• Home
  • Politics
  • Health
  • World
  • Business
  • Finance
  • Tech
  • More
    • Sports
    • Entertainment
    • Lifestyle
What's Hot

Three Treatment Options To Consider

May 9, 2025

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

May 9, 2025

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025
Facebook Twitter Instagram
  • Contact
  • Privacy Policy
  • Terms & Conditions
Saturday, May 10
Patriot Now NewsPatriot Now News
  • Home
  • Politics

    Security video shows brazen sexual assault of California woman by homeless man

    October 24, 2023

    Woman makes disturbing discovery after her boyfriend chases away home intruder who stabbed him

    October 24, 2023

    Poll finds Americans overwhelmingly support Israel’s war on Hamas, but younger Americans defend Hamas

    October 24, 2023

    Off-duty pilot charged with 83 counts of attempted murder after allegedly trying to shut off engines midflight on Alaska Airlines

    October 23, 2023

    Leaked audio of Shelia Jackson Lee abusively cursing staffer

    October 22, 2023
  • Health

    Disparities In Cataract Care Are A Sorry Sight

    October 16, 2023

    Vaccine Stocks—Including Pfizer, Moderna, BioNTech And Novavax—Slide Amid Plummeting Demand

    October 16, 2023

    Long-term steroid use should be a last resort

    October 16, 2023

    Rite Aid Files For Bankruptcy With More ‘Underperforming Stores’ To Close

    October 16, 2023

    Who’s Still Dying From Complications Related To Covid-19?

    October 16, 2023
  • World

    New York Democrat Dan Goldman Accuses ‘Conservatives in the South’ of Holding Rallies with ‘Swastikas’

    October 13, 2023

    IDF Ret. Major General Describes Rushing to Save Son, Granddaughter During Hamas Invasion

    October 13, 2023

    Black Lives Matter Group Deletes Tweet Showing Support for Hamas 

    October 13, 2023

    AOC Denounces NYC Rally Cheering Hamas Terrorism: ‘Unacceptable’

    October 13, 2023

    L.A. Prosecutors Call Out Soros-Backed Gascón for Silence on Israel

    October 13, 2023
  • Business

    Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

    May 9, 2025

    OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

    May 9, 2025

    Trump Announces First Post-Tariff Trade Deal

    May 8, 2025

    Electric Vehicle Sales Nosedive As GOP Takes Buzzsaw To Biden’s Mandate

    May 7, 2025

    Tyson Foods Announces It Will Bend The Knee To Trump Admin’s New Rules

    May 7, 2025
  • Finance

    Ending China’s De Minimis Exception Brings 3 Benefits for Americans

    April 17, 2025

    The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

    April 17, 2025

    Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

    April 17, 2025

    How China’s Companies Are Responding to the US Trade War

    April 16, 2025

    The US Flip-flop Over H20 Chip Restrictions 

    April 16, 2025
  • Tech

    Cruz Confronts Zuckerberg on Pointless Warning for Child Porn Searches

    February 2, 2024

    FTX Abandons Plans to Relaunch Crypto Exchange, Commits to Full Repayment of Customers and Creditors

    February 2, 2024

    Elon Musk Proposes Tesla Reincorporates in Texas After Delaware Judge Voids Pay Package

    February 2, 2024

    Tesla’s Elon Musk Tops Disney’s Bob Iger as Most Overrated Chief Executive

    February 2, 2024

    Mark Zuckerberg’s Wealth Grew $84 Billion in 2023 as Pedophiles Target Children on Facebook, Instagram

    February 2, 2024
  • More
    • Sports
    • Entertainment
    • Lifestyle
Patriot Now NewsPatriot Now News
Home»Finance»Can I Retire at 60 With $300,000?
Finance

Can I Retire at 60 With $300,000?

October 7, 2023No Comments9 Mins Read
Facebook Twitter Pinterest LinkedIn Tumblr Email
Can I Retire at 60 With $300,000?
Share
Facebook Twitter LinkedIn Pinterest Email
Can I Retire at 60 With $300,000

Can I Retire at 60 With $300,000

The short answer to this question is, “Yes, provided you are prepared to accept a modest standard of living.” To get an an idea of what a 60-year-old individual with a $300,000 nest egg faces, our list of factors to check includes estimates of their income, before and after starting to receive Social Security, as well as expenses after retirement. Your own prospects in this kind of situation will vary, but by doing the sorts of calculations and estimates below, you’ll have a reasonable idea of what it will take for you to retire at 60 with $300,000. Consider working with a financial advisor as you explore your prospects for retiring early.

Income After Retirement: Social Security

A good place to start your assessment of whether you can retire at 60 with $300,000 is by looking at sources of income, including Social Security. The program is reverse-means tested, meaning that the less money you made during your working years the less generous your benefits in retirement. Earnings scale up to the maximum Social Security income, after which additional earnings no longer add to your lifetime benefits.

The maximum taxable income changes each year based on inflation. In 2022, it is set at $147,000, meaning that during 2022 you accrue the most Social Security credits if you earn up to that amount. If you earn less, you will collect fewer benefits when you retire. If you earn more, it will not add to your benefits.

