Making sure your retirement money lasts a lifetime is a key concern for most people…and a stressful one at that. In addition, retirement income planning requires many assumptions over many years.
Take a look at this article for some tips on how to deal with the variables.
My engineering training tells me to do a little bit of everything—assume a higher cost of living, low investment returns and a long retirement. After all, you don’t know what or where the anomalies will show up. Can you overdo this? Sure, you could provide so much margin for safety that you live too frugally and deny yourself some well-deserved retirement fun. Still, I wouldn’t cut it too close.
Source: Margin of Safety – HumbleDollar