Is $400,000 enough to retire?
$400,000 produces $16,000 in year one at 4.0%. Against $27,000 of spending that is 59% coverage — the spend is larger than a 4% (or chosen) withdrawal. A constant 5.0% return exhausts the portfolio in year 19. Across 1,000 seeded paths the spend lasts the full horizon in 7% of worlds; the 10th-to-90th ending range is $0 to $0. To see how long $400,000 lasts at other spending levels, with Social Security and taxes, use the how long will my money last calculator.
How much income will $400,000 generate?
A withdrawal rate turns a nest egg into income. The higher the rate, the more you spend now and the sooner the money can run out. Years shown at a steady 5% return, with the withdrawal raised 2.0% a year for inflation.
| Withdrawal rate | A year | A month | Lasts at a 5% return |
|---|---|---|---|
| 3.0% | $12,000 | $1,000 | more than 60 years |
| 3.5% | $14,000 | $1,167 | 59 years |
| 4.0% | $16,000 | $1,333 | 44 years |
| 4.5% | $18,000 | $1,500 | 35 years |
| 5.0% | $20,000 | $1,667 | 30 years |
$400,000 plus Social Security
Social Security pays beside the portfolio, so the nest egg only has to cover the gap. Monthly income with a 4% withdrawal and benefits claimed at 67, using the estimates from Social Security’s own formula for a steady career:
| Household | Social Security | From $400,000 | Total a month |
|---|---|---|---|
| Single, $50,000 career | $2,054 | $1,333 | $3,387 |
| Single, $75,000 career | $2,694 | $1,333 | $4,027 |
| Couple, one $100,000 career and a spousal benefit | $4,998 | $1,333 | $6,331 |
| Couple, two $60,000 careers | $4,620 | $1,333 | $5,953 |
Withdrawals from a traditional IRA or 401(k) are taxable income, so the spendable amount is lower: see the tax on a $20,000 401(k) withdrawal or the retirement taxes pages for your state.
How long will $400,000 last in retirement?
Years $400,000 lasts at a steady return, with the withdrawal raised 2.0% a year for inflation. Taking 4%, $16,000 a year, at a 5% return lasts 44 years. Social Security or a pension lowers what the portfolio has to pay, so only the gap counts.
| Withdrawal a year | 4% return | 5% return | 6% return | 7% return |
|---|---|---|---|---|
| $12,000 (3%) | 53 years | 60+ years | 60+ years | 60+ years |
| $16,000 (4%) | 34 years | 44 years | 60+ years | 60+ years |
| $20,000 (5%) | 26 years | 30 years | 37 years | 57 years |
| $24,000 (6%) | 20 years | 23 years | 26 years | 32 years |
Every round withdrawal, with the balance year by year and the odds in 1,000 simulated markets: how long $400,000 lasts.
$400,000 by retirement age
Funding $27,000 a year from age 60, $400,000 lasts to 95 in 7% of paths on cautious returns and 8% on Trinity-style returns. Waiting until 70 raises that to 17% and 26%; starting at 50 drops it to 4% and 6%. For 9 in 10 paths to last from 65, spending has to stay near $9,000 to $13,000 a year, which is $750 to $1,083 a month.
| Retire at | Years funded | Lasts: cautious | Lasts: Trinity-style | 9-in-10 spend: cautious | 9-in-10 spend: Trinity-style |
|---|---|---|---|---|---|
| 45 | 50 | 4% | 6% | $5,000 | $8,500 |
| 50 | 45 | 4% | 6% | $5,500 | $9,000 |
| 55 | 40 | 6% | 8% | $6,500 | $10,000 |
| 60 | 35 | 7% | 8% | $7,500 | $11,000 |
| 65 | 30 | 10% | 15% | $9,000 | $13,000 |
| 70 | 25 | 17% | 26% | $11,000 | $14,500 |
Cautious is 5% return, 15% volatility and 2% inflation, a stress case below long-run market history. Trinity-style is the Trinity study calculator's 7%, 12% and 3%.
Retiring with $400,000 at a set age, with Social Security, access before 59½ and health cover before Medicare: at 40, at 45, at 50, at 55, at 58, at 60, at 62, at 65, at 67, at 70.
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Other nest eggs
From 65 on Trinity-style returns, $400,000 holds about $13,000 a year in 9 of 10 paths. $350,000 holds $11,500; $450,000 holds $14,500. Is it enough to retire on $100,000, $150,000, $200,000, $250,000, $300,000, $350,000, $450,000, $500,000, $600,000, $650,000, $700,000, $750,000, $800,000, $850,000, $900,000, $1 million, $1.1 million, $1.2 million, $1.25 million, $1.3 million, $1.4 million, $1.5 million, $1.6 million, $1.75 million, $1.8 million, $2 million, $2.2 million, $2.5 million, $3 million, $3.5 million, $4 million, $4.5 million, $5 million, $6 million, $7 million, $8 million, $10 million?