Reducing living expenses can be an impactful way for pre-retirees and retirees to maintain their portfolios and preserve assets in the face of market volatility.

SmartAsset studied just how much reducing expenses can elongate the lifespan of a retirement portfolio by analyzing three cost-cutting scenarios. In each scenario (see chart below), the retiree starts out with $500,000 saved in a retirement account to supplement Social Security and withdraws only as much as they need to live. The model assumes inflation of 2.2% and investments returning 5.5% per year.

In the first scenario, the retiree withdraws $2,559 per month from her account to cover living expenses. Retiree B spends $250 less per month than retiree A and Retiree C reduces spending by $500 per month. According to SmartAsset's model, Retiree A's savings will last for 21 years and 6 months, while Retiree B's savings will last 24 years and 9 months and Retiree C's savings will last 29 years and 3 months.

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