Can you retire on $500k [Updated May 2024] (2024)

However, if you consider different spending scenarios, check the table below, which illustrates how $500k, with an average annual return of 6% before taxes and a 22% federal tax rate, would perform under different yearly spending situations after a 25-year period:

Initial savingsAnnual SpendingEnough?Ending Balance after 25 yearsRequired Initial Savings

Based on the calculation in the table, if your expected annual spending exceeds $35,000, $500k might not be enough to cover your expenses over 25 years in retirement.

How long will $500k last in retirement?

$500k can last you for at least 25 years in retirement if your annual spending remains around $20,000, 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.

Assuming an average annual return of 6% before taxes and a 22% federal tax rate, the table below offers a detailed breakdown of how long $500k can last across various annual spending scenarios:

Spending Per YearYears It Will LastTotal InterestTotal WithdrawalTotal Taxes

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.

Ready to take charge of your retirement planning? Plan your retirement confidently with our retirement calculator. It provides personalized insights for your financial future.

Can I retire on 500k plus Social Security?

As we have established, retiring on $500k is entirely feasible. With the addition of Social Security benefits, the possibility of retiring with $500k becomes even more possible.

In retirement, Social Security benefits can provide an additional $1,800 per month, on average. This additional income can help you achieve the retirement lifestyle you want.

You can start receiving Social Security benefits as early as 62. However, these will be at a reduced amount. Your full benefits only become available once you reach full retirement age. For those born during or after 1960, this is 67.  

Social Security benefits are also taxable, which is important to consider if you plan to rely on this money to supplement your retirement income. How much tax you pay depends on your overall retirement income and several other factors, including the state you reside in, as some taxes opt not to tax Social Security.

What are the income taxes applicable to retirees with $500k?

When working through your later-life checklist and financially preparing for retirement, you must consider how taxes will factor in. You’ll need to know how much they will reduce your final amount of accessible, usable income. With $500,000 in savings, your bill likely won’t be extortionate – especially if you plan to spread withdrawals across 20 years or more. But ultimately, your tax liability will come down to:

Regarding the impact of your income source, if you have a traditional pre-tax IRA (Individual Retirement Account), your distributions will be levied for tax at the point of withdrawal. Whereas if you have an after-tax Roth IRA, you’ll already have paid that tax when the money entered the account and can withdraw tax-free.

Here’s a quick example: You plan to retire at 65 and hope your retirement savings will see you through 20 years. Distributing $500,000 evenly across these 20 years, you’re looking at monthly payments of $2,083 and an annual income of $25,000. This would place you within the second-lowest federal income tax rate band of 12%.

Can you retire at 50 with $500k?

It’s undoubtedly feasible to enjoy an early retirement at 50 with $500,000, but it won’t necessarily be easy, and it might necessitate some compromise on your part.

Applying the 4% percent rule discussed earlier, you can theoretically withdraw $20,000 per year, or $1,667 per month, for 30 years, taking you up to age 80. This figure may be lowered or increased in value by inflation and market conditions. If you increase your life expectancy to 85 or 90, it will be reduced by those additional years.

Overall, with a moderately frugal lifestyle and expenses totaling less than $20,000 each year, you should be able to leave the workforce earlier than you once anticipated you’d be able to. Even if you can’t do it by age 50, getting close at that point might mean you could make it happen at, say, 55.

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Three routes to increased savings

You may now want to figure out how to increase your savings, growing that $500,000 to $600,000 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 $500k 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.

Frequently asked questions

Can you retire on $500k [Updated May 2024] (2024)


Can you retire on $500k [Updated May 2024]? ›

Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $20,000 from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.

Can I retire on $500,000 plus Social Security? ›

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

How many people have $500,000 when they retire? ›

How much do people save for retirement? In 2022, about 46% of households reported any savings in retirement accounts. Twenty-six percent had saved more than $100,000, and 9% had more than $500,000. These percentages were only somewhat higher for older people.

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? ›


At what age can you retire with $500000? ›

If you cut expenses by $4,000 per year or $11 per day, the numbers work to retire at age 60 with $500,000. “If you choose to live on $45,000 per year, you could claim Social Security at age 62 and fully fund your retirement until age 90.”

When should I retire if I have $500000? ›

It may be possible to retire at 45 years of age, but it depends on a variety of factors. If you have $500,000 in savings, then according to the 4% rule, you will have access to roughly $20,000 per year for 30 years. Retiring early will affect the amount of your Social Security benefit.

What is a good monthly retirement income? ›

Many retirees fall far short of that amount, but their savings may be supplemented with other forms of 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.

Can you live off the interest of $500,000? ›

Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $20,000 from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.

How much do most Americans retire with? ›

Average retirement savings balance by age
Age groupAverage retirement savings balance amount
75 and older$462,4100.
2 more rows
May 7, 2024

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

The $1,000-a-month retirement rule says that you should save $240,000 for every $1,000 of monthly income you'll need in retirement. So, if you anticipate a $4,000 monthly budget when you retire, you should save $960,000 ($240,000 * 4).

How long can I retire on $500k plus Social Security? ›

According to the 4% rule, if you retire with $500,000 in assets, you should be able to withdraw $20,000 per year for 30 years or more. Moreover, investing this money in an annuity could provide a guaranteed annual income of $24,688 for those retiring at 55.

What should your net worth be to retire at 60? ›

And by age 60, you should have six to 11 times your salary saved in order to be considered on track for retirement. For example, a 35-year-old earning $60,000 would be on track if she's saved about $60,000 to $90,000.

How many Americans have no savings for retirement? ›

More than one-quarter of them have no retirement savings at all, according to a new study by the personal finance website GoBankingRates . The study surveyed more than 1,000 U.S. adults about their long-term savings, and the results were alarming: 28% had absolutely nothing saved for retirement.

How much does the top 1 have in retirement savings? ›

Here is a breakdown of the estimated top 1% retirement savings by age group:
  • 30-34 years: $365,000.
  • 35-39 years: $730,000.
  • 40-44 years: $1,234,600.
  • 45-49 years: $1,397,000.
  • 50-54 years: $2,311,000.
  • 55-59 years: $3,105,000.
  • 60-64 years: $3,550,000.
  • 65-69 years: $4,574,000.
Apr 30, 2024

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

By age 50, you should have six times your salary in an account. By age 60, you should have eight times your salary working for you. By age 67, your total savings total goal is 10 times the amount of your current annual salary. So, for example, if you're earning $75,000 per year, you should have $750,000 saved.

What is the highest Social Security you can get when you retire? ›

The maximum Social Security check

Your maximum benefit if you file at age 62 – the youngest possible age – is $2,710 per month. Your maximum benefit if you file at full retirement age – between 66 and 67 – is $3,822 per month.

What is the maximum Social Security payment for retirement? ›

The maximum Social Security benefit you can receive in 2024 ranges from $2,710 to $4,873 per month, depending on the age you retire. "Maximum benefits can be received by delaying the start of benefits until age 70 since benefits increase by about 8% for each year you delay beyond full retirement age.

What is Max Social Security at full retirement? ›

The most an individual who files a claim for Social Security retirement benefits in 2024 can receive per month is: $2,710 for someone who files at 62. $3,822 for someone who files at full retirement age (66 and 6 months for people born in 1957, 66 and 8 months for people born in 1958).

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