It is 100% possible to retire with $400,000, provided you're not looking to enjoy a particularly expensive retirement lifestyle or hoping to leave the workforce notably early. Here's an example scenario: You plan to retire at 60, just one year earlier than the average age, according to Gallup data.
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.
The suggested savings guidelines say you need about ten times your annual salary in savings as you reach your full retirement age. The median salary of a 65-year-old is $54,000 per year — which means you'd need approximately $540,000 saved if you want to retire at 65.
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 much does a $400,000 annuity pay per month? As of January 2025, with a $400,000 annuity, you'll get an immediate payment of $2,400 monthly starting at age 60, $2,643 monthly at age 65, or $2,850 per month at age 70.
If you use the classic 4% rule to manage your retirement savings, with a $500,000 balance, you're looking at about $20,000 per year in income. But that's probably not your only income source available. Chances are, you're eligible for Social Security at the very least.
According to the Social Security Administration, or SSA, the monthly retirement benefit for Social Security recipients is currently $1,783.55 in 2024 on average. Several factors can drag that average up or down, but you have the most control over the biggest variable of all — the age that you decide to cash in.
The ideal monthly retirement income for a couple differs for everyone. It depends on your personal preferences, past accomplishments, and retirement plans. Some valuable perspective can be found in the 2022 US Census Bureau's median income for couples 65 and over: $76,490 annually or about $6,374 monthly.
However, a popular approach is to invest in stocks and other growth assets while saving up, then convert your portfolio into an annuity upon retirement. With $400,000, if you buy an annuity at age 62 and then retire, you might expect monthly payments of around $2,400 for the rest of your life.
The magic number that most Gen Xers feel they need to retire is $1.56 million. This is much higher than the average amount they have saved — $108,600 — and higher than most Americans feel they will need. In short, Gen X retirement is in trouble.
Safe Withdrawal Rate
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.
The $1,000 per month rule is designed to help you estimate the amount of savings required to generate a steady monthly income during retirement. According to this rule, for every $240,000 you save, you can withdraw $1,000 per month if you stick to a 5% annual withdrawal rate.
The findings are mixed. Most research shows that delayed retirement helps reduce mortality. A couple of studies show no relationship, and still others show that delayed retirement is detrimental or that early retirement is beneficial.
The above chart shows that U.S. residents under 35 have an average of $49,130 in retirement savings; those 35 to 44 have an average $141,520; those 45 to 54 have an average $313,220; those 55 to 64 have an average $537,560; those 65 to 74 have an average $609,230; and those 75 or older have an average $462,410.
Just 16% of retirees say they have more than $1 million saved, including all personal savings and assets, according to the recent CNBC Your Money retirement survey conducted with SurveyMonkey. In fact, among those currently saving for retirement, 57% say the amount they're hoping to save is less than $1 million.
If your spouse dies, do you get both Social Security benefits? You cannot claim your deceased spouse's benefits in addition to your own retirement benefits. Social Security only will pay one—survivor or retirement. If you qualify for both survivor and retirement benefits, you will receive whichever amount is higher.
Those facing financial emergencies, such as a layoff or debt, may benefit from accessing Social Security early. If you retire early and need extra income, Social Security benefits can provide supplemental funds to support your new lifestyle, hobbies or retirement activities.
What are the average and median retirement savings? The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000.
A “nest egg” generally refers to retirement savings that you typically don't touch until you retire. It's the money you save for the future so that you have something to fall back on when you retire.
Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $30,000 and below 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.