How Long Will $300,000 Last in Retirement?

How long $300,000 lasts in retirement depends on your lifestyle, lifespan, investments and additional income. Below are key considerations and tips for making $300,000 work in retirement. A financial advisor can also help you plan and save for retirement.

How Long Will $300,000 Last in Retirement?

Making $300,000 last in retirement requires careful planning. While it’s possible, this amount may not be ideal for every lifestyle. The following fictional examples show how outcomes can vary.

Example 1: Modest Living

Edie and Jim, both age 68, own their home in Akron, Ohio. After years of working and saving, they receive $48,000 annually in Social Security. Their $300,000 portfolio earns a 6% return, generating $18,000 in the first year. With monthly withdrawals of $1,000, or $12,000 each year, they withdraw 4% and grow their savings by $5,600 the first year. Their portfolio continues to compound as long as they keep withdrawals low.

Social Security and portfolio withdrawals give them $60,000 a year, which supports a comfortable, modest lifestyle. This estimate accounts for a 3% increase in annual spending, but it doesn’t factor in major expenses or taxes. If their costs stay low, their savings could last more than 40 years

Example 2: Outside their Means

Sal and Pat live in Pensacola, Florida, where they have a mortgage on a condo. They’re the same age as Jim and Edie and receive the same Social Security. However, because their investment portfolio leans conservative, it only delivers a 4% return, or $12,000 per year. Because of their higher expenses, they withdraw $3,000 per month, or $36,000 a year. This means that they’re withdrawing at a deficit of $24,000 every year (which doesn’t include potential inflation increases). That’s a hefty 8% withdrawal rate, double the 4% rule of thumb that guides many retirees.

With this approach, their savings would run out in about 10 years unless they cut expenses or find extra income. Reducing withdrawals or taking part-time work could stretch their nest egg. Even lowering withdrawals to $1,000 monthly for a few years can help their money last longer.

How to Make Your Retirement Savings Last Longer

How Long Will $300,000 Last in Retirement?

Retiring with $300,000 is possible with thoughtful planning and cost management. Maximizing your assets and controlling expenses can help your savings go further. The following tips offer strategies to make retirement savings last longer.

Earn Supplemental Income

Supplemental income is part of most people’s retirement plan. When you retire, you go from having one primary income stream to several streams. These may include your retirement savings, Social Security, pensions, annuities and other income sources.

Many retirees continue to work in some capacity. Part-time jobs, freelance work or consulting can provide income along with mental and social benefits. Passive income from investments, such as rental properties, can add to your retirement income. However, your net income from real estate depends on property value, maintenance costs and location.

Another source of supplemental income is passive income through investments. For instance, say you own some real estate. You can receive passive income in the form of regular, monthly rental payments. How much you receive depends on the costs to maintain the property, the value of the property and how desirable the location is.

Delay Retirement

Delaying retirement can help your savings last longer. Working until 70 instead of 60 allows you to save more and delay withdrawals. Meanwhile, waiting until 70 to claim Social Security increases benefits by 24% over claiming at full retirement age.

However, working full-time can become harder as you age. Balancing lifestyle and retirement timing is a personal decision.

Downsize

Fortunately for many, retirement can really simplify things. No longer do you have to keep up with the hubbub of your career, and if you have kids, they’re most likely out of the house. That makes it the perfect time to downsize. If you own your own home, or have a lot of equity, cashing out this asset may make sense. Downsizing to a smaller, more affordable house can put a large sum of cash into your account. You can invest that cash and use the return to bolster your retirement savings.

Put Your Money in Investments with Reliable Returns

Investing in a range of assets can help grow your savings. Some options carry more risk, but a diverse portfolio can help balance risk and return. Common income-generating investments include:

Annuities: You purchase an annuity from an insurance company, and in return, receive regular payments, usually monthly. Types and risks vary, but annuities are generally considered low risk. Payments continue as long as you are alive.
REITs: Real estate investment trusts own and manage properties, paying at least 90% of profits to shareholders. Well-managed REITs can offer steady returns, but poor management or downturns in real estate can put your investment at risk.
High-dividend stocks: Dividend stocks are a type of security that regularly pay out money to investors. These payouts can range from 1% to 4% of your investment. Check out our list of 10 high-dividend paying stocks.

Bottom Line

Retiring with $300,000 is possible for those who carefully manage spending, explore additional income and consider strategies like working longer or downsizing. While outcomes can vary based on location, lifestyle and market returns, making thoughtful choices can help these savings last. By building a flexible plan and staying attentive to changing needs, many retirees can find ways to make their resources support the years ahead.

Tips for Making the Most of Your Retirement Savings

If you’re unsure how much you should be saving or how to invest, consider talking with a financial advisor. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Wondering how much you should contribute to your 401(k)? SmartAsset’s free 401(k) calculator will help you estimate how much you should have to retire and how much you should be saving.
If you don’t have a 401(k), or want a more complete picture of your retirement savings, use SmartAsset’s retirement calculator to get a solid estimate of how much you need to save.