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 reshape the retiree’s financial trajectory. Benefits that fail to keep pace with rising expenses can quietly turn a rock-solid plan into a long, slow 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 choice. Stretching $920,000 across 28 years requires the portfolio to do real work without taking on equity-like risk in the years when it cannot afford a drawdown. This is no edge case: one in four women who retire at 67 today will still be drawing down savings well 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 settled near 5.28% and the 30-year has climbed to about 5.63%, levels not seen since the early 2000s. A laddered Treasury sleeve alone produces more than enough income on a modest 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 remaining portion 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, freeing up more than half the portfolio for growth. The tradeoff is significant: distributions in this tier rarely keep pace with inflation, and covered-call funds surrender 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 of dedicated capital. The danger is principal erosion. A retiree funding the gap from a 10% distribution while the underlying NAV slides 3% to 5% a year is drawing down the asset itself rather than 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 considerably more complicated. CPI rose 4.2% year-over-year through May 2026, the fastest pace since April 2023, propelled by a 23.5% surge in energy prices tied to ongoing hostilities in the Middle East. The Federal Reserve, under Chairman Kevin Warsh, raised the upper bound of the federal funds rate to 4.00% at its September 16, 2026 meeting, the first rate hike since 2023. The committee’s dot plot shifted sharply hawkish, with the median year-end projection rising to 4.1%. The Senior Citizens League issued its final pre-announcement forecast on September 11, projecting a 3.5% COLA for 2027. The official figure will be confirmed on October 14, 2026, when the Social Security Administration releases its statutory calculation. A 3.5% adjustment would exceed the 3.2% COLA of 2024, making it the largest annual benefit increase in three years.

Consider two scenarios starting from the same benefit. 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, creating a $12,000 annual gap the portfolio must fill. 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, with the outcome hinging entirely on which COLA path actually materializes.

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, one quarter earlier than projected in the prior year’s report. The accelerated timeline reflects, in part, reduced tax revenues flowing to the fund following passage of the “One Big Beautiful Bill Act.” At depletion, continuing payroll-tax revenue would cover only about 78% of scheduled benefits, a cut of roughly 22%, unless Congress acts. For a retiree who turns 67 today, that date arrives during her mid-70s, leaving limited runway for Congress to phase in any reform gradually. Benefit cuts of that scale would immediately widen the gap the portfolio must fill.

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 now at 3.75% to 4.00%, short-term Treasuries offer 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. With the 30-year Treasury near 5.63%, SPIA pricing is notably favorable for future purchases compared to the low-rate era of the early 2020s.
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 discipline: 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 to make it.

Editor’s note: Treasury yield figures were updated to reflect current levels of approximately 5.28% for the 10-year and 5.63% for the 30-year. The Fed funds rate section now reflects the September 16, 2026 rate hike to 3.75%-4.00% and the revised dot-plot median year-end projection of 4.1%. The TSCL 2027 COLA forecast was revised from 3.6% to 3.5%, reflecting the group’s September 11, 2026 final pre-announcement estimate, with the official SSA announcement date of October 14, 2026 added.

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