According to a report from the New York Times, American retirees with as much as a million dollars in the bank will probably outlive their nest eggs:
For people close to retirement, the problem is acute. The conventional financial advice is that the older you get, the more you should put into bonds, which are widely considered safer than stocks. But consider this bleak picture: A typical 65-year-old couple with $1 million in tax-free municipal bonds wants to retire. They plan to withdraw 4 percent of their savings a year—a common, rule-of-thumb drawdown. But under current conditions, if they spend that $40,000 a year, adjusted for inflation, there is a 72 percent probability that they will run through their bond portfolio before they die.
Lower interest rates these days may mean good things for the rebounding housing market, but Walter Russell Meade points out that it has seriously hurt responsible savers:
Even millionaires in the top eight to ten percent of American households now need to be more careful with their retirement plans. The only safe retirement advice remains: save more than you think you should, and plan to work longer…
That, or we can all just plan to retire abroad.