Your benefits also change based on when you decide to retire. You receive the smallest amount of money if you file at age 62, scaling up each month that you wait until a maximum benefit payment at age 70. The standard set of benefits are paid at full retirement age, which is set at 66 years and four months for everyone under the age of 65 at time of writing.

Finally, Social Security benefits change each year as the Social Security Administration and Congress adjust this payment for inflation.

For 2022, the average retiree Social Security is $1,657 per month. For the purposes of this article we will assume a retiree who begins collecting benefits at full retirement age receives the average payment. You can calculate your own estimated benefits at the Social Security Administration’s website.

Income After Retirement: Investments and Savings

The average retirement account generates an average return of about 5% annually. Some estimates place this number higher, but we’ll use conservative math. With a retirement account of $300,000, this means an average return of about $15,000 per year. If you withdraw only those returns, you can generate income from your retirement portfolio without drawing down on the principal.

See also  Goldman Sachs Japan chief to retire at year end - internal memo

Let’s assume there are no income sources besides this $300,000 retirement account and average Social Security benefits. In this situation, an annual 2022 income would be:

  • $15,000 from retirement savings

  • $19,884 from Social Security payments ($1,657 per month)

  • Total: $34,884 ($2,907 per month)

Income Before Social Security

The first two, six or eight years, depending on when you decide to start taking Social Security, will be the most financially challenging.

For example, if you begin collecting benefits at age 62 (the earliest you can do so), you cut your lifetime benefits to 70% of full value. In the case of an average Social Security benefit, this means that you reduce your Social Security benefits to $1,160 monthly or $13,919 annually and cut your total annual income (Social Security plus investment income) down to $28,918, or $2,410 per month.

In most cases, you will have to wait until age 66 and four months to collect enough Social Security for a stable retirement. If you want to retire early, you will have to find a way to replace your income during that six-year period. In most cases $300,000 is simply not enough money on which to retire early. If you retire at age 60, you will have to live on your $15,000 drawdown and nothing more. This is close to the $12,760 poverty line for an individual and translates into a monthly income of about $1,250 per month.

Potential Pitfalls

Can I Retire at 60 With $300,000

Can I Retire at 60 With $300,000

As tempting as it would be to draw down the principal of your retirement account, resist the urge. Consider the consequences of not resisting. To match the estimated $34,884 per year budget, you would need to withdraw $19,884 per year from the principal of your retirement account in addition to withdrawing all of its average returns, so nothing will replace those withdrawals. Over a six-year period this would chop your retirement account to $119,304 from $300,000. And as your withdrawals shrink your nest egg’s balance, that balance would produce less and less income. By the time you begin collecting Social Security, relatively little would be left of your original $300,000.

Therefore, with a $300,000 retirement account, the odds are you will need to wait until full retirement age before collecting Social Security benefits. Collecting Social Security early reduces your benefits for each month you start before full retirement age. If you begin collecting benefits at age 62 (the earliest you can do so), you cut your lifetime benefits to 70% of full value. In the case of an average Social Security benefit, this means that you reduce your Social Security benefits to $1,160 monthly or $13,919 annually, and your total income (Social Security plus investment income) down to $28,918 or $2,410 per month.

See also  Western Alliance stock pares some losses after reassuring investors about deposits

For most people this is not a practical budget. It is just a little over 200% of the national poverty line for an individual ($12,760 per year in 2022) and well below the median income. Even if practical for a short period of time, this budget leaves no room for unexpected or growing expenses. These could include higher medical bills as you age or inflation. It also removes any flexibility to adjust for market downturns in your retirement.

For most retirees, if possible, you should wait until full retirement age.

Retirement Expenses: Taxes

With a good sense of your annual income based on a $300,000 retirement, the next question is simple: Will that be enough?

With $34,884 in annual income and a planned retirement age of 60, we need to anticipate three main issues: Taxes, expenses and pre-Social Security expenses.

You may have to plan on paying income taxes in retirement. This depends on a number of factors, most critically whether you primarily used a 401(k) or IRA (which taxes your withdrawals) or a Roth IRA (which does not tax withdrawals). Social Security benefits may also be taxed, depending on how much you earn.

While not fully accurate, the best way to estimate if you will owe taxes on Social Security is to take half of your benefits and add them to the rest of your income. For an individual, if this comes to more than $25,000 per year from all sources, you will likely owe taxes.

In our case we would calculate taxes as follows:

  • Social Security benefits = $19,884

  • $19,884 ÷ 2 = $9,942

  • All other income = $15,000

  • $15,000 + $9,942 = $24,942

When it comes to taxes, a miss is as good as a mile. We are below the $25,000 cutoff for individuals, and so our Social Security benefits won’t see taxes. This leaves us with only $15,000 of potentially taxable income. But individuals avoid taxes on capital gains below $40,400, so there are also no taxes on this money.

Now, it’s important to understand that we did not include potential state taxes in this analysis. And individual circumstances will vary. However, in this case, with $300,000 in retirement savings, average Social Security benefits and an individual filer, we can expect to pay no federal taxes in 2022.

