You'll often hear that it's important to consistently fund an IRA or 401(k) over time. And the sooner you begin putting money into one of these accounts, the more opportunity you'll have to benefit from investment gains.
But maybe it was a struggle for you to build retirement savings. Maybe you had to cope with stagnant wages, expensive medical bills, and other costs that got in the way of building a large nest egg.
If you're nearing retirement with just $50,000 in savings, the reality is that you're frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn't a ton of money.
So if you have less than half of that, you'll need to be very careful about managing your cash reserves. But you should also know that you're not doomed to a cash-strapped retirement just because you only happen to have $50,000 socked away.
Don't forget about Social Security
Many people struggle to live on Social Security alone in retirement. But the reality is those benefits might help sustain you to a large degree.
The average senior on Social Security today collects $1,848 a month. That's over $22,000 a year. Even if you're only taking a few thousand dollars a year out of your savings because that's all you can afford, there's still another steady source of income you can fall back on.
Part-time work and frugal living could save your retirement
The long-time convention was to stick to a 4% withdrawal rate for retirement savings. So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you're willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.
You might also need to make some frugal choices in retirement to compensate for not having a ton of savings. That could mean downsizing to a less expensive home or limiting yourself to local travel instead of taking big trips.
You may also need to be mindful of smaller expenses, too. If money is tight, you may have to stick to one streaming service instead of having multiple. And you might have to mostly cook your own food rather than dine out regularly.
But that doesn't have to lessen your quality of life. If you learn to embrace those things, you can make the best of a limited income. That could, for example, mean broadening your cooking horizons and exploring new recipes you're excited to eat.
In an ideal world, you'd be retiring with a lot more money than $50,000. But if that's all you have to work with, don't assume the worst. With some reasonable lifestyle adjustments, you can set yourself up to enjoy a fulfilling retirement, even if you have to limit your spending.
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FAQs
So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you're willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.
Can I retire at 65 with no savings? ›
You can still live a fulfilling life as a retiree with little to no savings. It just may look different than you originally planned. With a little pre-planning, relying on Social Security income and making lifestyle modifications—you may be able to meet your retirement needs.
What does the average person retire with in savings? ›
The above chart shows that U.S. residents 35 and under have an average of $30,170 in retirement savings; those 35 to 44 have an average $131,950; those 45 to 54 have an average $254,720; those 55 to 64 have an average $408,420; those 65 to 74 have an average $426,070; and those over 70 have an average $357,920.
What is the smartest thing to do with $50,000? ›
The safest way to invest $50,000 would be to put it into a savings account or CD. However, you could also invest in stocks or real estate, start or add to a retirement account, and more. Your goals, risk tolerance, and time horizon until retirement will determine the right choice for you.
How many Americans have 50k in savings? ›
Personal Savings in the U.S.
18 percent said their saving were at least $1000 but under $10,000, while 11 percent each had $10,000 to $49,999 and $50,000 or more saved up.
How many Americans have over 50k in savings? ›
And this trend has been made worse by the COVID-19 Pandemic, as a third of Americans say they're worse off now than they were before 2020. 58% of Americans have less than $5,000 in savings. More specifically, 42% have less than $1,000 in savings, while another 20% have more than $50,000 in savings.
What if I have no savings when I retire? ›
Individuals who have not saved for retirement and who still own homes can turn to their homes as a source of income. For some, this could mean renting a portion of their space as a separate apartment. Another option is to take a reverse mortgage on a home, although doing so can be costly and complicated.
What is the least amount of money you need to retire? ›
Some experts say to have at least eight to 10 times your annual salary available to you once you enter retirement. Others say you need at least 65% to 80% of your pre-retirement income available to you each year. There are also general savings recommendations by age, and, finally, there's the 4% rule, too.
How much does the average 65 year old retiree have in savings? ›
According to data from the Federal Reserve's most recent Survey of Consumer Finances, the average 65 to 74-year-old has a little over $426,000 saved.
What is the average social security check? ›
Social Security offers a monthly benefit check to many kinds of recipients. As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
Let's say you consider yourself the typical retiree. Between you and your spouse, you currently have an annual income of $120,000. Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.
How much do most Americans retire with? ›
The average retirement savings for all families is $333,940 according to the 2022 Survey of Consumer Finances. Taken on their own, those numbers aren't incredibly helpful. There are a variety of decent retirement savings benchmarks out there, but how much money other people have isn't one of them.
Is 50k a lot of money in savings? ›
The average U.S. household savings is around $5,500, according to the Federal Reserve. So when you have $50,000 sitting in the bank, you might feel pretty good about your finances.
How to double 50k? ›
- Real Estate Investing via Arrived: My favorite way to turn $50k into $100k is through real estate investing with Arrived. ...
- Index Funds through Acorns: ...
- Passive Income Generation with ETFs: ...
- Direct Real Estate Investments: ...
- Investing in REITs: ...
- Mutual Funds Investments: ...
- Blogging for Profit: ...
- House Flipping Ventures:
If you're investing for a near-term goal, safer investments like bonds, high-yield savings accounts, or CDs may be better. If you're in it for the long run, you could go with options like the stock or real estate markets. Ultimately, it depends on your financial goals, risk tolerance, and time horizon.
Is 50k in savings good for a 30 year old? ›
By 30, it would be beneficial to have $50,000 saved. This comes from the goal of being able to replace about 70% to 80% of your pre-retirement income in retirement.” While having the equivalent of your annual salary saved up by 30 may seem unattainable, Kovar believes it's achievable if you start saving in your 20s.
At what age should you have 50k saved? ›
Here's how much cash they say you should have stashed away at every age: Savings by age 30: the equivalent of your annual salary saved; if you earn $55,000 per year, by your 30th birthday you should have $55,000 saved. Savings by age 40: three times your income. Savings by age 50: six times your income.
How much do I need to generate $100,000 a year in retirement? ›
So, if you're aiming for $100,000 a year in retirement and also receiving Social Security checks, you'd need to have this amount in your portfolio: age 62: $2.1 million. age 67: $1.9 million. age 70: $1.8 million.
Can I retire at 60 with 100k in savings? ›
“Retiring on $100,000 is quite a challenge, especially considering the average length of retirement and cost of living,” said Jeff Rose, CFP and founder of Good Financial Cents. “According to data from the Bureau of Labor Statistics, the average yearly expenses for those age 65 and older hover around $50,000.”
