A 70-year-old blew through one-third of his $3 million nest egg in 3 years — financial advisors say he needs to act now - Canada News Beep

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The typical retirement account balance among Americans 65 and over is surprisingly low, with an average balance of just $330,186 and a median of $103,202, according to Vanguard (1).

Some retirees, however, have far more.

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While the amount you have invested matters, it’s not the only number to pay attention to. You must also consider your annual withdrawal rate, or the amount of money you take out of your accounts. If you withdraw money too fast, you won’t leave enough invested to keep earning sufficient returns to cover your lifestyle in retirement, and you take a risk of your money running dry. This is true even if you start with a lot.

Let’s pretend, for example, that Mark is 70 years old. He retired at 67 with $3 million, but he already spent $1 million of it in his first three years of retirement, and now he’s worried about making his cash last.

So, how can Mark ensure that what’s left of his nest egg can support him throughout his retirement? Financial experts spoke to Moneywise to provide some advice on what Mark should do next.

Take stock of where the $1 million went

The first thing Mark needs to do is to take a hard look at how he spent so much so quickly.

“If someone were to have spent $1,000,000 in the first three years of retirement out of a total $3,000,000 nest egg they had saved, this would ring some alarm bells in the event the expenses were not expected,” Clifford Cornell (2), a CFP and financial advisor at Bone Fide Wealth, told Moneywise.

Steve Azoury (3), a ChFC and owner of Azoury Financial, agreed. “It’s important to understand what the $1 million was spent on,” Azoury said. “If the $1 million was spent on eliminating debt, like paying off homes and cars, then payments on those items wouldn’t need to be paid anymore in retirement.”

Cornell recommended taking a close look at all the one-off expenses that won’t recur to make sure that these were a substantial part of the initial spending. If they weren’t, this could be a big problem.

“If this is someone who is just now realizing their spending rate three years in, this can be a serious risk to their retirement,” he said.

Talk to an expert

Retirement is supposed to be about enjoying the freedom you’ve spent decades working toward — not worrying about whether your savings will run out. But it’s easy to underestimate how quickly retirement savings can disappear.

If your nest egg has shrunk faster than you expected, it’s worth taking a fresh look at your financial plan.

A financial advisor can help you separate essential expenses from discretionary spending while reviewing whether your investments still match your retirement goals. Those who work with financial advisors typically see 3% higher net returns compared to those who don’t, according to research from Envestnet (4).

A financial advisor may recommend shifting your portfolio toward assets with stronger long-term growth potential or adjusting your withdrawal strategy so you’re less likely to outlive your savings. That guidance can be particularly valuable for households with more than $250,000 — like Mark’s hypothetical example — in retirement savings, where even small portfolio adjustments can have a meaningful impact over the long run.

If you have a portfolio of this size, you can find a reputed FINRA/SEC-registered advisor near you for free through WiserAdvisor.

All you have to do is answer a few simple questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor will review its network and match you with up to three vetted, reputable advisors aligned to your specific needs.

WiserAdvisor does the heavy lifting when vetting financial advisors on its roster. Each advisor is screened based on their years of experience, their SEC/FINRA registration and records, and compensation criteria.

Just schedule a no-obligation consultation with your matches to find the best fit for your long-term goals.

Note: WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties and specific financial results are not guaranteed.

Identify fixed costs and how much to spend going forward

After Mark determines why he spent so much, the next step is making a plan for what he can and should spend going forward so his remaining $2 million doesn’t disappear just as fast.

“With only $2 million left, they obviously cannot spend $1 million a year, and without payments on debts, they should budget and not dig into any principal,” Azoury said.

Principal refers to the sum of money Mark invested in his working years. In most cases, experts advise that retirees only withdraw the earnings from their investments, assuming they will be replaced the following year.

Cornell recommends working backwards to see how much Mark’s remaining $2 million portfolio can produce at a comfortable withdrawal rate, then limiting spending to that amount.

While the standard 4% withdrawal rate can serve as a starting point, Mark may want to work with a financial advisor to create a personalized plan. Still, using the 4% rule as a guide, Mark would be able to spend around $80,000 based on the $2 million he has invested. And that’s before accounting for any Social Security benefits.

