A 67-Year-Old Single Retiree With $920,000 Can Stretch It to Age 95 If the COLA Holds Above 2 Percent

A retiree with $920,000 in savings and $2,800 monthly Social Security faces $58,000 in annual spending, leaving a gap of about $24,400 per year. That gap implies a withdrawal rate near 3%, which appears highly sustainable by common retirement-planning standards. The main uncertainty is how Social Security benefits rise over decades through cost-of-living adjustments, since small inflation and COLA differences can compound and erode purchasing power. Planning uses a 95-year horizon based on life table probabilities. The portfolio must generate the gap using different yield assumptions, with conservative approaches relying on Treasury notes, bond ladders, and dividend growth equity funds to produce sufficient income without requiring large drawdowns.

"The biggest wildcard is how much Social Security benefits increase through future cost-of-living adjustments over the next 28 years. Even small differences in inflation and COLA growth can compound dramatically over decades, determining whether the retiree maintains purchasing power or gradually falls behind rising costs. What looks stable today can become far more delicate once inflation enters the equation like a raccoon with a calculator and no respect for spreadsheets."

"SSA Period Life Table data implies a healthy 67-year-old woman has roughly a 50% chance of reaching 88, 25% of reaching 93, and 10% of reaching 96. Planning to 95 is the responsible tail. Stretching $920,000 across 28 years requires the portfolio to do real work without taking on equity-like risk in years it cannot afford a drawdown."

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