Living in Retirement

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How investment costs affect my retirement spending

Investment costs may not be the first thing you think of when you consider the risks to your retirement portfolio. However, in retirement, paying higher investment fees and expense ratios can reduce your income stream and your principal balance, leaving you with less money to spend or pass on to your heirs.

Lower costs, on the other hand, can help you keep more of your investment returns. By investing in low-cost funds or using reasonably priced investment advisors, you can preserve more of your assets to either spend on yourself or leave to your heirs. That could mean an extra trip each year for you and your spouse or more money to give to your grandchildren.

Use the following interactive example to see how lowering your investment costs can help increase the amount of money you have available to spend each year in retirement.

Impact of costs on annual withdrawals

Explore our low-cost mutual fund and ETF (exchange-traded fund) lineups, or use our interactive tool to compare fund costs between a fund you already own to a comparable Vanguard fund.


Data source for the interactive illustration above: The amounts shown in this illustration represent initial annual amounts based on the information you entered. This illustration assumes a fixed rate of return, and that you will take withdrawals adjusted for 4% inflation that will liquidate your entire portfolio over the time horizon you specify above. The amount is for illustrative purposes only and does not represent a recommended withdrawal. It's important to note that returns, inflation rates, and the length of your retirement are uncertain and unpredictable. This calculator illustrates how cost differences affect a given withdrawal strategy that may also involve substantial investment risk and other risks. You should consider your own circumstances and risk tolerance when determining how much of your portfolio you can safely spend.

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