Surviving with $600,000 in savings after taking retirement is possible with careful planning, but it’s essential to analyze how long the money will last. Comfortable retirement life with only $600,000 depends upon a number of factors, including desired retirement age, estimated retirement budget, expected longevity, and total savings and income.
Earlier the retirement, the longer the retirement savings have to last, especially if one possesses a longer life expectancy. And the type of lifestyle one adapts to can affect how long $600,000 will go in retirement. External factors such as inflation and market volatility can also adversely affect overall retirement outcomes. Health is also something very important and plays an important role as healthcare expenses tend to increase with age.
Is 62 Years a Suitable Age to Retire with $600,000?
Yes, maybe! If one is planning to take retirement at the age of 62 and have $600,000 in his saving, he will be able to live in his retirement only if he is ready to downsize his house, live a minimalist lifestyle, and supplement his retirement savings with a pension plan, annuity or Social Security benefits.
Otherwise, retiring at the age of 62 with only $600,000 doesn’t seem to be realistic if he plans to spend on luxuries and does not owe other alternative sources of income. Although there are some social security benefits available that provide some income, consuming those benefits at 62 will minimize the amount to receive. One needs to wait until the full retirement age, which is typically 66 or 67, to get the full benefit amount. And can further be increased, if not taken until age 70 or more.
It is also essential to analyze overall health and how that can affect retirement plans. If a person is healthy and does not require long-term care, then $600,000 might be sufficient to sustain him in retirement. On the other hand, if the person needs long-term care in a nursing facility, that could consume a huge amount of his savings.
What to Do to Retire with $600,000?
If a person is seeking to retire with $600,000 in savings, early planning is most important. He needs to decide at what age he will take retirement, what kind of lifestyle he desires to have in retirement life, and what his total savings and income will be. Including planning for future income requirements for his spouse and children if he has a family.
The earlier one begins to save, the easier it will be to reach the $600,000 goal. So if a person has a 401(k) at work, for example, he may want to concentrate on maxing that account out first. At the very least, it is important to save sufficient to qualify for the full employer match if there is one. If he does not have a 401(k), he can save in any other Individual Retirement Account.
A person should also consider creating another source of income for himself with an annuity. An annuity is an insurance contract in which premiums are paid in exchange for receiving payments back later. There are several different types of annuity products available in the market to choose from and they all can create guaranteed income. These benefits can be transferred to the spouse or the kids after death.
Some Retirement Planning Tips for You
Appoint a financial advisor to seek guidance about which savings accounts to choose and in which annuity to invest to maximize the benefits. Also, the advisor will assist with some strategies through which it will be easier to make a retirement plan and implement a retirement budget.
Use SmartAsset’s no-cost retirement calculator, or any other authentic financial support application to gauge the progress of savings and other sources of income.
Moreover, a taxable brokerage account should also be considered, in addition to tax-advantaged accounts, such as a 401(k) or IRA. A brokerage account can provide more flexibility in terms of the types of securities that can be traded. This will result in more diversification and give a person an additional source of savings.
Besides these, retirement life should be simple, avoiding any excessive spending and luxuries so that more money can be kept aside for any unexpected financial burdens, which can take away a big bite of savings in one go and collapse all retirement plans.