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Getting These 3 Numbers Wrong Could Wreck Your Retirement

By Maurie Backman - May 15, 2021 at 4:18AM

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In the course of planning for your senior years, there are some details you really can't afford to botch.

You're probably aware that it's important to plan for retirement rather than just wing it. After all, your senior years may be loaded with surprise expenses, like heftier healthcare bills than anticipated, and it's important to go in prepared.

But if you're off the mark on these key numbers, you could leave yourself vulnerable to a host of financial issues that make your senior years more stressful than they need to be.

1. Your full retirement age

Your full retirement age, or FRA, is when you're entitled to collect your full monthly Social Security benefit based on your personal wage history. But that age isn't universal. Rather, it depends on your year of birth.

Older man holds documents and sits next to older woman at laptop

Image source: Getty Images.

In a recent Fidelity survey, a whopping 83% of Americans could not identify their FRA, but if you don't know that number, you may end up claiming Social Security at the wrong time and shrinking your benefits on a permanent basis in the process. A better bet? Learn that number well ahead of retirement.

You can consult this table to see what your FRA looks like:

If You Were Born In:

Your Full Retirement Age Is:




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration.

2. Your retirement savings withdrawal rate

Ideally, you'll enter retirement with a nice amount of money in savings. But you can't just plan to take distributions at random. Rather, you'll need to figure out how much you can afford to withdraw from your nest egg on an annual basis so you don't deplete it prematurely.

Many financial experts have long sworn by the 4% rule, which dictates that you'll start off by withdrawing 4% of your retirement plan's value your first year of retirement and then adjust subsequent withdrawals for inflation. But the 4% rule isn't perfect, and if your savings are invested too conservatively, removing 4% each year may be too aggressive a target.

As such, you'll need to run some numbers to see what withdrawal rate works for you. But you definitely shouldn't just pick a number at random and hope for the best.

3. The length of your retirement

Many seniors wrap up their careers in their 60s and assume they'll need enough money to cover 15 to 20 years of retirement. But Americans are living longer these days, and if you enter your senior years in great health, you may enjoy a 30-year retirement or longer. That's great news -- provided you have the means to pay for it.

It's for this reason that it's important to not sell yourself short on the length of your retirement. If you underestimate how long you think you'll need your savings to last, you might withdraw too heavily from your nest egg so that you run out of money when you still have many more years to live.

Furthermore, the length of your retirement should play into your decision to claim Social Security. The reason? Once you lock in your monthly benefit, you're guaranteed that amount for life.

If you delay your filing past FRA, you'll get the opportunity to boost your benefits by 8% a year, up until age 70. And that's a move you may want to make if you think your retirement will be lengthy.

The more you educate yourself about retirement planning, the stronger a financial position you'll be in once your senior years roll around. Keep these important numbers in mind, as getting them right could be your ticket to enjoying retirement to the fullest.

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