Income
Saving up $300k can be significant work, and it’s certainly something to be proud of. It’s enough to buy a modest home in certain areas of the country, and you can make a low-risk investment with it and earn substantial interest. But if you’re asking if you can retire on 300 thousand dollars, you might be in for a challenge.
Stephanie Faris
Published April 19th, 2022
Stephanie Faris
•
Published April 19th, 2022
Table of Contents
Key Takeaways
Unless you’re ready to take Social Security, relying on $300,000 for your post-retirement years could be tough.
If your savings is in an IRA or 401(k), you’ll be unable to access it before age 59½ without penalty.
Investing your $300,000 could help you grow the savings you need to live comfortably in retirement.
Saving up 300 k can be significant work, and it’s certainly something to be proud of. It’s enough to buy a modest home in certain areas of the country, and you can make a low-risk investment with it and earn substantial interest. But if you’re asking if you can retire on 300 thousand dollars, you might be in for a challenge.
How to Retire on 300k
Can I retire on 350 000? What about $300,000? If you’ve asked those questions, you aren’t alone. Building a retirement savings can be tough, even for those who earn $300 000 a year. There always seems to be some unexpected expense wiping out any extra income you bring in. But if you want to retire on $300,000, it can be done. It just might require a little extra planning.
Spending From Your Assets
One line of thinking when it comes to retirement is the 4 percent rule. This rule has you only withdrawing 4 percent each year to improve the answer to how long will $300000 last retirement. If you have only $300,000 in your retirement assets, though, that’s only $12,000 per year, but when combined with Social Security, it could give you a comfortable retirement.
Frequently Asked Questions
Is 300k a good salary? Of course. But when it comes to retiring with $300,000 in savings, that amount is a little less than desirable. Whether you’re making a 50k or 300k salary now, in retirement, you’ll likely see a substantial drop in income. This is especially true if you’re trying to stretch $300,000 over the remainder of your life. Here are some frequently asked questions about retiring on $300,000.
Can You Retire on 300k in 5 Years?
Whether you can retire in five years depends on how long will $300 000 last retirement. If you’re 30 years old, obviously the funds won’t cover you. What happens if you exceed the average life expectancy of 77 and live to 97 or 100? If you’re old enough to apply for Social Security, you’ll need to crunch the numbers and make sure you’ll have enough income to supplement what you take out of your retirement savings.
Can You Live Off Monthly Interest on 300k?
It would be tough to live off standard interest on $300,000, but if you know how to invest 300 000 for income, you might be able to make it work. With a low-risk investment like an annuity, you can earn up to 3 to 4 percent interest, giving you at least a few hundred bucks of monthly income, but you’ll have to wait until the surrender period ends to get your money. If you go this route, make sure you look for an annuity that allows you to withdraw a certain amount each year.
Can A Couple Retire On 300k?
For couples considering how long will 300k last in retirement, knowing how to invest 300k is even more important. Your retirement savings will be halved. If you can downsize and set a strict monthly budget, you might be able to retire, but it also could mean one or both of you stay in the workforce longer to reduce your reliance on your savings.
Can I retire at 50 with $300k?
The problem with having a $300,000 nest egg, as opposed to $500,000 or $1 million, is that retiring early isn’t as viable an option. At age 50, you’ll have to stretch that $300,000 out further, so it will be important to find an investment with a high return. Better yet, look into what to do with 300k savings that will earn interest while you’re still working, then consider retiring once you’re older.
Can I retire at 55 with $300k?
Can I retire at 55 with 300k? Certainly, this age is better than 50, but you’ll need to be 59½ to withdraw funds from your 401(k) or IRA without penalty. This, combined with your ineligibility for Social Security benefits, might keep you from retiring early on $300,000.
Can I retire at 60 with $300k?
Then news gets a little better if you ask can I retire at 60 with 300k. The average life expectancy is 77, so that would give you $17,646 a year to live on. The best thing about hitting 60, though, is that you’ll pass the minimum age to take funds out of your 401(k) or IRA. However, the earliest age you can start taking Social Security is 62, so it might help to wait at least a couple more years.
How to Retire on 300k by Age
If you’re asking how to retire on 300k, chances are, you have a target age in mind. It’s important to look at the difference in stretching that $300,000 out between five years, 10 years, and 20 years, while also keeping in mind limitations like the 59½ withdrawal rule and the age to start receiving Social Security. The below chart assumes you’ll live to the average life expectancy of 77, although it’s highly possible you’ll be around much longer.
| Income per year (without interest) | Interest on yearly income (at 4 percent) | Income per year (with 4 percent interest) | |
|---|---|---|---|
| Age 50 | $11,111 | $444 | $11,555 |
| Age 55 | $13,636 | $545 | $14,181 |
| Age 60 | $17,647 | $706 | $18,353 |
| Age 65 | $25,000 | $1,000 | $26,000 |
| Age 70 | $42,857 | $1,714 | $44,571 |
Things To Consider When Retiring
Each person’s retirement planning process is different. You’ll need to look at the lifestyle you’ll lead, any other sources of income you might have, and the age you plan to retire to make these decisions. If you can put the money into a low-risk, high-yield asset, the return on 300k investment can help make that $300,000 grow.
Inflation Considerations
Can I retire with 300k also depends on how much prices increase between now and the day you leave the workforce. Chances are, if you can’t retire on 250k now, you won’t be able to retire on $300,000 later. Inflation can be unpredictable, but you can offset some of the increase by downsizing to a more affordable home and cutting back in as many areas of your budget as possible.
Final Thoughts
No matter when you plan to retire, investing 300k now can help give you the funds you need when the time comes. A certified financial planner can help you determine what you have to do now to reach your goals, whether you want to retire today, five years from now, or 20 years down the road.
Share this advice
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
Will I Have Enough?
Maintain Your Lifestyle
Share this advice
Stephanie Faris has written about finance for entrepreneurs and marketing firms since 2013. She spent nearly a year as a writer for a credit card processing service and has written about finance for numerous marketing firms and entrepreneurs. Her work has appeared on Money Under 30, The Motley Fool, MoneyGeek, E-commerce Insiders, and GoBankingRates.
Free Retirement Consultation
Still have questions about how to properly plan for retirement? Speak with a licensed fiduciary for free.
