Retirement can be a scary notion from a financial perspective. For the first time in your life, you'll be without a steady paycheck, which means you'll be reliant on your savings and Social Security benefits to cover your living costs in their entirety.

If you've been putting money away for retirement for quite some time, you may be wondering how long your savings will last, and what sort of annual withdrawal rate they'll support. But if you use our helpful calculator, you'll get a good sense of how well your savings will fare in the face of what could be a 30-year retirement.

Senior couple reviewing finances, looking worried

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Will you outlive your retirement savings?

Life expectancies today aren't what they used to be. The Social Security Administration says that the average man reaching age 65 today can expect to live until 84.3, while the average woman reaching age 65 can expect to live until 86.6. Additionally, one in four 65-year-olds today will live past 90, while one in 10 will live past 95.

Obviously, living a longer life is a good thing in theory. But from a retirement savings perspective, it can pose a real challenge. In fact, 60% of baby boomers admitted in a recent Allianz study that they're more fearful of outliving their savings than actually dying. This sentiment is echoed by 43% of workers surveyed by Transamerica, who say that outliving their savings is their greatest retirement-related fear. But since secretly hoping for your own premature death is a rather ridiculous (and, frankly, depressing) solution to this problem, a better approach is to crunch some numbers and see whether your savings will hold up for 30 years. (Granted, you might live even longer, but 30 years is a reasonable assumption.)

With that in mind, here's a calculator that can help you determine how long your savings are likely to last:


* Calculator is for estimation purposes only, and is not financial planning or advice. As with any tool, it is only as accurate as the assumptions it makes and the data it has, and should not be relied on as a substitute for a financial advisor or a tax professional.

As you can see, this tool lets you input your estimated monthly income from Social Security, a pension (if you have one), and your savings to see whether you'll be able to cover your monthly living costs for up to a 30-year period.

Now to use this tool, you'll need to estimate what sort of yearly return your savings are likely to generate. If your money is going to be mostly locked up in a savings account or CDs in retirement, you may not see much more than 1%, especially based on today's rates. A bond-heavy portfolio, on the other hand, might give you a 3% or 4% average annual return. But if you're willing to stay invested in stocks, you might score an average yearly 6% return -- even if your portfolio is pretty evenly split between stocks and bonds.

Are stocks a safe investment for retirees? Traditionally, you may have been told no. But the general rule of thumb with stocks is that you're OK to hold them if the money you're investing with won't be needed for at least 10 years. If you're in good health and are anticipating a long retirement, it pays to keep part of your portfolio in stocks, since there's a good chance you won't need to tap that portion of your nest egg for quite some time.

Retirement savings and the 4% rule

While our calculator estimates your savings' staying power based on your anticipated returns and the amount of income you expect to need each month, another way to see whether your savings will last throughout retirement is to apply the 4% rule. The 4% rule states that if you begin by withdrawing 4% of your savings balance in your first year of retirement, and then adjust subsequent withdrawals to account for inflation, your savings should last 30 years. Though the rule isn't perfect, it can serve as a reasonable starting point for evaluating the health of your nest egg.

Let's say you expect to need $5,000 a month in retirement income, and that Social Security will provide $1,600 in benefits. This means you'll need to withdraw $3,400 a month from savings, or $40,800 per year. If you multiply $40,800 by 25, you'll get $1.02 million, which is the savings target you should aim for.

If you're on the brink of retirement, or are newly retired but don't have that much in savings, you'll need to make some adjustments to avoid running out of money down the line. This could mean adopting a more frugal retirement lifestyle so you don't need as much monthly income, or working part-time as a senior to supplement your income. At the end of the day, you probably have more options than you think for making your retirement savings last. The key is to be both realistic and flexible as you navigate this new stage of life.