Can I Retire at 60 with $500K? [YES! See Examples of How]

Maybe you’re a 60-year old man who’s spent his whole life saving money diligently little by little. You worked hard to earn a living and knew that in the end the thing you really cared about was having enough for when you retired.

Now that time has come and possibly all of your hard work has finally paid off by saving up $500K in savings. You ask yourself, “Can I retire at 60 with $500K?”

The average person who saw this account balance might be tempted to go out and spend their wealth on an expensive car or other things that were not important to their long-term well being.

However, this isn’t the case for you. Instead, you only want to have enough saved up so that you can retire at a young age with minimal stress involved in making sure your retirement savings would last you until death.

It is rare nowadays to find somebody who spends their entire life working and getting to the point of asking whether they can retire securely, let alone early.

Therefore, you should enjoy it and make sure that before you retire at 60 with $500K or more in savings, your money will last.

Millions of baby boomers and Gen-Xers are in or nearing retirement age and wonder what their magic number is. Plenty of middle-aged folks wonder whether they can retire at 60 with $500k in retirement assets.

This article examines the considerations you can make as well as runs scenarios for your potential early retirement.

Can I Retire at 60 with $500,000?

young and the invested

The answer to this question depends entirely on where you live, your lifestyle, types of investments, other income sources and whether you want to work part-time in retirement.

If you see retirement including travel, some hobbies or interests that consume a lot of money, then you should budget for them ahead of time.

You don’t want to exit the workforce with your nest egg only to find out you don’t have the financial resources to meet your expectations.

→ How Much Money Do I Need to Live On?

When deciding how much you need to live on in retirement, you’ll need to consider a number of factors unique to your situation and ideal retirement:

  • How much money you spend on housing every month
  • How much money you spend on food every month
  • What types of transportation and health insurance you want to budget for (You’ll need health coverage if retiring before Medicare eligibility and possibly supplemental coverage to Medicare in retirement)
  • Types of leisure activities that are important to your retirement plan
  • How much you plan to spend on entertainment
  • Do you wish to provide support to grandchildren through custodial accounts or other educational savings accounts?
  • Do you intend to donate to charities you support?

The considerations you will make for how much you need to live on depends on any number of factors.

It’s important to take stock of your priorities you won’t compromise on while also finding areas that can fall to the wayside once you enter into retirement.

You’ll also want to size how much nest egg you’ll need by identifying a number of other important factors to consider:

  • The number of years you plan on living in retirement (A longer lifespan will require more savings)
  • How much money your spouse makes, and how many children under 18 you have at home or plan to support financially (if at all).
  • The types of investments you plan to hold in retirement and how much you intend to invest in growth or income investments
  • Your geographical location, which affects the cost of housing and other expenses significantly

Regarding this last point, for example, imagine you live in a high-cost area such as New York City. A lower cost state like Arkansas may be an ideal place to retire with $500k plus at age 60.

Likewise, some states are less expensive than others based on their geography or tax policies so it’s important that these factors are accounted for when determining what will work best for your lifestyle needs during retirement.

To calculate your cost of living by location, you can use one of many online calculators to estimate how much money you’ll need for an adequate level of living in retirement.

There’s no way around it: this is a complicated calculation! But I’ve put together some resources here so we can walk through it step by step with as few surprises along the way as possible.

→ Social Security Payments: How Much Can I Expect?

Social Security is the single largest source of retirement income for millions of Americans. Many depend on this income to pay their bills in retirement, so knowing how much you can expect plays a major role in how you can prepare for retirement.

The first official year you can start collecting Social Security is age 62 unless you’ve become disabled and qualify for the Social Security Disability Insurance (SSDI) or Supplemental Security Income (SSI) programs.

If you don’t qualify for these programs and will receive payments through the Old Age, Survivors, and Disability Insurance (better known simply as Social Security), you might want to think through your options before requesting your payments to start.

More to the point, just because you can start collecting payments at age 62 doesn’t mean it’s the best financial decision for you.

If you elect to begin receiving payments on your first day of eligibility, you’ll only be able to withdraw 70% of your benefit should you have waited until full retirement if born in 1960 or later.

