Can I Retire At 60 With 500K
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Can I Retire At 60 With 500K

Can I Retire At 60 With 500K

If you hope to retire at age 60 with 500K in the bank, you will be happy to know that this goal can be attained! Follow our how-to guide for retirement savings plans.

How Can I Retire With 500K?

Common sense calls for $1-$2 million dollars to be saved for retirement. However, in many cases, this number is simply unrealistic. The truth is 500K can be enough money for some individuals to retire on. This doesn’t mean the savings process will be easy, though. Anyone planning to retire with 500K in the bank must implement strict budgeting from an early age. Follow our three steps to attain this goal below.

Step 1. Budget

A crucial building block toward early retirement is enjoying your current lifestyle while planning for retirement, at the same time. All basic living expenses, such as housing, utilities, healthcare and transportation, should be on a strict budget moving forward. To come up with the best budget for your living situation, the financial experts recommend going over all your bills from either the past month or year as a guide.

Determine which expenses you can cut back on. If you wish to retire by 60, then you can’t wait to start saving until your 40s! Come up with answers to these questions when figuring out a budget:

  • How much money do you spend on food per month?
  • How much do you spend on housing per month?
  • Do you spend money on entertainment each month?
  • Are you planning any educational savings accounts for your children?
  • Which health insurance plan will you use in the future?

Step 2. Save Early And Often

As anyone could have guessed, the more money you save throughout your lifetime will result in a more financially comfortable retirement. Saving as much money as possible while you are young and in the workforce is crucial toward obtaining your desired retirement goal. The good news is there are multiple savings options available these days.

Begin by asking your employer if there are any extra potential earnings opportunities. It’s recommended to always take advantage of any extra opportunities and check to see if your employer will match any amount fully toward your retirement plan. Other great savings options include opening a traditional or Roth IRA.

Step 3. Choose Location Wisely

Evaluating your current living situation is one of the hardest parts about saving for retirement. It’s recommended to consider moving to an area with lower housing costs, if possible. Of course, this can be a difficult ask of anyone working and raising a family, simultaneously.

Moving to a cheaper area can apply to your retirement plans instead of your current situation, though. With 500K saved, you shouldn’t expect to live in the must luxurious area during retirement. Even in retirement it’s wise to never live above your means.

When To Start Saving For Retirement

The financial experts recommend everyone start saving as soon as they can. Of course, this is easier said than done. Luckily, there are a few easy ways for young people to begin saving. Try to put away just 10% of your monthly income. Putting away $500 each month can give you an extra $6,000 per year. Saving 10% of your monthly income during your 20s will help cover for any potential dips in the stock market.

Americans believe they need a minimum of $1.7 million saved to retire comfortably at the age of 65. If that is the desired goal, then these individuals will need to save around $500 per month beginning at age 25, according to a Charles Schwab survey. Unfortunately, this can be very tough for young people raising a family and/or paying off student loans.

So when does the average American start saving for retirement? Let’s look at this data collected by Morning Consult:

  • Ages 20-29: 39%.
  • Ages 30-39: 25%.
  • Ages 40-49: 15%.
  • Ages 50-59: 6%.

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