Can you retire on $900k [Updated April 2024] (2024)

However, if you model different spending scenarios, check the table below. It shows how $900k, assuming a 6% average annual return before taxes and 22% tax rate, would last over 25 years under different annual spending:

Initial savingsAnnual SpendingEnding Balance After 25 YearsEnough?Required Initial Savings
$50,000$845,246Yes$850,770
$60,000$556,735Yes$1,026,154
$900,000$70,000$268,224Yes$1,201,539
$80,000−$20,288No$1,376,923
$90,000−$308,799No$1,552,308

It's important to note that individual financial circ*mstances can vary significantly, finding a financial advisor is essential to develop a secure and personalized retirement plan.

How long will $900k last in retirement?

$900k can last you for over 25 years in retirement if your annual spending remains around $50,000, following the 4% rule.

However, it will depend on your age at retirement and spending needs as a retiree.

Assuming a 6% average annual return before taxes and 22% tax rate, the table below shows how long $900k could last under different yearly spending:

Spending Per YearYears It Will LastTotal InterestTotal WithdrawalTotal Taxes
$50,00028$1,260,000$1,400,000$308,000
$60,00023$1,035,000$1,380,000$303,600
$70,00019$855,000$1,330,000$292,600
$80,00017$765,000$1,360,000$299,200
$90,00015$675,000$1,350,000$297,000

Retirement plans, annuities and Social Security benefits should all be considered alongside the figure you have sitting in savings, and you should also bear in mind that expenses as a retiree tend to be low. Especially if any children are now financially solvent adults and large loans, such as your mortgage, have been paid off.

Can I retire on $900k plus Social Security?

With nearly $1 million saved for retirement, Social Security payments can provide a nice income bonus on top. But how much they’ll contribute depends on when you claim and your lifetime earnings.

The average monthly Social Security benefit is currently about $1,600. For an individual with average career earnings, this equates to $19,200 per year in retirement. Married couples would qualify for $32,000+ annually.

These benefits are increased by inflation and continue for life. So combined with prudent use of your $900k next egg, they provide an extra buffer. Your savings should generate around $36,000 yearly, allowing you to withdraw less early on while Social Security kicks in.

One consideration is taxation on your benefits, which varies based on income thresholds. With the right planning though, $900k in the bank and Social Security in your back pocket make for a financially-comfortable retirement.

What are the income taxes applicable to retirees with $900k?

When financially planning your retirement with $900,000 in savings, you must evaluate how taxes could reduce your accessible income. Your liability mainly depends on:

  • Your filing status (single filer, head of household, married filing jointly, etc.)

  • Where you live as states have varying tax rules

  • Where your retirement income is from (different tax rules per source)

  • Your total annual income

If you have a traditional pre-tax IRA, the withdrawals are taxable, while Roth IRAs allow tax-free withdrawals.

Here’s an example: You retire at 65 and plan for your $900k savings to last 20 years. Withdrawing $900,000 over 20 years means $45,000 in annual income, or $3,750 per month. This income level places you in the 24% federal income tax bracket for an individual, withdrawing from a traditional IRA or 401(k).

Can you retire at 50 with $900k?

Retiring 20+ years before conventional retirement age is certainly ambitious, but could be feasible with the right preparation and discipline. With $900,000 banked by 50, here are the key considerations:

  • What are your expected fixed annual expenses in early retirement (housing, healthcare, transportation, etc.)? Develop a detailed budget as these costs can add up substantially.

  • How much discretionary spending do you hope to cover for pursuits like travel and hobbies? Account for this in your income planning.

  • Can you maintain an investment portfolio optimized for an ultra early, potentially 40+ year retirement horizon to reduce sequence of returns risk?

  • Might you pursue side income via part-time work, monetizing a passion project, or other means? Extra income can give more flexibility.

While a $900k nest egg seems sizeable, spreading it over potentially 40+ years with inflation raises the degree of difficulty. Strict budgeting around necessities and luxuries and planning for supplementary income are imperative to increase the odds of sustaining this ultra early retirement goal.

Speaking with a financial advisor can provide an informed second opinion on the feasibility of achieving this dream, help stress test your income assumptions, and increase your chances of turning this vision into reality.

Try our retirement calculator

Put in your current details and our retirement calculator will tell you whether you are on track for retirement

Three routes to increased savings

You may now want to figure out how to increase your savings, growing that $900,000 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 $900k 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.

Can you retire on $900k [Updated April 2024] (2024)

FAQs

Can I retire with 900k in my 401k? ›

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.

Can I retire at 62 with $400,000 in 401k? ›

If you have $400,000 in the bank you can retire early at age 62, but it will be tight. The good news is that if you can keep working for just five more years, you are on track for a potentially quite comfortable retirement by full retirement age.

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.

How long will $800 000 last in retirement? ›

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.

What is the 401k limit for 2024? ›

Highlights of changes for 2024. The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan is increased to $23,000, up from $22,500. The limit on annual contributions to an IRA increased to $7,000, up from $6,500.

How much do I need in 401k to get $2000 a month? ›

With the $1,000 per month rule, if you plan to withdraw 5% of your savings each year, you'll need at least $240,000 in savings. If you aim to take out $2,000 every month at a withdrawal rate of 5%, you'll need to set aside $480,000. For $3,000, you would aim to save $720,000.

What is the average 401k balance at age 65? ›

Average and median 401(k) balances by age
Age rangeAverage balanceMedian balance
35-44$76,354$28,318
45-54$142,069$48,301
55-64$207,874$71,168
65+$232,710$70,620
2 more rows
Mar 13, 2024

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.

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

Using our portfolio of $400,000 and the 4% withdrawal rate, you could withdraw $16,000 annually from your retirement accounts and expect your money to last for at least 30 years. If, say, your Social Security checks are $2,000 monthly, you'd have a combined annual income in retirement of $40,000.

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.

How much money do most have when they retire? ›

Average retirement savings balance by age
Age groupAverage retirement savings balance amount
35-44$141,520
45-54$313,220
55-64$537,560
65-74$609,230
1 more row
Mar 5, 2024

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.

Is $800,000 enough to retire at 60? ›

If you have substantial income from sources like a pension and Social Security, an $800,000 portfolio could last for many years. That's especially true if your expenses are low and you don't have significant health care expenses.

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.

Is 800k enough to retire at 55? ›

Assessing The Amount Needed For Early Retirement

Retiring at 55 means you will need to fund an additional 12 years of retirement. Assuming you'll spend around 80% of your annual preretirement income each year, the additional savings needed to cover these 12 years amount to approximately $715,968.

Can I retire with 800k in my 401k? ›

If you have substantial income from sources like a pension and Social Security, an $800,000 portfolio could last for many years. That's especially true if your expenses are low and you don't have significant health care expenses.

Is $1 million in my 401k enough to retire? ›

A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.

How long will $1 million in 401k last in retirement? ›

How long will $1 million in retirement savings last? In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows. It's worth noting that most Americans are nowhere near having that much money socked away.

Is $900,000 enough for retirement? ›

Bottom Line. In theory, it's entirely possible for a 75-year-old to stretch $900,000 in savings for the rest of their life. Whether it will be enough for you depends on a number of factors including your expenses in retirement and your appetite for risk as an investor.

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