Retirement Plan - Employees

How Long Will Your Money Last?

By August 11, 2016 March 17th, 2020 No Comments

With all of the advanced education and strategy tools available, it is still often difficult for employees to understand the difference between what they can save for retirement and what is needed to retire. Sometimes, it is helpful to see what your account will actually provide over the course of your retirement. It can also help you set an achievable goal.

Savings Monthly Income for 10 years1 Monthly Income for 20 years1 Monthly Income for lifetime of individual and spouse2
$50,000 $493 $289 $174
$100,000 $986 $578 $349
$150,000 $1,479 $867 $523
$200,000 $1,972 $1,157 $698
$250,000 $2,465 $1,446 $872
$500,000 $4,930 $2,891 $1,745
$750,000 $7,395 $4,337 $2,617

Monthly income can be greatly influenced by the number of distribution years.  A shorter payout over 10 years will result in the highest monthly distribution amount, but the risk is if you live longer than 10 years in retirement, you may actually run out of money.  Perhaps the most important decision is to decide when you actually want the distributions to begin.  Deferring the beginning date of distributions from your account a few years can not only reduce the payout timeframe, but could allow an opportunity for additional asset growth depending on investment performance.

The monthly incomes are hypothetical and not intended to project the performance of any specific investment or insurance product.

1 – Payment increases 2% annually to help offset effects of inflation. Illustrative amounts based on 3.5% interest rate.  Lifetime payments assume retirement age of 65.

Based on 5.5% annual yield compounded monthly. Investment option performance can dramatically affect these numbers. Inflation can also seriously affect the value of the withdrawals. Rate of return is hypothetical and does not represent any specific investment option or imply guaranteed results. Amounts shown do not reflect the impact of taxes on earnings, your actual return will vary depending on your investment option and your tax bracket.

2 – Lifetime payments assume start at age 65 over two lives, Joint and Survivor at 100% survivor benefit and 3% COLA. Analytics provided by MassMutual.