Can you retire on $300k? [Updated April 2024] (2024)

If you’ve managed to save $300k successfully, there’s a good chance you’ll be able to retire comfortably, though you will have to make some compromises and consider your plans carefully if you want to make that your final figure.

You should consider:

  • Your planned retirement age –How will this stretch your $300k? Will it be possible to align with the4% rule? Have you built any flexibility into this age in case something happens that you didn’t plan or contend for?

  • Your planned retirement lifestyle –Will any costly elements of your life as a retiree eat into your $300,000? Or will you live more relaxed, calm and moderately during your golden years?

  • Your other sources of income –Will you receive additional benefits to boost your total figure, such as gifted support from a family member or Social Security payments? Have you remembered to factor these things in?

  • The cost of living in your intended retirement location –From place to place, the cost of living can change a lot.Some statesprovide retirees with financial incentives and tax breaks, while others do not.

How long will $300k last in retirement?

Let's say your annual retirement spending is $20,000, equivalent to $1,666 monthly. In this scenario, $300,000 can last for roughly 26 years.

The length of time that you can make $300,000 last as a retiree is best determined by looking at your intended retirement lifestyle and likely monthly and annual outgoings.

Assuming an average annual return of 6% before taxes and a 22%federal marginal tax rate, the table below offers a detailed breakdown of how long $300k can last across various annual spending scenarios:

Annual spendingYears it will lastTotal interestTotal withdrawalTotal taxes
$20,00026$279,980$518,385$61,598
$40,00010$90,035$370,227$19,808
$60,0006$54,397$342,429$11,966
$80,0004$39,133$330,523$8,609

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Can you retire with $300k and Social Security?

As mentioned, if you have $300,000 in savings, you are likely in a comfortable position for retirement if you plan appropriately. Adding Social Security benefits here can only help bolster your retirement income and make retiring on $300k even more accessible.

According to theUS Government, in 2023, the average monthly Social Security benefit for retired workers was $1,905. However, the amount received varies from person to person.

It’s important to note that while you can retire at any age, your full benefits only become available once you reach “full retirement age.”

For those born during or after 1960, this is 67. You can start receiving Social Security retirement benefits as early as 62. However, these will be reduced.

How much tax you pay on Social Security benefits will depend on your home state, with some states opting not to tax the benefit whatsoever.

How much money do you need to retire?

Financial advisors often recommend having savings equivalent to 10-12 times your current income by the time you retire, providing a reasonable level of confidence in your financial security.

However, this varies depending on how much you intend to spend.

Let's say you want to retire at 60 with a life expectancy of 85; you'll need to cover 25 years. To guarantee $20,000 yearly ($1,666 monthly) over 25 years, you'll need roughly $327,403 in retirement savings.

Consideringan average annual return of 6% before taxesand the Federal Reserve’s 2% inflation target, the table below provides a breakdown of the initial savings required, as well as the total interest earned for various spending scenarios.

Annual spendingRequired initial savingsYears coveredTotal interest
$20,000$327,40325$313,203
$40,000$654,80625$626,406
$60,000$982,20825$939,610
$80,000$1,309,61125$1,252,813

It's important to note that individual financial circ*mstances can vary significantly, making answering the question "How much money do I need to retire" a bit difficult. Factors like healthcare costs, inflation, and unexpected expenses play crucial roles in long-term financial planning.

If you want some guidance on how to plan for your financial future, talking to an expert is your best bet. At Unbiased, we connect people with expert, trusted financial advisors to help them plan for retirement. Find yourbest financial advisorand get afree first consultation here.

Can I retire at 50 with $300k?

Most of us have, at one time or another, considered retiring early. But is it viable for you to retire at 50 on $300,000? The answer depends on how much you’d be comfortable receiving as a monthly income.

Let’s walk through the scenario.

With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.

Though $714 might be enough for some, it won’t make ends meet for others.

If you’re doing the math based on your unique circ*mstances, don’t forget to factor in:

  • Any other retirement income you haven’t yet added to the total.

  • Any plans you have to invest, replenish and grow your $300k during retirement.

  • Any significant expenses that would impact the viability of living on $714 per month.

What are the income taxes applicable to retirees with $300k?

Retirement income taxes on $300k aren’t massively high, especially if you’re spreading distributions of that money across 20–25 years or more.

Without adding complexities like inflation and the fluctuating money market into the mix, $300,000 over 25 years of payments equates to $12,000 a year. This would put you in the second-lowest federal income tax bracket, meaning you’d be charged a marginal tax rate of 12%. You also need to account for:

  1. Other sources of income, such as Social Security, 85% of which could be taxed depending on your overall income and filing status.

  2. How you’re receiving your retirement income, be it apre-tax 401(k)or an after-tax Roth IRA.

  3. The state-level income taxes apply where you live. This will vary depending on where you live.

What is the average retirement saving among working-age Americans?

A study from Northwestern Mutual found that the average amount held in a retirement account is just $88,400.

