Oct 3, 2025
Between high living costs and uncertainty in the stock market, Raymond, 72, is feeling anxious about retirement — despite having no debt, a fully paid-off home and $1.5 million in savings.
On top of his $110,000 salary, Raymond and his wife of the same age both collect Social Security benefits. He applied at age 70 to get the maximum possible amount, while she receives a spousal benefit based on his work record.
Advertisement
The couple has more than enough income to continue adding to their savings each month. Raymond, however, dreads the day he switches from growing his nest egg to drawing from it.
On paper, it seems Raymond and his wife are in excellent financial shape. So, what does he need to do to convince himself he has enough money to retire?
How to determine if you have enough to retire
The type of lifestyle you want to lead in retirement may determine whether or not you’re ready to dive into your golden years. But before Raymond and his wife dive into “what we want,” they need to determine “what we have” — and things are looking swell.
Together, they currently bring in around $55,000 in Social Security benefits each year. A good start. This amount will also increase in the future thanks to cost-of-living adjustments.
Next, they’ll want to see how much they can safely draw from their savings. A classic rule of thumb is the 4% rule. This stipulates withdrawing 4% of your savings in your first year of retirement, and then withdrawing the same amount, plus inflation, in following years. The idea is, with proper management, you could stretch your savings over 30 years. With $1.5 million in savings, you can make an initial withdrawal of $60,000.
If this is the couple’s only income in retirement, it has already exceeded Raymond’s employment salary.
Now, to help determine whether the income is enough, they can build a new budget based on projected spending in retirement. Some of their current expenses will likely go down — for example, Raymond may spend less on gas without a daily commute to work — while they might want to make room for perks like travel or more nights out on the town.
One thing that should be included in their budget, especially considering their age, are potential health care expenditures. According to Fidelity Investments, a 65-year-old retiring in 2025 can expect to spend an average of $172,500 in health care and medical expenses throughout retirement. (1)
Advertisement
If Raymond needs further assurances, he and his wife should visit a financial advisor, who can help them come up with a spending and withdrawal plan. And if worries persist about their savings and market volatility, an advisor can help the couple transfer funds to safer investment vehicles. This may limit how much they can confidently withdraw but it could put Raymond’s mind at ease. Either way, there’s a good chance the couple’s nest egg will last until their final days.
Must Read
- Dave Ramsey warns nearly 50% of Americans are making 1 big Social Security mistake — are you doing the same?
- Thanks to Jeff Bezos, you can now become a landlord for as little as $100 — and no, you don't have to deal with tenants or fix freezers. Here's how
- Robert Kiyosaki says this 1 asset will surge 400% in a year and begs investors not to miss this ‘explosion’
Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.
Acknowledging the emotional component
While hesitancy to retire can be associated with concerns about money, for many, work provides a sense of identity, meaning and purpose. Without the structure that comes with a job and the social aspect of mingling with coworkers, some retirees might feel as if they’re wandering aimlessly.
There are a number of ways to combat these negative feelings of losing your sense of self once you give up your job. One is to assign yourself a series of goals to follow.
“People have a pent-up demand for leisure activities coming into retirement, but relaxing is so much sweeter when you’re relaxing from something,” Christine Benz, director of personal finance and retirement planning at Morningstar, told AARP. (2) “You still want to feel like you’re accomplishing things, like you’ve earned that bit of fun.”
With this in mind, consider new ways to spend your time in retirement. This can include picking up new (or old) hobbies. Focusing on projects can help you enjoy your abundant leisure time. If you find a club of enthusiasts who share the same hobby or enjoy the same activity, that can satisfy any desire for social connection.
Another way to feel useful and stay engaged socially in retirement is to simply swap one job for another. You can offer your time or considerable experience to your favorite charity or organization in your community. If you opt for a paid part-time job, this may also help you to feel a little less anxious about the longevity of your savings.
Whether you devote time to honing a skill, take up a good cause or even spend more time with your family and loved ones, finding a new purpose in life can make your retirement even more fulfilling than you expected.
Article sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
Fidelity Investments (1); AARP (2)
You May Also Like
- Turning 50 with $0 saved for retirement? Most people don’t realize they’re actually just entering their prime earning decade. Here are 6 ways to catch up fast
- Inside a $1B real estate fund offering access to thousands of income-producing rental properties — with flexible minimums starting at $10
- Vanguard’s outlook on U.S. stocks is raising alarm bells for retirees. Here’s why and how to protect yourself
- Here are 5 easy ways to own multiple properties like Bezos and Beyoncé. You can start with $10 (and no, you don’t have to manage a single thing)
Rebecca Holland is dedicated to creating clear, accessible advice for readers navigating the complexities of money management, investing and financial planning. Her work has been featured in respected publications including the Financial Post, The Globe & Mail, and the Edmonton Journal.