If you elect to start your benefits early rather than waiting until full retirement age (FRA), your benefits will be reduced by a small percent for each month before reaching your specific full retirement age.

For every year you can delay claiming your Social Security benefits, you stand to earn more of your full potential benefit.

As of June 2021, the average monthly Social Security benefit is $1,555. That’s about $18,500 per year in income.

But because of inflation and other factors, this will not go as far as you may think it would when your retirement time rolls around!

Your specific payment will depend on a number of factors. The portion of your pre-retirement wages earned comes based on your highest 35 years of earnings.

When deciding when you should start receiving your benefits, you’ll want to consider the following items when deciding:

  • Are you still working?
  • What is your life expectancy?
  • Will you still have health insurance if you retire before Medicare eligibility?
  • Are you eligible for someone else’s benefits?
  • Do you have other income to support you if you decide to delay taking your benefits?
  • Will other family members qualify on your record?

To get a sense of your estimated payments for Social Security, visit the Social Security Administration’s Retirement Estimator.

→ Investment Assumptions Around Assets Needed to Retire on $500k

tax advantaged investment accounts

When you’re thinking about how long you’ll need money in your retirement, you’ll need to consider the investment assumptions around the assets you’ll have when retiring.

Some good rules of thumb for the investment assumptions needed for retiring on $500k, consider the following items:

  • Investing in a diversified portfolio of 60% stock investments and 40% bond fund investments
  • Using more conservative historical returns, also accounting for potential economic uncertainties ahead
  • Expect to earn 5-7% on this portfolio with a rough 8% per year average in stocks and 4% in bonds- be cautious of overly aggressive return projections and also know that these are annual averages
  • Given the lower level of retirement assets and the early retirement without access to Social Security benefits at 60, I suggest being overly conservative with your return assumptions on a portfolio like this

If you decide to retire at 60 with $500k in assets, you’ll need to create a budget for what you think your expenses will be in retirement. As a going in assumption, most people spend about 80% of their current expenses while working.

This assumes you have paid off your house and enter retirement with no major debt and relies largely on expenses related to insurance, utilities, food, housing upkeep and maintenance and other lifestyle expenses sized to your budget.

If you have several income sources providing you a steady amount of cash flow, you’ll need less reliance on your invested assets now.

This could allow you to grow this balance in a portfolio more exposed to stocks to give your investments more time to grow.

If you hold a diversified portfolio of stocks for multiple years, you’ll likely see these appreciating assets continue to rise and represent more spending potential down the road.

On the other hand, if you need to draw on your portfolio from day one, you’ll want a portfolio with a heavy allocation to fixed income securities so you won’t need to liquidate your portfolio.

These will pay you interest and dividends to supplement your existing cash reserves and other income sources.

If you’ve invested conservatively over time—like 50% stocks/50% bonds—you’ll likely need more money to retire comfortably at 60 years old.

Though, that depends on continued investment performance, market interest rates, your lifestyle, location and cash needs. Vanguard has built model portfolios with historical performance by risk level.

As you can see, conservative portfolios have performed fairly well in the last 100 years, though that’s largely because of the nearly uninterrupted bull market in bonds since the 1980s when rates peaked.

Now, rates have never been lower and bond prices higher. They more inversely, meaning as yields drop, prices rise and vice versa.

If we believe in returns reverting to their means (and the notion that bond yields can’t go any lower than the floor), bond yields will likely climb and bond prices fall.

This is good if you have a low allocation to bonds now because your portfolio won’t suffer from a bond market rout and you’ll also be able to buy bonds at better yields to support your income needs.

The opportunity to transition into more bond fund holdings might be coming soon enough as interest rates normalize and yield returns to the markets.

Finally, if you’ve invested in riskier assets like stocks and have developed a level of risk tolerance that allows great investment returns over time, you might be able to retire comfortably with $500k and let that money ride in the market.

How Much Do I Need to Retire at 60 Comfortably?

The following walks through the various strategies you can use to retire at 60 comfortably, though you might consider delaying until you can receive your full entitlement benefits from several federal programs established to help retirees.

→ Slash Your Living Expenses, Pay Off All Debt

savings account

When thinking about retirement, you’ve got to project a lot of things into the future, often decades. Fortunately, you’ve developed a sense of your financial needs to this point in life, know what your lifestyle affords and how you can handle money.

