How Long will 400k Last in Retirement? Is 400k Enough to Retire?

Assuming the same scenario as above (earn 7% on your investments and live on $3,000 per month), you could like on 300k for about 10 years. Again, this is a rough estimate. You could lower your expenses, work part-time (or even full-time if you choose too), or have passive income that stretches this money.

What about an even lesser amount? How long could you live on 200k? As you probably have already guessed, $200,000 would be the hardest to live off of based on the above scenarios. At $3,000 a month in expenses, your money would only last about 6 years. That's why it's important to also secure other income sources, like:

• social security,

• a pension, or

• passive income.

But, even with other sources of income, it may not be feasible to retire on 200k. Especially if you have a lot of expenses and don't plan to keep working or making money elsewhere.

You can likely retire at 65 with $400k in the bank and live somewhat comfortably. But, it is important to note that experts put the current "magic number" at around $1 million.

That doesn't mean you can't live on less than that. It just means that you'll need to keep a watch on the market and your withdrawals.

Yes. According to the Social Security Administration, you can receive Social Security benefits based on your earnings record if you are age 62 or older, or disabled or blind and have enough work credits. As of 2021, the average social security check is $1,437.55.

However, that amount can differ based on if you're living off of social security alone, in addition to the $400k you've saved, and other factors. Also, remember that if you're married and you and your spouse qualify, you could receive even more.

You have a lump sum of $400k plus you have a regular social security check coming in each month. So....can you retire on 400k plus social security?

First off, let's assume that you can earn 7% on your money and that inflation is 3% per year... If you want your 400k nest egg to last for 35 years, you could withdraw $1,750 per month. Add your social security check amount to that.

Let's say it's $1,400.That's a total of $3,150 per month. Nearly $38,000 per year. Could you live on that for the rest of your life? If the answer is 'yes', GREAT! You can retire. If not, then you'd better keep working and keep on building that nest egg.

Let's figure out a way to make retirement possible at 55 with just 400k. Here are my assumptions:

• You're single

• You can still live comfortably by withdrawing just $2,000 a month

• And, you can start to receive that $1,400/month social security check at age 62

• And finally, a 7% return on your money with a 3% inflation rate

You've got two main options for how to retire at 55 with 400k:

1. First, you could withdraw $2,000 per month for life and then take the social security check as a nice bonus on top of your $2,000 starting at 62

2. Or, you could make your money last longer by cutting back on the $2,000 by say $500 once you start receiving that extra $1,400 a month

Option 1 will give you a bit more money in your pocket once your social security starts to kick in. BUT, your money will still only last for 27 years with this scenario. In other words, it will last until you're 82. It might be long enough...but it also might not be.

Option 2 means that you'll have an income of $2,000 a month until you're 62. Then, it will bump up to $2,900 per month after your social security kicks in. Still not a ton of money, but it will give you more cushion as your get into your older years.

The best part though, is that your money will last approximately 40 years with this simple tweak! Money till you're 95? Now that sounds pretty good!

Of course, with any retirement planning, you've got to understand that there are unknown variables. You could get sick, you could get severely injured, or maybe inflationary costs rise much faster than the usual 3%! You just don't know. And, if you're trying to retire on very little, all these variables make it a pretty risky endeavour.

This depends on the market, and how your money is invested. But let's just assume the standard 7% across the board.

If you have $400,000 invested, you'll earn a whopping $28,000 in interest that first year. Of course, that number is assumed to grow, as long as you keep most of that in your account.

However, market changes, declines, and more may affect that. And of course, you could earn more based on higher rates and how well the market is doing.

Just as a note — if you go this route, you'll live off of the money that the $400k generates. By doing that, you can keep the principle in the market. By doing this, you'll have roughly the same amount of principal for years to come.

Taking that $28,000 and dividing it by 12 would equal about $2,300 a month. This doesn't account for dividends and other income sources. This simply means that if you let your money gain interest in the market, within a year, that $400k would earn $28k, or $2,300 a month.