However, the same study found that the typical worker believes they need $1.46 million to retire comfortably, resulting in a savings gap of $1.37 million for the average American.

While it’s clear that most Americans don’t have enough saved for retirement, it’s worth noting that the average savings amount will differ from source to source, primarily due to the following three factors:

  1. The age of the data and the impact, noted or unnoted, of the COVID-19 pandemic and high inflation rates.

  2. Whether the data pool includes all Americans or solely Americans who have retirement savings in the first place,Federal Reserve dataregarding household economics tells us that around 60 million working-age Americans either have nothing saved for retirement or aren’t keeping track of this figure.

  3. Whether the data pool gives an average across all ages or narrows things down by age group, it accounts for the fact that people save more for retirement as they get closer to retirement age.

Four tips for increasing your savings

There’s every chance you’d like to keep growing and increasing your retirement savings pot.

You may even think of aspects of retirement planning you hadn’t yet considered, and you may now have to re-adjust accordingly. If you’re in that position, wondering how to increase your savings, here are four tips to consider:

  1. Make room for better budgeting –If you can, improve how you save and spend each month, now’s the time to commit to those adjustments.

  2. Speak with a financial advisor –Even when you think you’ve exhausted all possibilities, an advisor can usually introduce you to new routes to financial success.You can find a qualified, SEC-regulated financial advisor here.

  3. Seek out the right places for your savings –Don’t leave your retirement savings pot sitting in a low-interest account. Get the most out of your money.

  4. Invest spare cash with an eye on the future –Avoid spending what’s left over at the month’s end on unnecessary short-term enjoyment. Invest, instead.

Get expert retirement advice

You're already in a good position if you’re putting $300k towards your retirement. If you have some time to further increase this amount between now and your later years of rest and relaxation, you’re in an even better position. You can do much to raise that $300,000 figure, even in a year or two.

For some advice on how to do just that or any other aspect of retirement planning that you might need help with, anexperienced financial advisoris well-placed to assist. Matching with a financial advisor perfectly suited to meet your needs is just a few clicks away.Get started here.

Frequently asked questions

Can you retire on $300k? [Updated April 2024] (2024)

FAQs

Is $300,000 enough to retire on? ›

With $300,000 planned for your use as a retiree, a retirement age of 50, and an anticipated life expectancy of 85 years, you need that money to last you 35 years. This should mean that your yearly income is around $8,571, and your monthly payment is around $714.

What is the average 401k balance for a 65 year old? ›

$232,710

How much will the average millennial need to retire? ›

One recent report, from Northwestern Mutual, found that millennials believe they will need $1.65 million to retire comfortably. To date, however, millennials have amassed only $62,600 in average retirement savings. That leaves a retirement “gap” of more than $1.5 million.

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.

How long will 300k last me in retirement? ›

It depends on economic conditions and how much you withdraw each year. If you plan to take 4% or less from the portfolio annually, there's a decent chance the assets could last at least 30 years. That's roughly $12,000 per year. However, things might go better or worse for you.

What is the ideal amount of money to retire with? ›

By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.

How much should I have in my 401k to retire at 67? ›

Based on those assumptions, we estimate that saving 10x (times) your preretirement income by age 67, together with other steps, should help ensure that you have enough income to maintain your current lifestyle in retirement. That 10x goal may seem ambitious. But you have many years to get there.

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.

What is a good retirement balance by age? ›

By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary.

How much will I need to retire in 2024? ›

News Releases
2024AllHNW ($1M+)
Amount expected to need to retire comfortably$1.46M$3.93M
Apr 2, 2024

How much do most people retire with? ›

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. Taken on their own, those numbers aren't incredibly helpful. After all, not everyone who is the same age will retire at the same time.

What age will Gen Z retire? ›

Six in 10 Gen Zers say they plan on retiring at age 65 or younger, 10 points higher than the general population. This gap is due to more Gen Zers wanting to retire by age 60: 35% of Gen Zers say they expect to retire by age 60, compared with 26% of the general population.

Is $300 000 good for retirement? ›

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. By age 55 the median American household has about $120,000 saved for retirement, and about $212,500 in net worth.

How long will $400,000 last in 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. This comes to about $28,800 per year in guaranteed income according to one estimate.

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.

What is a comfortable retirement income? ›

The definition of a comfortable retirement differs from person to person and depends on things like the number of holidays you plan to take each year. However, some experts have suggested you could maintain a comfortable lifestyle with a pension income between half and two thirds of your final working salary.

Can I retire at 55 with 300k? ›

Can I retire at 55 with £300k? On average for a comfortable retirement, an individual will spend £43,100 a year, whilst the average couple in retirement spends £59,000 a year. This means if you retire at 55 with £300k, an individual will run out of funds in approximately 7 years, and a couple in 5 years.

Is $3,000,000 enough to retire at 65? ›

$3 million should be more than enough to fund your retirement, even if you choose to retire early. A number of factors are at play when determining how long $3 million will last, including your investment strategy and retirement lifestyle.

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.

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