Retirement experts use a conservative estimation to determine how much money you’ll need in retirement. The number people often cite for your expenses comes to roughly 80% of what you need while working.

That can be a big number to manage on your own so it’s often worth considering what you should do for the remainder of your life if you have less than $500k or $600k in savings and investments when retiring.

One way to make the number more manageable is to slash your living expenses where possible. This means:

  • right-sizing your budget
  • making big purchases before retiring that you won’t eat into your retirement nest egg
  • looking into ways to reduce what you own and need
  • practicing minimalism to clear your house of unneeded possessions and reducing your future needs

Another strategy involves paying off all debt before entering retirement. This sheds the unshakeable overhead of debt payments.

Debt represents a double-edged sword. First, it enabled you to buy something in a moment of need you couldn’t have otherwise afforded it. You did this by pulling your spending power forward and agreeing to repay it (with interest!) over a future period of time.

Therefore, think of retirement as your future asking you to repay your debt now. It doesn’t want you to get in over your head with debt and transition to a fixed income on a finite amount of assets.

Effectively, your future is telling you that there’s nothing to borrow against without hurting yourself.

If you can’t afford to retire because you’ve got too much spending overhang (i.e., debt), you might need to find alternative means to work longer or cut the debt quicker.

→ Consider Moving to a Low-Cost-of-Living Area

Another option to shed expenses and the overall bloat of a budget is move to a lower-cost-of-living area. This allows you to live more cheaply and unlock any savings you’ve accumulated in a home or assets you no longer need in your current location.

Relocating to save money on expenses and cost-of-living is called “geoarbitraging” in current parlance. This is the practice of taking advantage of a different place with less expensive cost-of-living to better stretch your dollars.

As an example, if you live in the San Francisco Bay Area and are now retired or working part time for financial reasons, consider moving somewhere like Arizona where the cost of living is less than half as much.

It just so happens that many retirees choose this option because it can provide significant savings on expenses while also making new friends more easily in a lower-cost region.

If you have accumulated wealth by selling assets at the right time and/or saving throughout your lifetime then these moves might not be necessary for creating enough income through retirement.

You may even decide to retire in a high-cost region like California, though it will take more time and savings to get there. It all depends on your lifestyle, savings and income streams.

→ Consider Finding Part-Time Employment

Retirement might not be a full-time decision. In some instances, you might consider supplementing your retirement income by getting a side gig or other income to pad your retirement savings for longer.

This can avoid drawing down your balance and adding extra time for your funds to appreciate in value and develop greater income potential down the road.

Working part-time also keeps you active, socially engaged and more financially flexible. This keeps you attached to the labor force for longer and more able to afford delaying Social Security until full retirement age.

This can also be an opportunity to change your line of work into something more ideally suited to your interests. You might have had a dependable income at a job you’ve soured on as time went by or grown tired of from years of experience and not being challenged.

Think of part-time work in retirement as a way to earn money doing something completely different.

Another advantage of part-time work in retirement is you will never lose any time with your family. You can always take the grandkids to school, have dinner together, spend quality time and enjoy life more easily without the hard and fast commitments of a full-time job.

→ Consider Consulting or Freelancing

start up

Likewise, you might see retirement as a second act to sell your services to the highest bidder. Your years of experience would prove valuable to many employers looking to hire someone seasoned in their line of work and not in need of training.

Because you’ve got the chops to be an authority in your industry, you can command top dollar for your knowledge and expertise. This keeps your skills relevant and gives you the option of remaining attached to the workforce for earning extra money.

You might also lean into a different career path closely related to your previous line of work.

For example, if you worked in accounting for 30+ years, you might think about translating this experience into becoming a financial content writer for large online publishers or a local newspaper.

→ Wait Longer to Draw Social Security

The most dependable strategy is to continue working as long as your health and lifestyle permit so you can draw your full Social Security benefit in retirement.

These higher payouts will enable you to live easier and with less financial concern. By waiting to claim your Social Security benefits each year, you stand to earn an additional ~8%. So, that means the longer you can wait, the better off financially you’ll be.

