Possible To Retire On $600,000?

[Marcretire]

Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.

 

[Rich_by_the_Bay]

Yes, if your $2000 per month expenses are before taxes.

Welcome to the board. You may want to read the FAQs, and look at FIRECalc to help sort things out. Rule of thumb suggests that if you play it right, you need about 25x your annual expenses to come out OK.

 

[bbbamI]

I suggest you run your numbers through firecalc, paying close attention to inflation and how your funds are invested.

 

[crazy connie]

Yes. But if the market has a hard time... You have a hard time. The nest egg you have is really close to not having to work at all anymore for wages. Is there some way to boost it a bit and or do part-time work? I would want a little more cushion myself. Check out Firecalc here and Welcome to 72t on the Net those two are the best around to do the what if scenarios with.

I also pulled the plug at 50 and understand the desire to move on.

 

[youbet]

Do you have any pension coming later? Qualify for SS? What will you do for health insurance?

 

[kcowan]

There is no way. Keep working or move to the Ozarks. You think it is $2k but you have not considered all your costs.

 

[SecondCor521]

There is no way. Keep working or move to the Ozarks. You think it is $2k but you have not considered all your costs.

kcowan, do you know the OP personally? How do you know he hasn't considered all his costs?

2Cor521

 

[FANOFJESUS]

Sounds like it would work. In tweleve years you will have some SS. Can you make it in New Jersey on 2k a month? We can do it but we are in the midwest.

 

[steve88]

Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.

check out boglehead ..there is a guy there that retired on that amount. He grew his 600000 to 1.4 mil in 10years

 

[Notmuchlonger]

Go for it. Heck you might die well before you blow all of that. Just remember most people think they will live to 120.

 

[Enuff2Eat]

perfect for oversea deal.

 

[camefromnothing]

I'm about your age and have around the same amount in my retirement account but I am married. If I were single and have no mortgage, I think I could live off that money plus my projected SS income of $1300/mo in 7 years. Yes, I live in LA.

 

[chinaco]

Of course it all depends on your projected expenses including health care which is increasing at a rate faster than normal inflation.

600k at 4% wold yield the 2k/mo.. but I think you have underestimated your expenses.

IMHO - You need to work a few more years. Sock away a little more money and get closer (in age) to SS and any pensions you hopefully have available. In your situation, I would set a target of $1MM, and a house (that is in good shape) paid off. Perhaps you could set a goal between 55 and 59.

 

[retire@40]

You need to consider the following if you haven't already:

Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?

What do you plan on doing after retirement that you didn't do pre-retirement? Will it cost more? $2K a month may not leave enough wiggle room for travel and entertainment, although you might be doing activities that don't cost much like walking in the park, reading at the library, riding your bike.

 

[Midpack]

Hi, would like very much your thoughts. I'm 50, single, no kids, no debt except $14K on mortgage. Have $600,000 in savings in the form of my 401(k). Wondering if it's feasible to retire and live off these funds.My overhead is low, just need around $2,000 month,which takes care of apartment maintenance, utilities, healthcare insurance. Thanks for your advice.

Looks like it could work, but I'll ask the question that others are being more subtle about: How much are you budgeting per month for health care?

 

[Marcretire]

You need to consider the following if you haven't already:

Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?

What do you plan on doing after retirement that you didn't do pre-retirement? Will it cost more? $2K a month may not leave enough wiggle room for travel and entertainment, although you might be doing activities that don't cost much like walking in the park, reading at the library, riding your bike.

Thanks, everyone, for your replies. What is accelerating my desire to retire is the industry I've worked in is in a state of collapse and I'm finding age an impediment in my job search (sales). I'm in excellent health and don't foresee significant healthcare costs, although I know there's no guarantee of good health. The only other added future expense would be a new car. I'm pretty much living on a couple thousand a month pre-retirement. I'll weigh everyone's advice.

