Retire with $700k: a complete guide
Here’s everything you need to consider, from retirement income taxes to wealth-increasing tips, if you plan to retire with $700k.
Can you retire on $700k?
$700k can last you for at least 35 years in retirement if your annual spending remains around $20,000, following the 4% rule.
However, it will also depend on how old you are when you retire and how much you plan to spend each month as a retiree.
Assuming an average annual return of 6% before taxes and a 22% federal tax rate, the table below offers a detailed breakdown of how long $700k can last across various annual spending scenarios:
| Initial savings | Annual spending | Enough? | Ending balance after 25 years | Required initial savings |
|---|---|---|---|---|
| $40,000 | Yes | $518,755 | $613,077 | |
| $50,000 | No | $213,511 | $775,385 | |
| $700,000 | $60,000 | No | -$91,733 | $937,692 |
| $70,000 | No | -$396,977 | $1,100,000 | |
| $80,000 | No | -$702,222 | $1,262,308 |
If you’re struggling to work out how much money you’ll need in retirement and how much you’ll need to save, a financial advisor can help. They will work with you to understand your unique needs and create a retirement savings plan to make your money go further. Match with a financial advisor below.
How long will $700k last in retirement?
$700k can last you for at least 25 years in retirement if your annual spending remains around $40,000, following the 4% rule.
However, it will depend on how old you are when you retire and how much you plan to spend each month as a retiree.
Assuming an average annual return of 6% before taxes and a 22% federal tax rate, the table below offers a detailed breakdown of how long $700k can last across various annual spending scenarios:
| Spending Per Year | Years It Will Last | Total Interest | Total Withdrawal | Total Taxes |
|---|---|---|---|---|
| $30,000 | 32 | $1,440,000 | $960,000 | $211,200 |
| $40,000 | 24 | $1,260,000 | $960,000 | $211,200 |
| $50,000 | 19 | $1,140,000 | $950,000 | $209,000 |
| $60,000 | 15 | $900,000 | $900,000 | $198,000 |
| $70,000 | 12 | $720,000 | $840,000 | $184,800 |
| $80,000 | 10 | $600,000 | $800,000 | $176,000 |
Retirement plans, annuities and Social Security benefits should all be considered alongside the figure you have sitting in savings, and you should also bear in mind that expenses as a retiree tend to be low. Especially if any children are now financially solvent adults and large loans, such as your mortgage, have been paid off.
Can I retire on 700k plus Social Security?
Is $700k Enough to Retire On With Social Security?
Retiring comfortably takes more than just money in the bank - it also takes proper planning. With $700,000 in personal savings, plus income from Social Security payments, you have a solid foundation to work with.
However, there are still variables to consider. Your annual Social Security benefit can range anywhere from $15,000 to the maximum of around $40,000 per year, depending on your past earnings history and when you start taking payments. Your spending habits and lifestyle desires in retirement are also key factors.
Additionally, with average life expectancies continuing to increase, your retirement savings may need to last 25 years or more. It's important to calculate all these variables, project future returns, and define your must-have retirement goals before deciding if $700k is truly enough for you. Meeting with a financial advisor can provide personalized guidance based on your situation.
What are the income taxes applicable to retirees with $700k?
When working through your later-life financial checklist to prepare for retirement, you must consider how taxes will factor in. You’ll need to know how much they will reduce your final amount of accessible income. With $700,000 in savings, your tax bill still won’t likely be exorbitant – especially if you withdraw funds gradually over 20+ years. But your liability will come down to:
Your filing status (single filer, head of household, married filing jointly, etc.)
Where you live (different states have different tax rules)
Where your retirement income is from (rules differ based on source)
Your total annual income
If you have a traditional pre-tax IRA, distributions will be taxed. But if you have an after-tax Roth IRA, you’ve already paid taxes on contributions so can withdraw tax-free.
Here’s an example: You retire at 65 and your goal is for savings to last 20 years. Spreading $700,000 over 20 years means monthly withdrawals of $2,917 and annual income of $35,000. This would place you in the 22% federal income tax bracket for a single filer.
Can you retire at 50 with $700k?
It’s certainly possible to retire early at 50 with $700,000 in savings, but you’ll likely need to make some lifestyle adjustments.
Using the 4% safe withdrawal rate, you could take out $28,000 per year, or $2,333 per month. This should last you for 30 years until age 80 assuming average market returns. If you estimate living longer to 85 or 90, the amount would be reduced some.
Overall, with a frugal budget of $28,000 or less in annual spending, retiring fully at 50 should be achievable. Even if you can't quite get there by 50, you'd be on track to achieve it in your mid-50s potentially.
The keys will be controlling expenses, utilizing tax-advantaged accounts strategically, having supplemental income sources if possible, and making sure you have health insurance coverage figured out. With proper planning and discipline though, many find $700k is an adequate amount to retire on at 50.
Three routes to increased savings
You may now want to figure out how to increase your savings, growing that $700,000 to $800,000 or more to give yourself some additional breathing room. Some extra disposable income as a retiree. Our best recommendations are as follows:
Adjust your monthly budget and save where possible – try to avoid regularly spending your money on unnecessary things that matter less to you, in the grand scheme of things, than a happy and comfortable retirement. Set achievable lifestyle and financial goals with proper consideration of your future self. Cut back where you can, and redirect that money where it can be better used.
Build a varied portfolio of investments, seeking expert advice – a solid and stable investment portfolio comprising several types of securities could be very helpful to you, significantly boosting your savings and improving your retirement. If you don’t know where to begin, speak with an expert financial advisor to get started on your journey into investing.
Find the right retirement and pension products – many different savings accounts and products are available that can be helpful to you as a retiree. Annuities, for example, convert your savings into a guaranteed monthly income for a given period. This period could be the rest of your life if you purchase an annuity with a lifetime income rider.
The bottom line
If you’ve managed to save $700k for retirement, this is a viable savings for your post-work life.
This will guarantee you a valuable degree of security and comfort in your later years, and it’s a figure many will never reach
For retirement planning advice and investment guidance, connecting with an experienced financial advisor is highly recommended. They can guide you through the daunting world of retirement planning and lead you to success. Get started with Unbiased and find your perfect match.
Senior Content Writer
Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.