Can I Safely Retire at 60 Years Old with a $500k Portfolio?

You’ve been saving as much as you can for as long as you can remember, and your portfolio finally crossed that $500k or the quasi-mythical $1 million mark

(And If Not, How Can I retire Now Anyway?)

My personal answer, in about 7-8 years, surprised them. They both felt I should be able to retire much sooner than that. It got me thinking, and when I got back home, I looked at the numbers with fresh eyes.

When Can I Retire?

I could retire today (!), but… I’d have to make some painful choices to cut our expenses, and retirement wouldn’t be as comfortable as I’d prefer. Yet, we could do it.

My conclusion?

What Would It Take for You to Be Able to Retire Now?

As I wrote elsewhere, it’s possible to retire on $500k, $1 million, or $2 million, with certain caveats.

The Center on Budget and Policy Priorities (CBPP) reports that the average Social Security benefit in 2020 was about $18,170 a year.

Here are 3 things you can do to improve things.

What If Your Budget Is Too High to Fit Those Numbers?

First, obviously, cut expenses. Since most of us spend the largest amounts on housing and transportation, moving to a less expensive home that’s close to everything you need most days (shopping, restaurants and cafes, entertainment venues, family, etc.).

Second, you could also consider moving to a country with a much lower cost of living, or traveling between many such countries if you like the nomadic lifestyle.

Third, you could reframe what retirement means to you. If you’re longing to retire to get away from a soul-sucking job or a terrible boss, maybe you can quit and find something you truly enjoy doing, even if it brings in much less than your current salary.

I could retire today, if I’m willing to cut our retirement budget fairly painfully. I could retire in 4-5 years, let alone in 7-8 years without such draconian cuts. If you’re 60 and want to retire now with a $500k portfolio, you may be able to do it, if you can live in retirement on just over $30k a year.

The Bottom Line