You will often hear that it is important to save systematically in a IRA or 401(k) so you can carry a large amount of savings with you into retirement. But it is difficult to prioritize contributions to a retirement plan when you have a mortgage to pay, children to feed and medical expenses to cover.
If you’re approaching retirement with a nest egg worth $100,000, you’re reasonably on par with today’s average 60-something. Americans in their 60s have an average retirement savings balance of $112,500, Northwestern Mutual reports.
Unfortunately, you may not get a ton of annual income from a $100,000 nest egg. It is therefore important to do what you can to supplement your income according to your needs.
Breaking Down a $100,000 Savings Balance
When you see the number $100,000, it seems like a big number. But remember, this money has to last all along your retirement. And your retirement could easily last 20 or 25 years.
Financial experts have long suggested withdrawing retirement savings at a rate of 4% per year to ensure the money doesn’t run out. But at 4%, a $100,000 nest egg only gives you $4,000 in annual income.
From now on, you will probably also benefit from Social Security. And the average monthly benefit today is about $1,850. By the time you retire, this amount could be even higher. So that’s a good amount of income.
But all things considered, a $100,000 retirement savings balance isn’t a lot of money. So if that’s why you’re considering retirement, you may need to make an effort to work as a senior and get creative with your home.
Your retirement is not necessarily doomed to failure
A $100,000 retirement savings balance is much better than having $0 to your credit. If you are willing to continue working in some capacity and are able to monetize your home at the same time, you may find that you can live quite comfortably as a retiree.
Let’s talk about the first one first. Working in retirement used to mean doing things like taking a boring office job or committing to bagging groceries at a supermarket three days a week. Thanks to the gig economy, working in retirement is now very different.
You can take a hobby you love, like crafting, and turn it into a source of income. Or you can do something like catering or animal care if you enjoy doing that.
Meanwhile, if you own a home as a retiree, you may have the opportunity to turn it into a source of income. Rent a finished basement or garage if you no longer need this space. Or if you have a two-car driveway and only one car, rent out one of your spaces.
You can even rent out parts of your home for storage if you don’t want anyone living under your roof. There are many options to consider.
Retiring with $100,000 is not ideal. But it’s also not a terrible thing, especially if you’re willing to continue to work to some extent and get creative with your living space.
Of course, if you want to prepare to retire with more than $100,000, start early – ideally in your 20s – and try to invest aggressively by stocking up on stocks in your country. brokerage account. But if you’ve already missed this boat, don’t despair, because all is certainly not lost.
Our best stock brokers
We pored over data and user reviews to find the rare picks that landed a spot on our list of the best stock brokers. Some of these top picks offer valuable perks, including $0 stock and ETF commissions. Get started and check out our best stock brokers.