 

[Dawg52]

You need to consider the following if you haven't already:

Is $2K a month your post-retirement budget or your pre-retirement budget? They could be the same, but they could be different. If you post your post-retirement budget here it might help. Did you factor in large ticket items like car purchases, root canals, purchase of a dog, etc?

Yup, similar expenses for me just in the last few days. As discussed in another thread, had a new crown installed yesterday and my dog will have surgery next week. Poor baby might even need some treatments afterward. So you need to budget for the unexpected.

 

[maddythebeagle]

I'm in excellent health and don't foresee significant healthcare costs, although I know there's no guarantee of good health. The only other added future expense would be a new car.

On that budget, I would suggest a used car

 

[REWahoo]

...or the bus.

 

[redduck]

You might consider working for a few more years. Your health insurance premiums will be going up and your body (more than likely) will require more visits to the doctor--so, depending on your policy, there could be more co-payments and the meeting of deductibles. I don't know if you have dental insurance, but if you need a crown or two, it's going to throw your budget way off.

The other thing, when I'm retired, I don't want to be anxiously thinking about money. I want to be able to spend on the stuff I want or need without agonizing. I don't think $600,000 will do it in a comfortable manner.

 

[retire@40]

Well, he did say he is 50 years old, so maybe if he can make it on 4% through age 62 and then start collecting social security benefits, he can manage. Then at 65, Medicare kicks in and can save him a few more bucks.

He can also work as a school crossing guard or putz around at an odd job here or there to earn that little extra to get by. Every dollar that he can earn is that much less he needs to withdraw from his stash. So if he can earn $1000 during the year (not to hard), it's the equivalent of "adding back" the withdrawal on $25,000 of assets.

Depends how bad he wants it.

 

[W2R]

Thanks, everyone, for your replies. What is accelerating my desire to retire is the industry I've worked in is in a state of collapse and I'm finding age an impediment in my job search (sales). I'm in excellent health and don't foresee significant healthcare costs, although I know there's no guarantee of good health. The only other added future expense would be a new car. I'm pretty much living on a couple thousand a month pre-retirement. I'll weigh everyone's advice.

It sounds like pretty soon, your job will evaporate and the choice will be out of your hands. If that is correct, then I think that you need to start getting ready to retire. Keep saving and keep looking for ways to keep your expenses down.

It's perfectly possible to retire on less than $600K - - many, many people do that. But it really depends on your lifestyle. I think what worries people is that apparently you live on the east coast, which is not a low cost of living region. You might want to re-think that. Or, you might consider taking a lower paying part time job that is not in your collapsing industry, and add all of the income from that job to your nestegg.

If I was in your position, I would continue working until my job evaporated, take unemployment or retirement incentives if offered. Then I would load my possessions into a rental truck and move to a low cost area in the midwest (which I plan to do anyway). There, I would buy a house for about $125K. I would add any excess from the sale of my previous home to my nestegg. That nestegg addition of several hundred thousand should give you some extra income as well.

So, at that point you would have maybe $800K? Then with a 4% withdrawal rate, which is generally considered to be safe, you would have $2666/month before taxes. That should give you around the amount you need to live on after taxes. Then I might consider taking a part time, low paying (and low stress) job, pouring my pay into my nestegg. I wouldn't take a part time job if my medical insurance was pretty sure to remain low, but I gather yours could go up as health care costs spiral upwards.

You can retire, carefully and after thinking through your expenses and investments carefully.

 

[Art G]

I'm sure there will be plenty on here to tell you how stupid the idea is, but I'm throwing it out there anyway. A V.A. at age 50 would pay you 4% FOR LIFE, with increases as you grow older. 4% equals $24k per year. .....I'm just sayin'.

 

[ziggy29]

It will be tight, especially if you have no pension. If you have a big fat pension coming in the next few years and you live a simple, low cost lifestyle, it seems doable depending on how you tackle the 800-pound health insurance gorilla.

 

[Bestwifeever]

I think I read the average person nearing retirement age has $50K saved up--you are way ahead of that. I'm sure you can make it work.