That said, if you want to retire on a lower payout, you still can but may need to winnow down your expenses in the first years of retirement to allow for your assets to grow relatively untouched.

These few years of growth could lead to a lot more financial stability in retirement. You may also have a spouse able to support you if they’re younger and still inclined to work for a while longer.

→ Wait Until Medicare Eligible and Possibly Full Social Security Payout

Closely related to waiting for Social Security is the possibility of waiting until you’re Medicare eligible. Healthcare expenses can run high just before Medicare eligibility.

Most full-time positions allow you access to healthcare benefits or at least the income you’d need to pay for a policy you can buy on

In either circumstance, having extra money coming in can cover your healthcare expenses until you reach Medicare eligibility and have a higher Social Security payout.

How Long Will $500,000 Last in Retirement?

Retirement is a tricky subject to nail down since it involves more than just spending habits and how much one has saved for retirement. It also entails thinking about your goals for retirement and the lifestyle you want to live.

Therefore, to understand how long $500,000 will last in retirement, you need to think through some of the possible scenarios for withdrawing your money from savings to support your retirement money needs.

→ 4% Safe Withdrawal Rate

reviewing investment returns medium

The 4% withdrawal rate has long stood as the golden rule for how much you can safely withdraw from your portfolio each year and remain financially secure during retirement.

The 4% rule relies on a diversified investment portfolio split between 60% stocks and 40% bonds. This also assumes you keep your spending flat during retirement without adjustments for inflation or other cost of living increases or decreases.

Remember, few things remain absolutely static in life. The only certainty in life is change as the old adage goes. If you think these constant returns and spending fits your portfolio and needs, the 4% rule might work for you.

The rule relies on this diversified portfolio to provide continued capital appreciation as well as income to support your spending needs.

The portfolio has averaged a return of 6.4% per year since 1929, meaning withdrawing 4% per year shouldn’t deplete your funds. Rather, it should only take away from your returns and leave the principal largely untouched.

One thing to know about average annual returns, however, is that the average year rarely happens. In fact, you’re more likely to have boom and bust years follow one after another.

Therefore, timing your withdrawals becomes a forecasting practice, something fraught with incredible amounts of risk. It’s probably not advised to step up your withdrawal rate during a recession to keep your spending constant as is called for by the rule.

However, in abstraction, the concept works well for many as it’s an easy rule to follow, though it might not always meet the mark for your financial needs.

Further, it strongly relies on historical market performance going forward, something we might not necessarily experience as past results can’t necessarily predict future returns.

You shouldn’t blindly follow this rule without consideration for your situation. Lean on it blindly and you could prematurely end up running out of money.

Likewise, you could end up withdrawing too little and land yourself in a huge surplus of cash you never spend, foregoing experiences in retirement you ought to have done.

Instead, you might consider a variable withdrawal rate and build flexibility into your budget.

→ Variable Withdrawal Rate to Maintain Steady Income

The best investment choice is to build flexibility into your portfolio. This allows for you to change tack, pivot on your investment goals and ultimately weather financial storms.

This means you need a diversified portfolio capable of handling volatility and a mindset that you need to persevere and roll with the punches or avoid getting caught up with the stress of the market altogether.

Part of this means having a variable need for drawing from your portfolio during retirement. You might need to step up withdrawals to account for greater financial needs or even ease up after seeing your expenses fall unexpectedly in retirement.

Maintaining a variable withdrawal rate can maintain steady income for yourself and provide you the ammunition needed to make it through financial transition.

→ Retirement Income Projections

Now, let’s walk through a series of retirement income projections to understand with modeled numbers how you might fare in retirement under different assumptions.

Scenario 1 – Retire at 60 with $500k in assets

retire at 60 with 500k retirement analysis

  • Retirement Age: 60
  • Expected Lifespan: 90 years
  • Marital Status: Single
  • Net Worth at Retirement: $500,000
  • Retirement Date: February 10, 2021
  • Assumed Annual Return on Retirement Portfolio: 6.49%
  • Year Commencing Social Security: Full Retirement Age (67)
  • Peak Earning Year Pre-Retirement: $50,000
  • Annual Expenses Pre-Retirement: $40,000
  • Retirement Income in Year 1: $0
  • Portfolio Withdrawals in Year 1: $32,080
  • Annual Expenses in Retirement: $30,000, inflated at 2% per year
  • Net Worth at End of Year 1: $496,558
  • Net Worth at Death (90): $605,654

Review the table below to see how this retirement scenario progresses every year from age 60 until expected death at 90.

