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.
FAQs
Part-time work and frugal living could save your retirement
Is 50k a lot in savings? ›
But if you're aiming for a five-month emergency fund and your essential bills come to $10,000 per month, then you're right on track with a $50,000 balance. Similarly, a savings account is a great place to put money you're stashing away for a near-term goal.
How much does the average person have in retirement savings when they retire? ›
Here's how much the average American has in retirement savings by age
| Age Range | Median Retirement Savings |
|---|
| 45-54 | $115,000 |
| 55-64 | $185,000 |
| 65-74 | $200,000 |
| 75 or older | $130,000 |
2 more rowsMay 5, 2024
Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don't match up.
What is the ideal amount of money to retire? ›
By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary. By age 60, your retirement savings goal may be six to 11-times your salary. Ranges increase with age to account for a wide variety of incomes and situations.
Can you 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 percentage of Americans have over 50000 in savings? ›
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. A substantial share of respondents - 17 percent - preferred not to answer. The survey also found that U.S. women were much less likely to have (substantial) savings.
What is considered a good monthly retirement income? ›
The ideal monthly retirement income for a couple differs for everyone. It depends on your personal preferences, past accomplishments, and retirement plans. Some valuable perspective can be found in the 2022 US Census Bureau's median income for couples 65 and over: $76,490 annually or about $6,374 monthly.
What is the average social security check? ›
Social Security offers a monthly benefit check to many kinds of recipients. As of July 2024, the average check is $1,782.74, according to the Social Security Administration — but that amount can differ drastically depending on the type of recipient. In fact, retirees typically make more than the overall average.
How much does the average 70 year old have in savings? ›
The Federal Reserve also measures median and mean (average) savings across other types of financial assets. According to the data, the average 70-year-old has approximately: $60,000 in transaction accounts (including checking and savings) $127,000 in certificate of deposit (CD) accounts.
The 90th Percentile
With a net worth of $1.9 million, retirees in this percentile are deemed well-off, enjoying a lifestyle enriched by extensive savings and investments. This includes bucket-list travels, charitable endeavors and legacy planning.
Does net worth include home? ›
Your net worth is what you own minus what you owe. It's the total value of all your assets—including your house, cars, investments and cash—minus your liabilities (things like credit card debt, student loans, and what you still owe on your mortgage).
Can I retire on $500k plus social security at 62? ›
As we have established, retiring on $500k is entirely feasible. With the addition of Social Security benefits, this becomes even more of a possibility. In retirement, Social Security benefits can provide an additional $1,900 per month, on average. You can start receiving Social Security benefits as early as 62.
Is $2,000 a month enough to retire on? ›
Retiring on a fixed income can seem daunting, but with some planning and commitment to a frugal lifestyle, it's possible to retire comfortably on $2,000 a month. This takes discipline but ultimately will allow you to have more freedom and happiness in your golden years without money worries.
How much does the average person retire with money? ›
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.
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 $50000 considered a lot of money? ›
An annual salary of $50,000 is considered a middle-class income, and can be a comfortable wage for a recent graduate or a person starting a new career.
How long would it take to save 50K? ›
How long will it take to save?
| Savings Goal | If You Saved $200/month | If You Saved $400/month |
|---|
| $50,000 | 250 months | 125 months |
| $60,000 | 300 months | 150 months |
| $70,000 | 350 months | 175 months |
| $80,000 | 400 months | 200 months |
7 more rowsAs soon as you're able, you should consider opening a savings account specifically as an emergency fund. A good rule of thumb is to have three to six months' worth of expenses tucked away in a savings account as an emergency fund.