Retirement Expenses: Annual Cost of Living

With $300,000 and Social Security, you can expect to collect just under $35,000 per year. On a monthly basis, that works out to about $2,900 per month. Is that enough to live on? It depends on numerous variables:

  • Do you pay a mortgage or rent?

  • Groceries

  • Utilities

  • What are your taxes (property, state and federal)?

  • What are your insurance (auto, life, medical, long-term care) expenses?

See also  The Undertaker discloses what forced him to retire

The above lists ignores entirely discretionary and luxury expenditures like travel and vacations. Even more critically, the above-listed expenses will rise yearly due to inflation.

In general, a retirement income of $35,000 is not unrealistic. At time of writing the median individual income in America, according to the St. Louis Fed, is $35,805. An income of approximately $35,000 is livable in the U.S. However, much of that depends on where you choose to live. Taking a retirement account like this to Kalamazoo, Michigan will be far more practical than trying to live in Chicago.

Reasons for Optimism

Can I Retire at 60 With $300,000

Can I Retire at 60 With $300,000

When trying to estimate your own lifestyle needs, most experts recommend estimating between two-thirds and three-quarters of your pre-retirement income. While working, you’ll have expenses that you won’t carry into retirement. In turn, you’ll also have more flexibility to move somewhere less expensive. That means that you’ll need less money than during your working life, though lifestyle bills can still add up.

In the case of a $34,884 retirement income, this estimate puts us around a pre-retirement income of $50,000 per year. 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.

Bottom Line

By age 55 the median American household has about $120,000 saved for retirement, and about $212,500 in net worth. So getting to $300,000 by 60 means you’ll have to be a better saver or investor than the average American. That’s because for the majority of people, early retirement is probably off the table. But if you’re willing to budget and keep an eye – a very close eye – on your expenses, it is possible. Just remember that the years between age 60 and whenever you begin getting Social Security will be the most challenging.

Tips on Retirement

  • You can do some learning about retiring on $300,000, but a financial advisor may have more insight into planning for this than you do. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

  • It pays to get a good estimate of whether you’re financially ready for retirement. Use SmartAsset’s free retirement calculator to begin.

Photo credit: ©iStock.com/Fly View Productions, ©iStock.com/AsiaVision, ©iStock.com/sanfel

The post Can I Retire at 60 With $300,000? appeared first on SmartAsset Blog.

retire
Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

Related Posts

Ending China’s De Minimis Exception Brings 3 Benefits for Americans

April 17, 2025

The Trump Tariff Shock Should Push Indonesia to Reform Its Economy

April 17, 2025

Tariff Talks an Opportunity to Reinvigorate the Japan-US Alliance

April 17, 2025

How China’s Companies Are Responding to the US Trade War

April 16, 2025
Add A Comment

Leave A Reply Cancel Reply

Top Posts

Dozens of Bags of Human Remains Found in Mexico During Search for Kidnapped U.S. Citizen

June 7, 2023

Contaminated Eye Drops Outbreak Has Left 3 Dead, 4 With Eyeballs Removed

March 26, 2023

Mongolian Parliament Passes Legislation to Establish Sovereign Wealth Fund

April 26, 2024

Lionel Messi’s sensational start to life in MLS means $360,000,000 superstar Aaron Judge isn’t Miami’s headline act ahead of Yankees’ Marlins showdown

August 13, 2023
Don't Miss

Three Treatment Options To Consider

Lifestyle May 9, 2025

The most common cause of hair loss in men is male androgenetic alopecia (MAA), otherwise…

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

May 9, 2025

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025

OpenAI CEO Warns: ‘Not A Huge Amount Of Time’ Until China Overpowers American AI

May 9, 2025
About
About

This is your World, Tech, Health, Entertainment and Sports website. We provide the latest breaking news straight from the News industry.

We're social. Connect with us:

Facebook Twitter Instagram Pinterest
Categories
  • Business (4,112)
  • Entertainment (4,220)
  • Finance (3,202)
  • Health (1,938)
  • Lifestyle (1,629)
  • Politics (3,084)
  • Sports (4,036)
  • Tech (2,006)
  • Uncategorized (4)
  • World (3,944)
Our Picks

Supreme Court Orders Imran Khan’s Release After Days of Riots

May 15, 2023

Adam Schiff Renews Call for Democrats to Pack U.S. Supreme Court With Liberal Justices | The Gateway Pundit | by Mike LaChance

July 4, 2023

Apple Loses Copyright Case Against Startup That Simulated iOS For Research

May 9, 2023
Popular Posts

Three Treatment Options To Consider

May 9, 2025

Microsoft Bans Employees From Using ‘Chinese Propaganda’ Chatbot

May 9, 2025

How Smart Mattresses Improve Sleep Quality For Couples

May 9, 2025
© 2025 Patriotnownews.com - All rights reserved.
  • Contact
  • Privacy Policy
  • Terms & Conditions

Type above and press Enter to search. Press Esc to cancel.