Can you retire on $800k [Updated April 2024] (2024)

1 min readLast updated March28,2024by Rachel Carey

Here’s everything you need to consider, from retirement income taxes to wealth-increasing tips, if you plan to retire with $800k.

Can you retire on $800k?

Yes, $800k provides a healthy nest egg that allows for annual withdrawals of around $32,000 from the age of 60 to 85, spanning 25 years. If $32,000 per year, or $2,667 per month, is sufficient to cover your retirement lifestyle, then $800k gives you an adequate buffer.

Initial SavingsAnnual SpendingEnough?Ending Balance after 25 yearsRequired Initial Savings
$40,000Yes$707,594$722,462
$50,000Yes$461,982$981,846
$800,000$60,000Yes$206,666$1,161,538
$70,000Barely$8,350$1,341,231
$80,000No-$190,807$1,520,923

So with an initial $800k nest egg, you could potentially withdraw between $50k-70k per year over 25 years before depleting your retirement savings completely.

How long will $800k last in retirement?

An $800k nest egg can provide income for over 25 years in retirement if you limit annual withdrawals to around $32,000 (4% rule).

The duration will vary based on your age at retirement and actual spending levels each year. Assuming a 6% average annual return before taxes and 22% tax rate, see projections below:

Spending Per YearYears It Will LastTotal InterestTotal WithdrawalTotal Taxes
$40,00028$1,680,000$1,120,000$246,400
$50,00023$1,380,000$1,150,000$253,000
$60,00019$1,140,000$1,140,000$250,800
$70,00016$960,000$1,120,000$246,400
$80,00014$840,000$1,120,000$246,400

With $800k initially saved, you could withdraw $40k-60k annually and still have your portfolio last between 19-28 years. The higher your spending amount, the faster your savings get depleted. Assessing your specific retirement costs and life expectancy is key to determining withdrawal rate.

Consulting with an experienced financial advisor can provide tailored advice to assess your retirement needs based on your situation. Match with a financial advisor below.

Can I retire on $800k plus Social Security?

As we have established, retiring on $800k is entirely feasible. With the addition of Social Security benefits, the possibility of retiring with $800k becomes even more possible.

Adding in the current average annual Social Security benefit of $21,600 ($1,800 per month) increases your stable retirement income streams. This gives you more options when determining a withdrawal rate from your $800k savings balance to make it last.

For example, withdrawing $60,000 per year from your savings plus collecting $21,600 from Social Security provides $81,600 in annual retirement income. This combination allows your $800,000 savings to last for approximately 19 years without being fully depleted, based on earlier projections.

Remember Social Security benefits can be taxed, so it's important to optimize their combination with your personal savings in a tax-efficient manner. Meeting with a financial advisor can help determine the ideal personalized strategy for your $800k retirement account plus Social Security income situation.

What are the income taxes applicable to retirees with $800k?

Determining the tax implications of your retirement income is an important part of financial planning when you have $800,000 saved. While your yearly tax bill may not be excessive if you withdraw funds gradually over 20+ years, several key factors impact how much you will owe:

  • Your tax filing status (single, married filing jointly, etc)

  • Your state of residence

  • The source of retirement funds (pre-tax IRA, Roth IRA, etc)

  • Total annual retirement income amount

For example, if you retire at 65 and distribute the $800,000 evenly over 20 years, you would receive around $40,000 annually ($3,333 monthly). Assuming you file taxes as a single person, this income would place you in the 22% federal bracket plus applicable state taxes.

However, if the same $40,000 were from a Roth IRA that you contributed to post-tax during your working years, your withdrawals would be tax-free in retirement. Consulting a financial planner can help you optimize sources and taxation to maximum your long-term withdrawal rate.

Can you retire at 50 with $800k?

It is certainly possible to retire by age 50 with $800,000 in the bank, but you would need to adopt a relatively frugal lifestyle.

Using the 4% safe withdrawal rule, you could take out $32,000 per year, or $2,667 monthly. This should sustain you for 25 years until age 75. If you estimate living longer to 85 or 90, your annual withdrawals would need to be reduced accordingly.

While $32,000 annually is not an extravagant retirement income, strict budgeting and modest living expenses should allow you to leave your career early. Even if 50 proves unrealistic, you could likely achieve financial independence in your mid to late 50s.

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Three routes to increased savings

You may now want to figure out how to increase your savings, growing that $800,000 to $1 million or more to give yourself some additional breathing room. Some extra disposable income as a retiree. Our best recommendations are as follows:

  1. Adjust your monthly budget and save where possible – try to avoid regularly spending your money on unnecessary things that matter less to you, in the grand scheme of things, than a happy and comfortable retirement. Set achievable lifestyle and financial goals with proper consideration of your future self. Cut back where you can, and redirect that money where it can be better used.

  2. Build a varied portfolio of investments, seeking expert advice – a solid and stable investment portfolio comprising several types of securities could be very helpful to you, significantly boosting your savings and improving your retirement. If you don’t know where to begin, speak with an expert financial advisor to get started on your journey into investing.

