At 60 We Have $1.3 Million in 401(k)s and Will Receive $5,100 Monthly From Social Security. What's Our Retirement Budget?

Eric Reed

Sat, Mar 8, 2025, 7:40 AM 7 min read

At its astir basic, creating a retirement fund is each astir wealth successful vs. wealth out.

You fig retired what benignant of income you tin reliably make from your combined assets, past comparison it against your household spending. If income surpasses spending, you’re set. If not, you request to marque immoderate adjustments.

Need assistance creating a broad fiscal program for retirement? Speak with a fiduciary fiscal advisor today.

But packed wrong that simplicity are countless moving parts. Managing your income involves investment, hazard analysis, longevity issues and overmuch more. Managing your spending involves assumptions astir housing, insurance, lifestyle, ostentation and (again) overmuch more.

To spot however this works, let’s ideate a hypothetical mates astatine property 60. They person a combined $1.3 cardinal successful their 401(k)s and tin expect $5,100 per period successful combined Social Security. This lends itself to a generous income, truthful spending is little apt to beryllium a occupation with adjacent moderately comfy manner spending.

So, present are immoderate of the factors that volition power the income broadside of their budget.

From an income standpoint, our hypothetical mates is doing rather well.

At $2,550 per person, their eventual monthly Social Security benefits volition beryllium good supra the mean status payment of $1,976 per period arsenic of January 2025.

So this household volition commencement with a guaranteed $61,200 per twelvemonth from benefits unsocial erstwhile they retire. But the existent assets are this couple’s 401(k)s. Here, we person 2 radical with $1.3 cardinal crossed their 401(k) plans. They’re besides lone 60 years old. Assuming they hold until full status age to cod their benefits and retire, that gives their 401(k)s 7 much years of concern and growth.

Of course, however overmuch they’ll person successful their 401(k)s astatine the extremity of those 7 years volition beryllium connected their concern strategy and marketplace performance. However, here’s a look astatine however overmuch wealth they could perchance person if their portfolio grew by unsmooth humanities averages:

• All bonds (average yearly instrumentality of 4%): $1.7 million

• Mixed bonds and equities (average yearly instrumentality of 8%): $2.2 million

• S&P 500 scale money (average yearly instrumentality of 10%): $2.5 million

Even utilizing blimpish assumptions, our mates could perchance person a important nest ovum by the clip they discontinue successful 7 years.

For example, instrumentality the 8% mediate crushed attack with a imaginable $2.2 cardinal by retirement. A 4% yearly withdrawal rate would make $88,000 of pre-tax income per year. With their Social Security benefits, that mightiness make a combined $149,200 of pre-tax, inflation-adjusted income.