Income
Saving for retirement takes time and extra income. Once you’ve amassed a half million dollars in savings, you might wonder if that’s enough. But before asking can I retire at 60 with 500k, or how much do I need to retire at 55, you’ll need to crunch some numbers and decide exactly how much money do you need to retire comfortably.
Stephanie Faris
Published April 22nd, 2022
Stephanie Faris
•
Published April 22nd, 2022
Table of Contents
Key Takeaways
Knowing how much is needed to retire at 55, retire at 57, or retire at a later date can be tricky.
Retirement savings of $500,000 can be a solid retirement fund, as long as your Social Security income provides enough to supplement it.
Setting a budget that will maximize your savings can help make that money go a little further.
Saving for retirement takes time and extra income. Once you’ve amassed a half million dollars in savings, you might wonder if that’s enough. But before asking can I retire at 60 with 500k, or how much do I need to retire at 55, you’ll need to crunch some numbers and decide exactly how much money do you need to retire comfortably.
How to Retire on 500k
Instead of asking how to retire at 50 or retire at 60, it’s better to first look at how you can retire on the money you have. If it looks like you’ll have $500k by the time you retire, work backward from there. Draw up a budget that includes the following:
- Housing expenses
- Utilities
- Food
- Healthcare
- Transportation
- Dining out and entertainment
- Travel
Spending From Your Assets
Whether you have $500,000 and you’re looking at how to retire at 55, or you’re just starting to save and you want to know how much money needed to retire at age 60, it’s important to consider how much you’ll need to take from your retirement savings each year. You’ll be supplementing your Social Security income each month, so you might be able to get away with taking a couple thousand dollars each month. But if you’d prefer to live a little more lavishly, you might want to ask can you retire on a million dollars and start setting aside the extra cash to make it happen.
Frequently Asked Questions: Retiring in 2 Years
Often when considering retirement savings, people ask questions like, “How much do I need to retire at 62?” or, “How much to retire at 55?” The problem with those specific questions is that it depends how early you start. But if you hope to retire within the next two years and you have $500,000 saved up, you’ll have a better picture of what your expenses will be, making it easier to calculate. Those planning to retire in 10 or 20 years might have a tougher time gauging actual costs.
Can You Retire on 500k in 5 Years?
The answer to, “Is 2 million enough to retire?” is easier than whether $500k is enough. But if you want to retire in the next five years, you’ll need to look at your specific age. How much to retire at 60 is different from how much do you need to retire at 55 for one simple reason. You can start claiming Social Security as early as age 62, and you can access some retirement savings accounts at age 59½ without penalty.
Can You Live Off Monthly Interest on 500k?
To determine can I retire at 60 or 65, it’s best to first consider how much interest your retirement savings will earn. The reason $500k can be a reasonable answer to, “How much is enough to retire?” is that you could reasonably live off the interest. Look into stocks or bonds that will reliably pay 3 percent to 5 percent interest to supplement your Social Security income.
Can A Couple Retire On 500k?
The answer to how much money do you need to retire at 55 or older gets a little more complicated if you’re retiring for two. Any benefits you get from interest will be halved. That said, you might be able to retire on 500k as a couple if you both have Social Security income.
Can I retire at 50 with $500k?
Looking at how much money needed to retire at age 65 is one thing, but asking can you retire on 500k at age 50 is quite another. The truth is, your finances will be tight. Keep in mind that you won’t be eligible for Social Security until age 62, so you may find it tougher to stretch that $500,000 out over the years.
Can I retire at 55 with $500k?
The outcome isn’t much better at age 55. Can you retire on 500k? Yes. But again, you’ll have a full seven years until Social Security kicks in. If you have only $500k in the bank, you might want to either work part-time or stick with a full-time job until you get a little closer to Social Security eligibility.
Can I retire at 60 with $500k?
Those asking how much do I need to retire at 60 will get a slightly more optimistic answer. The truth is, even if you have to cut into some of your $500k until Social Security kicks in, it won’t make too sizable a dent in your retirement savings. The best way to make how to retire at 60 work is to either live a little more conservatively or consider working part-time to reduce what you have to take from your savings.
How to Retire on 500k by Age
Whether you’re looking at how much needed to retire at age 60 or how much money do I need to retire at 55, it can help to know exactly what you’re looking at. Based on the average life expectancy of 77 years, here’s the amount you could safely take out each year.
| Income per year (without interest) | Interest on yearly income (at 4 percent) | Income per year (with 4 percent interest) | |
|---|---|---|---|
| Age 50 | $18,518 | $740 | $19,258 |
| Age 55 | $22,727 | $909 | $23,636 |
| Age 60 | $29,411 | $1,176 | $30,587 |
| Age 65 | $41,666 | $1,666 | $43,332 |
Things To Consider When Retiring
Whether you’re looking into how to retire at 62 with little money or how much money is enough to retire in general, there are some things to consider. Your cost of living is perhaps the biggest decider. If you can pay off your house and reduce your monthly expenses in other ways, the answer to, “Can I retire on 500k?” might be “yes” even at a younger age than it would otherwise.
But it’s also important to consider how your life will change when you’re wondering how much money to retire at 55. You’ll likely see more healthcare expenses as you get older. More leisure time could also lead you to consider traveling. Those considerations may impact your answer to can you retire at 60 or 62 rather than 65 or 67.
Inflation Considerations
Is 4 million enough to retire at 60? Chances are, that amount is better than $500,000, but no matter how much you have in retirement savings, a budget is important. Keep in mind that prices will increase over time, so how much do you need to retire comfortably can change. Even if you own your home, you’ll see increases in property taxes, utility costs, insurance, groceries, and other everyday purchases. Although inflation can make sharp dips and surges over the years, overall, prices rise over a period of decades. All of this means that if you’re looking at how to retire at 62, you might consider the number of years you’ll see inflation rise and factor that into how far your $500k will stretch.
Final Thoughts
If you’re wondering how much money do I need to retire at 62 or younger, the key is to look at how much you’ll need to supplement your Social Security. A Certified Financial Planner (CFP®) can help you create a budget, along with a plan to set aside the money you need to meet your retirement goals. Whether you’re asking is 5 million enough to retire or how long will 500k last in retirement, a solid plan can go a long way.
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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.
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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.
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