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

A 67-year-old retiree with $920,000 saved and drawing a $2,800 monthly Social Security benefit appears, at first glance, to be in remarkably strong shape. With annual spending set at $58,000, the portfolio only needs to cover about $24,400 per year after Social Security income, translating to a withdrawal rate near 3%. On paper, that number looks comfortably sustainable, the kind of figure retirement calculators tend to greet with a reassuring green checkmark.

The real uncertainty hides inside a deceptively small detail: future cost-of-living adjustments on Social Security. Over a retirement that could stretch 28 years or more, even modest differences in inflation and COLA growth can dramatically change the retiree’s financial trajectory. If benefits fail to keep pace with rising expenses, a plan that once looked rock-solid can slowly turn into a long, quiet battle against shrinking purchasing power.

Why 95 Is the Right Planning Horizon

SSA Period Life Table data implies a healthy 67-year-old woman has roughly a 50% chance of reaching 88, a 25% chance of reaching 93, and a 10% chance of reaching 96. Planning to 95 is the responsible step. Stretching $920,000 across 28 years requires the portfolio to do real work without taking on equity-like risk in the years it cannot afford a drawdown. This is not a theoretical edge case. One in four women who retire at 67 today will still be drawing down savings into their mid-90s.

The $24,400 Yield Math at Three Risk Levels

The portfolio only has to cover the gap between spending and Social Security. Here is what that gap costs at three yield tiers, using current market reference points.

Conservative tier, 3% to 4%. Broad dividend growth equity funds, investment-grade bond ladders, and Treasury notes anchor this tier. The 10-year Treasury recently traded around 4.5% and the 30-year has pushed above 5%, which means a laddered Treasury sleeve alone produces more than enough on a small slice of capital. To generate the full $24,400 at 3.5%, the math is $24,400 divided by 0.035, or about $697,000 of capital. The rest of the $920,000 can stay growth-oriented to fund years 15 through 28.

Moderate tier, 5% to 7%. REITs, preferred shares, covered-call equity funds, and high-dividend value strategies live here. At 6%, $24,400 divided by 0.06 requires about $407,000 of dedicated income capital. That frees up more than half the portfolio for growth, but distributions in this tier rarely keep up with inflation, and covered-call funds give up the upside that compounds a 28-year plan.

Aggressive tier, 8% to 14%. Business development companies, mortgage REITs, and leveraged option-income funds can cover the gap on a much smaller capital base. At 10%, $24,400 divided by 0.10 requires just $244,000. The risk is principal erosion. A retiree who funds the gap from a 10% distribution and watches the underlying NAV slide 3% to 5% a year is spending the asset itself, not living off it.

The COLA Variable That Breaks or Makes the Plan

Social Security awarded a 2.8% COLA for 2026, up from 2.5% in 2025, and the average COLA over the past decade has run about 3.1%. The backdrop driving those adjustments is now more complicated. CPI rose 4.2% year-over-year through May 2026, the fastest pace since April 2023, lifted by energy prices linked to Middle East tensions. The Federal Reserve held the upper bound of the federal funds rate at 3.75% through its June 17, 2026 meeting. With inflation running well above target, some analysts expect the 2027 COLA to come in meaningfully higher than this year’s 2.8%.

Run two scenarios with the same starting check. If COLA averages 2.5% a year, the Social Security benefit grows to roughly $66,000 annually by age 95. If COLA averages only 1.8%, it grows to about $54,000, a $12,000 annual gap the portfolio must cover. Over a decade in the 90s, that gap compounds into hundreds of thousands of dollars of additional drawdown. At 4% portfolio growth net of 2% spending inflation, the real balance at 95 lands somewhere between $720,000 and $1.1 million, depending entirely on which COLA path actually shows up.

There is also a structural wildcard. The 2026 Social Security Trustees Report, released June 9, projects that the OASI trust fund will deplete its reserves in the fourth quarter of 2032. At that point, continuing payroll-tax revenue would cover only about 78% of scheduled benefits unless Congress acts. For a retiree who turns 67 today, that date falls during her mid-70s. Benefit cuts of that magnitude would immediately widen the gap the portfolio must fill, adding urgency to the income-layering strategies below.

Here’s How to Buy Margin

1. Build a 24-month cash reserve. Holding two years of the $24,400 gap in T-bills or a money market fund means a bear market never forces a sale at the bottom. With the Fed funds rate at 3.50% to 3.75%, short-term Treasuries offer a meaningful yield while the retiree waits out volatility.
2. Plan a modest annuitization window at 75 to 80. A $150,000 single-premium immediate annuity purchased in that window could pay roughly $1,200 a month for life, providing longevity insurance for the tail past 90. The 30-year Treasury trading above 5% supports favorable SPIA pricing right now for future purchases.
3. Consider a QLAC at 73. A qualified longevity annuity contract defers some required minimum distributions past 85, protecting against the exact scenario where the retiree outlives the conservative projection.

Pair these with a spending rule: in any year the portfolio drops 15% or more, cut the withdrawal rate from roughly 3% to about 1.5% until it recovers. The math at 67 is generous. The math at 87 is whatever COLA, Congress, and inflation together decide it will be.

Editor’s note: This article was updated to reflect the 2026 Social Security COLA of 2.8% and the 2025 COLA of 2.5%, the 10-year COLA average of approximately 3.1%, current CPI of 4.2% year-over-year through May 2026, the Federal Reserve’s federal funds target range of 3.50% to 3.75% held through June 17, 2026, and the 2026 Social Security Trustees Report projection that the OASI trust fund will deplete in Q4 2032 with 78% of benefits payable at that point unless Congress acts.

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