Retire at 60 with $500k

Year Age Social Security Income Req’d. Min. Distributions Total Inflows Living Expenses Other Expenses Total Outflows Net Cash Flow Total Portfolio Assets
2021 60 $0 $0 $0 $27,500 $4,580 $32,020 ($32,080) $496,558
2022 61 0 0 0 30,600 5,121 35,721 (35,721) 491,820
2023 62 0 0 0 31,212 5,223 36,435 (36,435) 486,035
2024 63 0 0 0 31,836 5,328 37,164 (37,164) 479,121
2025 64 0 0 0 32,473 5,436 37,909 (37,909) 470,987
2026 65 0 0 0 33,122 6,471 39,593 (39,593) 460,583
2027 66 0 0 0 33,784 6,600 40,384 (40,384) 448,685
2028 67 19,218 0 19,218 34,460 2,535 36,995 (17,777) 459,409
2029 68 21,384 0 21,384 35,149 2,197 37,346 (15,962) 472,707
2030 69 21,812 0 21,812 35,852 2,243 38,095 (16,283) 486,536
2031 70 22,248 0 22,248 36,569 2,286 38,855 (16,607) 500,927
2032 71 22,693 0 22,693 37,300 2,332 39,632 (16,939) 515,908
2033 72 23,147 18,829 41,976 38,046 3,930 41,976 0 529,905
2034 73 23,610 19,996 43,606 38,807 4,799 43,606 0 543,604
2035 74 24,082 21,318 45,400 39,583 5,817 45,400 0 556,824
2036 75 24,564 22,635 47,199 40,375 6,824 47,199 0 569,539
2037 76 25,055 24,031 49,086 41,183 7,903 49,086 0 581,634
2038 77 25,556 25,399 50,955 42,007 8,948 50,955 0 593,099
2039 78 26,067 26,959 53,026 42,847 10,179 53,026 0 603,693
2040 79 26,588 28,611 55,199 43,704 11,495 55,199 0 613,266
2041 80 27,120 30,360 57,480 44,578 12,902 57,480 0 621,650
2042 81 27,662 32,044 59,706 45,470 14,2236 59,706 0 628,835
2043 82 28,215 33,991 62,206 46,379 15,827 62,206 0 634,472
2044 83 28,779 35,846 64,625 47,307 17,318 64,625 0 638,555
2045 84 29,355 38,009 67,364 48,253 19,111 67,364 0 640,665
2046 85 29,942 40,042 69,984 49,218 20,766 69,984 0 640,808
2047 86 30,541 42,158 72,699 50,202 22,497 72,699 0 638,770
2048 87 31,152 44,359 75,511 51,206 24,305 75,511 0 634,770
2049 88 31,775 46,301 78,076 52,230 25,846 78,076 0 627,578
2050 89 32,411 48,649 81,060 53,275 27,785 81,060 0 617,965
2051 90 33,059 50,653 83,712 54,341 29,371 83,712 0 605,654


Scenario 2 – Retire at 62 with $500k in assets

retire at 62 with 500k retirement analysis

  • Retirement Age: 62
  • Expected Lifespan: 90 years
  • Marital Status: Single
  • Net Worth at Retirement: $573,326 (two extra years of saving and growth)
  • Retirement Date: February 10, 2023
  • Assumed Annual Return on Retirement Portfolio: 6.49%
  • Year Commencing Social Security: Full Retirement Age (67)
  • Peak Earning Year Pre-Retirement: $50,000
  • Annual Expenses Pre-Retirement: $40,000
  • Retirement Income in Year 1: $0
  • Portfolio Withdrawals in Year 1: $32,080
  • Annual Expenses in Retirement: $30,000, inflated at 2% per year
  • Net Worth at End of Year 1: $580,957
  • Net Worth at Death (90): $816,574

Review the table below to see how this retirement scenario progresses every year from age 62 until expected death at 90.

