Written By
Sheikh Hasib Ahmed
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If you're nearing retirement, will a half million dollars be enough, even though it may seem like a lot of money?
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If you have $500,000 in a pre-tax IRA and expect to get $2,000 per month in Social Security benefits, you might have enough money to retire at age 67.
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Despite being a small nest egg, a half million dollars can, depending on your lifestyle, generate a comfortable income. As you construct your retirement goals based on these figures, take into account the following:
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Remember to consider your longevity and health before everything else. Because of your health, are you planning to retire at 67, or will you be able to continue working if necessary?
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Your health may start to fluctuate more as you get closer to your late 60s and 70s. Even if you are in good health, over time your workweek may grow longer and more strenuous.
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In light of this, it's crucial to determine if you can continue working after the age of 67 as well as how long your $500,000 will last if you have to retire at 67.
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Bryan M. Kuderna, the founder of Kuderna Financial Team, told SmartAsset that lower net worth conditions "typically imply less room for error."
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"There’s always a lot to consider, but... removing variables for simplifying the math means $500,000 over a 20-year hypothetical retirement equals $25,000 annual spend down."
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We can proceed with a $4,000 monthly cash withdrawal plus Social Security income.
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Even though $500,000 seems like a lot of money, retirement savings only require a modest amount of money. Your income will be significantly influenced by how you invest this money and organize your withdrawals.
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For instance, Kuderna notes that you could keep everything in cash and make withdrawals of $2,000 per month for 20 years.