How much do you need to retire on $60,000 a year?
Savings needed to retire on $60,000 a year
The withdrawal rate is the share of your savings you take out in the first year of retirement, then adjust for inflation. A lower rate is safer and needs a bigger pot.
Spending $60,000 a year
| Withdrawal rate | Savings needed |
|---|---|
| 3% | $2,000,000 |
| 3.5% | $1,714,286 |
| 4% | $1,500,000 |
| 5% | $1,200,000 |
Before taxes. Does not include Social Security or a pension.
How much to save each month
To build $1,500,000 from zero, the monthly saving depends on how long you have and the return you earn.
Reaching $1,500,000
| Years to save | Monthly at 6% | Monthly at 4% | Monthly at 8% |
|---|---|---|---|
| 15 years | $5,228 | $6,131 | $4,443 |
| 20 years | $3,308 | $4,123 | $2,636 |
| 25 years | $2,218 | $2,948 | $1,650 |
| 30 years | $1,539 | $2,189 | $1,065 |
| 35 years | $1,092 | $1,667 | $700 |
Saved at month end. Returns are not guaranteed.
Inflation: what you will really need to spend
Prices rise, so $60,000 a year in today's money costs more later. With 2.5% inflation the same lifestyle costs $98,317 a year in 20 years, so the savings target based on the 4% rule grows with it.
$60,000 a year in today's money
| When | Spending needed | Target at 4% |
|---|---|---|
| In 0 years | $60,000 | $1,500,000 |
| In 10 years | $76,805 | $1,920,127 |
| In 20 years | $98,317 | $2,457,925 |
| In 30 years | $125,854 | $3,146,351 |
Illustration at 2.5% a year inflation.
Social Security and other income
Social Security, a pension or part-time work can lower the amount you need to draw from savings. If those cover $18,000 of your $60,000 budget, you would only need to fund $42,000 yourself, a target of about $1,050,000 at 4%. You can see your own Social Security estimate at ssa.gov.
What the 4% rule leaves out
- Taxes: withdrawals from traditional 401(k) and IRA accounts are taxed as income.
- Healthcare costs before and after Medicare begins at age 65.
- Inflation, which raises spending needs every year.
- Market falls early in retirement, which can shorten how long savings last.
Sources and further reading
Questions people ask
How much do I need to retire on $60,000 a year?
What is the 4% rule?
Should I count Social Security?
Results are estimates for information only, not financial advice. Read the full disclaimer.