  3. Find the right retirement and pension products – many different savings accounts and products are available that can be helpful to you as a retiree. Annuities, for example, convert your savings into a guaranteed monthly income for a given period. This period could be the rest of your life if you purchase an annuity with a lifetime income rider.

The bottom line

If you’ve managed to save $800k for retirement, this is a viable savings for your post-work life.

This will guarantee you a valuable degree of security and comfort in your later years, and it’s a figure many will never reach

For retirement planning advice and investment guidance, connecting with an experienced financial advisor is highly recommended. They can guide you through the daunting world of retirement planning and lead you to success. Get started with Unbiased and find your perfect match.

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.

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Can you retire on $800k [Updated April  2024] (2024)

FAQs

Can you retire on $800k [Updated April 2024]? ›

Can you retire at 50 with $800k? It is certainly possible to retire by age 50 with $800,000 in the bank, but you would need to adopt a relatively frugal lifestyle. Using the 4% safe withdrawal rule, you could take out $32,000 per year, or $2,667 monthly. This should sustain you for 25 years until age 75.

How long will $750,000 last in retirement? ›

Under the 4% method, investment advisors suggest that you plan on drawing down 4% of your retirement account each year. With a $750,000 portfolio, that would give you $30,000 per year in income. At that rate of withdrawal, your portfolio would last 25 years before hitting zero.

How long will $900 000 last in retirement? ›

Yes, it is possible to retire very comfortably on $900k. This allows for an annual withdrawal of around $36,000 from age 60 to 85, covering 25 years. If $36,000 per year or $3,000 per month meets your lifestyle needs, $900k should be plenty for retirement.

How many years will $300 000 last in retirement? ›

$300,000 can last for roughly 26 years if your average monthly spend is around $1,600. Social Security benefits help bolster your retirement income and make retiring on $300k even more accessible. It's often recommended to have 10-12 times your current income in savings by the time you retire.

What is the average 401k balance for a 65 year old? ›

$232,710

Is $800,000 good for retirement? ›

If you have substantial income from sources like a pension and Social Security, an $800,000 portfolio could last for many years.

What is a good monthly retirement income? ›

Average Monthly Retirement Income

According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.

What is the 4 rule for retirement? ›

The 4% rule limits annual withdrawals from your retirement accounts to 4% of the total balance in your first year of retirement. That means if you retire with $1 million saved, you'd take out $40,000. According to the rule, this amount is safe enough that you won't risk running out of money during a 30-year retirement.

Can I retire on 500k plus Social Security? ›

Key takeaways: Most people in the U.S. retire with less than $1 million. $500,000 is a healthy nest egg to supplement Social Security and other income sources. Assuming a 4% withdrawal rate, $500,000 could provide $20,000/year of inflation-adjusted income.

Can I retire with $400 000 and Social Security? ›

Using the standard 4% withdrawal rule, this would let us pull $16,000 per year from the retirement account. Combined with Social Security, this would give you $31,000 per year in pre-tax income. This isn't much to live on and it would only last you about 25 years before your portfolio runs out.

Is $300000 enough to retire on with Social Security? ›

If you earned around $50,000 per year before retirement, the odds are good that a $300,000 retirement account and Social Security benefits will allow you to continue enjoying your same lifestyle.

Can I retire at 62 with 300k in my 401k? ›

$300k is sufficient for many people to retire, in part because you can avoid some of the biggest tax hurdles that may arise for more wealthy retirees. That said, whether or not it's enough depends on your circumstances (spending levels, location, health, and more).

Is 3000 a month enough to retire? ›

That means that even if you're not one of those lucky few who have $1 million or more socked away, you can still retire well, so long as you keep your monthly budget under $3,000 a month.

At what age is 401k withdrawal tax free? ›

Once you reach 59½, you can take distributions from your 401(k) plan without being subject to the 10% penalty. However, that doesn't mean there are no consequences. All withdrawals from your 401(k), even those taken after age 59½, are subject to ordinary income taxes.

What is a good 401k balance at age 60? ›

Fidelity says by age 60 you should have eight times your current salary saved up. So, if you're earning $100,000 by then, your 401(k) balance should be $800,000.

How many people have $1000000 in retirement savings? ›

However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.

Can you retire comfortably with 750000? ›

Many Americans target $1 million as their “dream nest egg” for retirement, but the truth is that in many states, even $750,000 can be more than enough. Although your longevity and your lifestyle can greatly impact how much you'll need for a successful retirement, the state in which you live can also play a big role.

How long can you live on $700 000? ›

How long will $700k last in retirement? $700k can last you for at least 25 years in retirement if your annual spending remains around $40,000, following the 4% rule. However, it will depend on how old you are when you retire and how much you plan to spend each month as a retiree.

Can you retire with $700 K? ›

The longevity of $750,000 in retirement hinges on yearly expenses, investment yields, inflation, and other variables. On average, a 4% annual withdrawal ($30,000) could extend over 25 years.

What is the $1000 a month rule for retirement? ›

Understanding the $1,000-a-Month Rule: The $1,000-a-month rule is a simplified formula designed to help individuals calculate the amount they need to save for retirement. According to this rule, one should aim to save $240,000 for every $1,000 of monthly income they anticipate requiring during retirement.

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