Retire at 62 with $500k

Year Age Social Security Income Req’d. Min. Distributions Total Inflows Living Expenses Other Expenses Total Outflows Net Cash Flow Total Portfolio Assets
2023 62 $0 $0 $4,335 (1 mo. wages) $28,611 $4,697 $33,308 ($28,973) $580,957
2024 63 0 0 0 31,836 5,328 37,164 (37,164) 580,203
2025 64 0 0 0 32,473 5,436 37,909 (37,909) 578,629
2026 65 0 0 0 33,122 6,471 39,593 (39,593) 575,211
2027 66 0 0 0 33,784 6,600 40,384 (40,384) 570,752
2028 67 20,786 0 20,786 34,460 2,193 36,653 (15,867) 591,375
2029 68 23,130 0 23,130 35,149 1,820 36,969 (13,839) 615,434
2030 69 23,593 0 23,593 35,852 1,858 37,710 (14,117) 640,767
2031 70 24,065 0 24,065 36,569 1,894 38,463 (14,398) 667,454
2032 71 24,546 0 24,546 37,300 1,932 39,232 (14,686) 695,575
2033 72 25,037 25,386 50,423 38,046 12,377 50,423 0 714,448
2034 73 25,538 26,960 52,498 38,807 13,691 52,498 0 732,917
2035 74 26,049 28,742 54,791 39,583 15,208 54,791 0 750,740
2036 75 26,570 30,518 57,088 40,375 16,713 57,088 0 767,882
2037 76 27,101 32,400 59,501 41,183 18,318 59,501 0 784,190
2038 77 27,643 34,244 61,887 42,007 19,880 61,887 0 799,648
2039 78 28,196 36,348 64,544 42,847 21,697 64,544 0 813,931
2040 79 28,760 38,575 67,335 43,704 23,631 67,335 0 826,837
2041 80 29,335 40,933 70,268 44,578 25,690 70,268 0 838,141
2042 81 29,922 43,203 73,125 45,470 27,655 73,125 0 847,829
2043 82 30,520 45,829 76,349 46,379 29,970 76,349 0 855,428
2044 83 31,130 48,329 79,459 47,307 32,152 79,459 0 860,933
2045 84 31,753 51,246 82,999 48,253 34,746 82,999 0 863,778
2046 85 32,388 53,986 86,374 49,218 37,156 86,374 0 863,971
2047 86 33,036 56,840 89,876 50,202 39,674 89,876 0 861,224
2048 87 33,697 59,807 93,504 51,206 42,298 93,504 0 855,228
2049 88 34,371 62,425 96,796 52,230 44,566 96,796 0 846,134
2050 89 35,058 65,592 100,650 53,275 47,375 100,650 0 833,172
2051 90 35,759 68,293 104,052 54,341 49,711 104,052 0 816,574


→ Monte Carlo Simulation of Rates of Return and How Long Money Will Last

A Monte Carlo Simulation illustrates the potential results of your financial plan over thousands of times of randomly generated market returns and volatility called trial runs.

In each trial run, the mean and standard deviation of a selected benchmark index for each account or portfolio is used for a randomly chosen year.

This hypothetical investment performance combines with the detailed cash flow and tax calculations for your plan. The trial runs produce a range of potential results and are one way of illustrating and evaluating the statistical probability of your planning strategies.

Under the scenarios above, these numbers land on significantly high likelihoods of maintaining enough funds in retirement to cover your expected living expenses.

Of note, this analysis doesn’t consider one-off events, costs increasing above the rate of inflation (2%), nor other costs adding to your annual living expenses later in life.

Specifically, this doesn’t count added healthcare expenses, additional assistance nor other expenses categories which tend to accrue as we age.

Both strategies rely on saving money in a diversified portfolio and having smooth average expected returns each year. They also require waiting until full retirement age to claim Social Security.

The payments from Social Security amount to nearly twice the income you draw from your retirement portfolio over the 28 years of expected retirement.

This underscores the importance of waiting as long as possible to claim Social Security. Each additional year you wait between 62 and 67 adds a guaranteed annual average of around 8% higher payments for life, something your portfolio can’t go because your returns follow market movements.

