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Can We Live on $100k Per Year? We Have $2.5 Million Saved and $40k in Social Security Benefits at 67

Updated: 04-11-2024, 02.42 PM

A husband and wife who are both 67 look over their assets as they set a retirement budget.
A husband and wife who are both 67 look over their assets as they set a retirement budget.

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Picture this scenario: You and your spouse are both 67, have $2.5 million in savings and collect $40,000 in annual Social Security benefits. Is that enough to support a $100,000 lifestyle in retirement?

This question is really multi-pronged. It’ll depend on when you both plan to retire, if you can you generate $100,000 per year for life, and if it’s in fact enough to retire on. The good news is that, with this kind of financial profile, you can likely meet your goals. However, if you need additional help surrounding retirement planning, consider matching with a financial advisor.

If you’re married and planning to retire at the same time as your spouse, it’s important to consider the implications of that decision.

“If one spouse plans to retire before age 65, it can make sense for the other spouse to continue working for health insurance benefits,” said Nathaniel Donohue, CFP® and partner with Consilio Wealth Advisors. “Households that retire before age 65 are often met with costly private healthcare plans.”

But if you’re 67, you’ll already be eligible for Medicare so having employer-sponsored healthcare may not be as important.

However, a married couple planning to retire at the same time will want to think strategically about when to start collecting Social Security.

“Assuming the couple is in good health, it’s often best for the higher earner to defer as long as they can. Ideally until age 70,” said Bryan Kuderna, CFP® and founder of the Kuderna Financial Team. “And while Social Security or pensions are being deferred, low-income years after retirement can present Roth IRA conversion opportunities.”

If you need help deciding when to collect your benefits, consider working with a financial advisor.

A married couple reviews their investment portfolio together.
A married couple reviews their investment portfolio together.

Next, you’ll need to think about how to generate $100,000 in retirement income.

“Retiring at 67 with $2.5 million in savings and $40,000 in Social Security benefits offers a solid financial foundation,” said Bryan Cannon, author of Retirement Unplanned: An Expert Guide For Navigating The Crossroads of Retirement With Confidence. “To generate $100,000 annually, consider a conservative withdrawal rate (4%), diversify your investments, and be attentive to monthly budgeting.”

This portfolio strategy can likely hit your $100,000 income goal, especially since it only needs to generate $60,000 per year with Social Security taking care of the other $40,000. For example, say that you kept your entire portfolio in cash. Over 30 years you could afford to withdraw about $83,000 each year.

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