You'll often hear that it's important to consistently fund an IRA or 401(k) over time. And the sooner you begin putting money into one of these accounts, the more opportunity you'll have to benefit from investment gains.
But maybe it was a struggle for you to build retirement savings. Maybe you had to cope with stagnant wages, expensive medical bills, and other costs that got in the way of building a large nest egg.
If you're nearing retirement with just $50,000 in savings, the reality is that you're frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn't a ton of money.
So if you have less than half of that, you'll need to be very careful about managing your cash reserves. But you should also know that you're not doomed to a cash-strapped retirement just because you only happen to have $50,000 socked away.
Don't forget about Social Security
Many people struggle to live on Social Security alone in retirement. But the reality is those benefits might help sustain you to a large degree.
The average senior on Social Security today collects $1,848 a month. That's over $22,000 a year. Even if you're only taking a few thousand dollars a year out of your savings because that's all you can afford, there's still another steady source of income you can fall back on.
Part-time work and frugal living could save your retirement
The long-time convention was to stick to a 4% withdrawal rate for retirement savings. So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you're willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.
You might also need to make some frugal choices in retirement to compensate for not having a ton of savings. That could mean downsizing to a less expensive home or limiting yourself to local travel instead of taking big trips.
You may also need to be mindful of smaller expenses, too. If money is tight, you may have to stick to one streaming service instead of having multiple. And you might have to mostly cook your own food rather than dine out regularly.
But that doesn't have to lessen your quality of life. If you learn to embrace those things, you can make the best of a limited income. That could, for example, mean broadening your cooking horizons and exploring new recipes you're excited to eat.
In an ideal world, you'd be retiring with a lot more money than $50,000. But if that's all you have to work with, don't assume the worst. With some reasonable lifestyle adjustments, you can set yourself up to enjoy a fulfilling retirement, even if you have to limit your spending.
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FAQs
If you're nearing retirement with just $50,000 in savings, the reality is that you're frankly not in the best shape. The average 60-something has a retirement savings balance of $112,500, according to Northwestern Mutual. Even that, frankly, isn't a ton of money.
Is 50k a lot of money in savings? ›
Is $50k a lot of savings? $50k is a lot of savings and definitely an important milestone to celebrate. However, 50k will not be enough to sustain you in retirement, so it's important to find ways to invest and continue to grow that 50k.
What does the average person retire with in savings? ›
The average retirement savings for all families is $333,940, according to the 2022 Survey of Consumer Finances. The median retirement savings for all families is $87,000. Taken on their own, those numbers aren't incredibly helpful. After all, not everyone who is the same age will retire at the same time.
What if I have no enough money to retire? ›
You can still live a fulfilling life as a retiree with little to no savings. It just may look different than you originally planned. With a little pre-planning, relying on Social Security income and making lifestyle modifications—you may be able to meet your retirement needs.
How much should a retiree keep in savings? ›
By age 50, you would be considered on track if you have three-and-a-half to six times your preretirement gross income saved. And by age 60, you should have six to 11 times your salary saved in order to be considered on track for retirement.
Can I retire with 50k in savings? ›
So for a $50,000 nest egg, that would mean $2,000 of retirement income a year. Even with a decent chunk of cash from Social Security, that may not be enough to live on. But if you're willing to work part-time in retirement, you may find that you can get by quite well thanks to that added income.
What percent of Americans have over 50k in savings? ›
Personal Savings in the U.S.
18 percent said their saving were at least $1000 but under $10,000, while 11 percent each had $10,000 to $49,999 and $50,000 or more saved up.
What happens when retirees run out of money? ›
Retirees who run out of money may be forced to rely on family members for financial assistance or government programs like Medicaid or Supplemental Security Income (SSI). This can be a significant burden on family members and can cause emotional distress for the retiree.
How to retire at 60 with no money? ›
Get a Part-Time Job or Side Hustle. If you're contemplating retirement with no savings, then you may need to find ways to make more money. Getting a part-time job or starting a side hustle are two ways to earn money in your spare time without being locked into a full-time position.
What is a good amount to have in the bank when you retire? ›
By age 40, you should have accumulated three times your current income for retirement. By retirement age, it should be 10 to 12 times your income at that time to be reasonably confident that you'll have enough funds. Seamless transition — roughly 80% of your pre-retirement income.
Average Monthly Retirement Income
According to data from the BLS, average 2022 incomes after taxes were as follows for older households: 65-74 years: $63,187 per year or $5,266 per month. 75 and older: $47,928 per year or $3,994 per month.
What is a comfortable retirement income? ›
They estimated that a single person needed £14,400 a year for a minimum income, and £43,100 a year for a comfortable retirement. Couples required a joint £22,400 at the minimum level, £43,100 at a moderate level, and £59,000 at a comfortable level.
At what age should you have 50k saved? ›
Here's how much cash they say you should have stashed away at every age: Savings by age 30: the equivalent of your annual salary saved; if you earn $55,000 per year, by your 30th birthday you should have $55,000 saved. Savings by age 40: three times your income. Savings by age 50: six times your income.
Is 50k saved at 30 good? ›
If you're looking for a ballpark figure, Taylor Kovar, certified financial planner and CEO of Kovar Wealth Management says, “By age 30, a good rule of thumb is to aim to have saved the equivalent of your annual salary. Let's say you're earning $50,000 a year. By 30, it would be beneficial to have $50,000 saved.
How much will $50,000 make in a high yield savings account? ›
5.5% APY: Choosing a 5.5% CD or high-yield savings account will result in $2,750 in interest on your $50,000 investment annually. 5.75% APY: A 5.75% CD or high-yield savings account will earn you $2,875 in interest in one year.
