Retire with $900k: a complete guide
Here’s everything you need to consider, from how long will $900k last in retirement to wealth-increasing tips.
Can you retire on $900k?
Yes, it is possible to retire very comfortably on $900k. This allows for an annual withdrawal of around $36,000 from age 60 to 85, covering 25 years. If $36,000 per year or $3,000 per month meets your lifestyle needs, $900k should be plenty for retirement.
However, if you model different spending scenarios, check the table below. It shows how $900k, assuming a 6% average annual return before taxes and 22% tax rate, would last over 25 years under different annual spending:
| Initial savings | Annual Spending | Ending Balance After 25 Years | Enough? | Required Initial Savings |
|---|---|---|---|---|
| $50,000 | $845,246 | Yes | $850,770 | |
| $60,000 | $556,735 | Yes | $1,026,154 | |
| $900,000 | $70,000 | $268,224 | Yes | $1,201,539 |
| $80,000 | −$20,288 | No | $1,376,923 | |
| $90,000 | −$308,799 | No | $1,552,308 |
It's important to note that individual financial circumstances can vary significantly, finding a financial advisor is essential to develop a secure and personalized retirement plan.
How long will $900k last in retirement?
$900k can last you for over 25 years in retirement if your annual spending remains around $50,000, following the 4% rule.
However, it will depend on your age at retirement and spending needs as a retiree.
Assuming a 6% average annual return before taxes and 22% tax rate, the table below shows how long $900k could last under different yearly spending:
| Spending Per Year | Years It Will Last | Total Interest | Total Withdrawal | Total Taxes |
|---|---|---|---|---|
| $50,000 | 28 | $1,260,000 | $1,400,000 | $308,000 |
| $60,000 | 23 | $1,035,000 | $1,380,000 | $303,600 |
| $70,000 | 19 | $855,000 | $1,330,000 | $292,600 |
| $80,000 | 17 | $765,000 | $1,360,000 | $299,200 |
| $90,000 | 15 | $675,000 | $1,350,000 | $297,000 |
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 $900k plus Social Security?
With nearly $1 million saved for retirement, Social Security payments can provide a nice income bonus on top. But how much they’ll contribute depends on when you claim and your lifetime earnings.
The average monthly Social Security benefit is currently about $1,600. For an individual with average career earnings, this equates to $19,200 per year in retirement. Married couples would qualify for $32,000+ annually.
These benefits are increased by inflation and continue for life. So combined with prudent use of your $900k next egg, they provide an extra buffer. Your savings should generate around $36,000 yearly, allowing you to withdraw less early on while Social Security kicks in.
One consideration is taxation on your benefits, which varies based on income thresholds. With the right planning though, $900k in the bank and Social Security in your back pocket make for a financially-comfortable retirement.
What are the income taxes applicable to retirees with $900k?
When financially planning your retirement with $900,000 in savings, you must evaluate how taxes could reduce your accessible income. Your liability mainly depends on:
Your filing status (single filer, head of household, married filing jointly, etc.)
Where you live as states have varying tax rules
Where your retirement income is from (different tax rules per source)
Your total annual income
If you have a traditional pre-tax IRA, the withdrawals are taxable, while Roth IRAs allow tax-free withdrawals.
Here’s an example: You retire at 65 and plan for your $900k savings to last 20 years. Withdrawing $900,000 over 20 years means $45,000 in annual income, or $3,750 per month. This income level places you in the 24% federal income tax bracket for an individual, withdrawing from a traditional IRA or 401(k).
Can you retire at 50 with $900k?
Retiring 20+ years before conventional retirement age is certainly ambitious, but could be feasible with the right preparation and discipline. With $900,000 banked by 50, here are the key considerations:
What are your expected fixed annual expenses in early retirement (housing, healthcare, transportation, etc.)? Develop a detailed budget as these costs can add up substantially.
How much discretionary spending do you hope to cover for pursuits like travel and hobbies? Account for this in your income planning.
Can you maintain an investment portfolio optimized for an ultra early, potentially 40+ year retirement horizon to reduce sequence of returns risk?
Might you pursue side income via part-time work, monetizing a passion project, or other means? Extra income can give more flexibility.
While a $900k nest egg seems sizeable, spreading it over potentially 40+ years with inflation raises the degree of difficulty. Strict budgeting around necessities and luxuries and planning for supplementary income are imperative to increase the odds of sustaining this ultra early retirement goal.
Speaking with a financial advisor can provide an informed second opinion on the feasibility of achieving this dream, help stress test your income assumptions, and increase your chances of turning this vision into reality.
Three routes to increased savings
You may now want to figure out how to increase your savings, growing that $900,000 to $1 million 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 $900k 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.