes me a burden to my family.”

Dave is far from alone these days, as changes to the economy and the workplace — but also to our attitudes about work and retirement — have made it necessary to rethink and reconsider the ways we expect our futures to play out.


In Dave’s case, he wanted to know what he could do that could help him avoid outliving his savings.

Given how many studies show that Americans are under-saved for the future, it’s worth looking at even for those people who aren’t contemplating big life chances now.

The list of options and the road map to follow in these cases is limited; there are only so many paths available in the best of circumstances.

Still, here are the options I suggest be part of the thought process for anyone trying to ensure their savings lasts and supports them to the end.

Start by reconsidering work/retirement. You don’t need to be full-time, hustling to generate every possible dollar or work in your chosen field, but part-time or extra income has big-time benefits.

Specifically, working in retirement has the same impact as if someone had saved a lot more money during their working life.


Here’s why: The standard retirement savings advice on how to make a portfolio last a lifetime is to live off roughly 4 percent of your retirement savings. The industry has plenty of arguments with the 4 percent rule — I do too — but for the purposes of this discussion, let’s go with it and then assume you’ll live comfortably off $40,000 annually (excluding Social Security and any pensions you might receive).

 By the 4 percent rule, you’d need $1 million in savings to generate that $40,000 annually.

Now consider a part-time job where you earn $1,000 per month. To generate that extra $12,000 per year from savings, your nest egg would have needed to be $300,000 larger.

That’s how and why any dollars you make doing some work go a long way toward extending the life span of your nest egg.

For someone who doesn’t want to (or can’t) work more, the counterbalance is to reduce spending. Cut 10 percent from spending and your retirement savings would be sufficient if it were 10 percent smaller (if you could live on $36,000 instead of $40,000, you can make it with $900,000 in savings); in this way, reduced spending increases your earnings power.

But making your money last is about more than just earning and spending.


When it comes to managing retirement savings, retiring early doesn’t mean you want to invest like the classic retiree, becoming super conservative and favoring bonds and cash over stocks.

There has been plenty of analysis to show that it’s hard to fund a 30- or 40-year retirement — assuming your withdrawal rate is 4 percent (or even 4.5 percent) — if you have less than one-third of your assets in stocks.

The longer your expected retirement, the higher the percentage you need to keep invested in the market; getting conservative early hoping to protect a portfolio often winds up with the savings eroding over time against the forces of inflation, taxes and more.

Another way to boost retirement income is to delay Social Security as long as possible.

   There’s no denying the math here; live into your late 70s or beyond and you come out ahead financially by locking in a larger stream of inflation-adjusted income.

 So long as you can cover the early years of retirement from savings — aided, of course, by any extra income and any spending cuts — delaying benefits typically gives the best chance for your savings and benefits to last a lifetime.


 If you want to supplement that income and make your nest egg go farther without loading up on stocks beyond your comfort level, consider income annuities.

 I’m not an enormous annuity fan — too often, consumers are sold a bill of goods that benefits the insurance company/sponsor more than the buyer — but immediate fixed annuities that pay lifetime income can be a useful tool. It’s something I will be looking into for my own future when I hit my 60s.

Securing a steady income with a portion of your assets makes it emotionally easier to invest remaining chunks in stocks, thereby increasing the long-term chances for success.

Finally, retirees and pre-retirees need to factor the value of their homes into their portfolios, rather than simply thinking of them as a roof over your head.

Typically, there’s a point when downsizing feels right from a lifestyle standpoint, but it may make financial sense even earlier, turning home equity into a means to save/pay for retirement. By lowering living costs and increasing your assets available to invest, downsizing enhances your ability to live out your days comfortably.

Remortgaging a home — especially when it has been paid off — or taking on a reverse mortgage are less-attractive options than making the most of your current home equity without borrowing against it, but your home’s value represents a significant asset that should not be overlooked in supporting your finances for the rest of your life.