A $600,000 Nest Egg Puts Retirement at 60 Within Reach
The couple saves $64,000 a year, but investment returns, spending needs and health coverage will shape whether leaving work at 60 is realistic.
A couple earning $260,000 a year says they hope to retire at 60, with 20 years to build on their $600,000 in retirement savings. Their plan looks possible, but it depends on investment growth and how much they will spend.
In a Reddit post, the couple said about $540,000 is in 401(k) accounts and $60,000 in Roth IRAs. They contribute $64,000 a year, before employer matches, and expect to pay off their mortgage by retirement.
Their retirement calculators project more than $5 million, using a 7% annual return after inflation. A simplified estimate puts their balance near $5 million after 20 years at that rate, or about $3.7 million at a 5% real return. Both estimates assume contributions rise with inflation and exclude employer matches.
At a 3% annual withdrawal, a $5 million portfolio would provide about $150,000 before taxes. But that rate is a planning assumption, not guaranteed income, and the couple has not shared a detailed retirement budget.
Their current income is not the right spending target by itself. They expect to stop saving for retirement and finish mortgage payments, which together account for substantial outlays now. Property taxes, home repairs, travel and replacing cars would still need to fit the budget.
Health coverage is another major cost: Medicare generally starts at 65, leaving a five-year gap if they stop work at 60. Social Security retirement benefits can start at 62, though starting before full retirement age reduces benefits; for people born in 1960 or later, full retirement age is 67.
Account access should be less of a hurdle at 60. The IRS generally waives the 10% additional tax on eligible retirement-plan withdrawals after age 59½, although regular income taxes can still apply.
The couple also reported a $72,000 emergency fund, separate from retirement accounts, and employer matches on both spouses’ plans. Their goal looks achievable if they keep saving and manage spending, but a weaker market, higher health costs or a more expensive lifestyle could change the math.
This article was produced with the help of AI technology.
Source: Yahoo Finance