“Their current expense figures may drastically differ from what a $2,000,000 portfolio can provide,” Cornell said. “This is where lifestyle changes may need to be made. From there, I’d recommend keeping a very close eye on their spending until they get into a routine around a safe withdrawal rate.”

Stick to a budget

Retirement doesn’t mean you have to stop enjoying life — but it does mean your paycheck has likely stopped while your expenses keep coming. Without a spending plan, it’s surprisingly easy to withdraw more from your savings each month than your portfolio can comfortably support, especially as inflation woes persist.

After all, the first few years of retirement are sometimes called the “go-go years” for a reason. Lots of moving around, and lots of spending — time and health allowing.

Creating a realistic budget can help ensure your lifestyle matches your retirement income. Reviewing your monthly spending can reveal easy opportunities to save, whether it’s cutting back on dining out, reducing entertainment costs, or renegotiating recurring bills. Those seemingly minor savings can add up over time and help preserve more of your retirement fund.

Apps like Monarch Money can help you build a personalized budget, track your spending and see exactly where your money is going.

Monarch Money puts all your finances under one roof, from your banking statements to your investments. Once you link your accounts — including investments and real estate — you will be able to view every transaction through one clean, searchable list.

The platform can also help you forecast your spending beyond just one month.

Monarch Money also offers a seven-day free trial, so you can take a look around and see if it’s right for you. Even better, you can get 50% off your subscription for the first year when you sign up using the code WISE50.

Free up money

Once you’ve reviewed your budget, the next step is looking for expenses that have quietly grown over time and reducing them as best you can.

Insurance is a perfect example. Between February 2020 and August 2025, average car insurance premiums climbed roughly 55% (5).

If you haven’t filed a claim, there’s a good chance you’re simply paying more because you’ve stayed with the same insurer. Those higher premiums can quietly drain hundreds of dollars from your retirement budget every year — money that could otherwise stay invested or help fund travel, hobbies or emergency savings.

Instead of automatically renewing with the same insurer, shopping around can help you find a better rate.

Comparison platforms like Insurify let you view quotes from different providers all in one place, making it easier to spot potential savings and helping to ensure you aren’t paying a hidden “loyalty tax” to your current insurer.

Just answer a few basic questions and Insurify will show you the most affordable deals in as little as 3 minutes.

Not only is the process 100% free, but you could also save up to 15% by bundling your car and home insurance.

Other options to consider

Even after cutting unnecessary spending, unexpected expenses can still pop up during retirement. Rather than relying on high-interest credit cards, it may make sense to explore financing options that allow you to borrow at a lower cost.

A HELOC lets homeowners access the equity they’ve built over the years while maintaining flexibility. Since you only pay interest on the amount you use, it can be a more affordable option than carrying credit card balances — especially for larger expenses that would otherwise strain your retirement budget. If you’re planning to age in place, a HELOC can also be used to help fund retirement-focused upgrades to your home to make your golden years easier.

You can tap into your home equity with a HELOC from AmeriSave and access your full funds right at closing.

You can choose a draw period that fits your life — three, five, or 10 years — along with 20- or 30-year terms to suit your budget. And with a 10-year interest-only option, you can keep monthly payments manageable while you plan ahead.

It’s essentially a flexible credit line secured by your home, delivered through a mostly online application process. Just make sure you understand the repayment terms before committing.

Invest the money wisely

Finally, Mark needs to make sure he’s invested wisely.

Azoury recommends Mark consider his risk tolerance and make sound investment choices, which could include “a mix of equities and fixed accounts.” He also suggested that Mark “may want to consider an income annuity that would lock in income, assuring money will come in throughout his retirement.”

By setting a detailed budget based on a safe withdrawal rate and making sure the money is earning reasonable returns, hopefully Mark can preserve what’s left of his nest egg so he can have the secure retirement he deserves.

— With files from Christy Bieber

A 70-year-old blew through one-third of his $3 million nest egg in 3 years — financial advisors say he needs to act now

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