You can also use financial products like annuities to remove all risk from your investment portfolio. If you have interest in learning about annuities, consider speaking to a financial advisor.

How to Retire Forever on a Fixed Chunk of Money

Retiring forever should always be the goal. No one wants to work only to retire and then need to return to the workforce.

Avoiding this situation requires carefully planning your retirement strategy, saving money diligently over your career with low-cost or free investing apps and platforms and right-sizing your expenses to your budget.

If you can accomplish these goals over time, you can learn to live like no one else by living like no one else.

→ Safe Withdrawal Rate

evaluating investments

It’s often said money can’t buy happiness, but it can buy stability and predictability with your financial picture. This means having security knowing you can safely withdraw money from your retirement without fear of running out of funds.

Consider your withdrawal rate and possibly employ tactics like the 4% rule or even the variable withdrawal rate. The safe withdrawal rate that meets your needs might also include one from The Center for Retirement Research at Boston College.

It has developed a system which they say will assist you in establishing a safe withdrawal rate.

They pin their safe withdrawal rate on the IRS required minimum distribution (RMDs) tables. These are the amounts you must begin withdrawing from traditional retirement accounts by age 72 annually unless you’re still working.

There’s also a stipulation that you need not RMDs if you own more than 5% of the company you work for because this could be a financially-compromising action taken on the business should you be forced to liquidate.

Assuming you don’t meet that criteria, you take your account balance held in traditional retirement assets and divide that by the period next to your age found in this IRS table.

If you begin taking annual withdrawals (or converted into monthly withdrawals) beginning at age 65, you can safely withdraw between 3-3.15% of your retirement savings until age 100. At that point, you can withdraw 15.67%.

However, like the 4% withdrawal rate espoused by many your mileage may vary depending on your lifestyle and market performance.

When Should I Retire?

researching financial information medium

This is the most important question to answer.

It’s also the hardest to answer.

The point is that it’ll vary based on your preferences, lifestyle and comfort with leaving the workforce. Therefore, you should do what feels right for you.

A common rule of thumb suggests age 67 as an appropriate retirement date because full Social Security benefits start around this time while Medicare eligibility starts at 65. That means no premiums are assessed on Medicare Part A.

Though, as laid out above, you might have enough saved at 60 to leave the workforce with confidence knowing you’ve saved an adequate amount to retire.

Are You Prepared for Retirement?

Undoubtedly, life after the workplace presents a new set of financial challenges for you to navigate. When it comes to retirement planning, it might no longer be enough to simply think about saving enough money in your retirement accounts.

You’ll want to consider a number of facts like:

  • Taking distributions from your retirement savings at the appropriate time
  • Living longer because of continued good health and improvements in medicine and overall medical care
  • Experiencing the rising cost of healthcare and inflation

If you seek a guaranteed financial return on your investment portfolio and hope to avoid any income gaps, you might consider learning more about annuities.

One of the more talked about annuities is a variable annuity with add-on living benefits.

Annuities like this can offer a Lifetime Check unaffected by interest rate fluctuations and market downturns with checks coming monthly, quarterly or annually, so you can receive income for the rest of your life through their annuity.

This means that you would receive guaranteed payments with no risk to funds being lost outside the policy you purchase.

Further, your Lifetime Check amount might even keep growing through add-on living benefits which allow you to grow and take income, as well as leave a legacy.

The examples and discussion in this article illustrate that there are many factors involved when determining how much retirement savings someone needs to retire. Is $500,000 that number for you? $600,000? Only you know.

The most pressing question to ask after “When should I retire?” is: “What does retirement mean to me?”

If you don’t like your job, maybe it’s time to find one that suits you better. Or, instead, if you are near age 55 and plan to have $500,000 saved as retirement funds, retiring at 60 is a possibility.

Sometimes making the decision on whether to retire at age 60 depends on the tradeoffs you face.

If retirement means choosing to live only on money you’ve invested for yourself and then collecting Social Security benefits, you’ll need a larger investment portfolio than you would working part-time or freelancing and living in a cheap location.

Regardless of your decision, you can know the numbers support your ability to retire at 60 with $500k in assets. However, if you feel that you might experience an income gap, consider pursuing a variable annuity to stabilize your retirement income.


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