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Can I live comfortably at 65 with savings of €750,000 and social security of €1,800?

A man reviews his financial plan to determine whether he can retire at age 65.

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Can you retire at age 65 with $750,000 in a Roth IRA and $1,800 in monthly Social Security?

Based on average income and the 10x rule, most people need about $740,000 to fund a secure retirement. So in theory, a $750,000 Roth IRA and $1,800 in Social Security benefits will be enough for many people to retire. But there are many things to consider to ensure long-term comfort during your retirement, depending on your specific circumstances.

A financial advisor can help you plan your retirement. Match with a fiduciary advisor today.

Whether a $750,000 Roth IRA and $1,800 in Social Security will be enough for you depends on your perspective and expectations for retirement, says Tim Mauer, principal advisor at Signature FD.

After all, it all depends on how you manage your money.

Continuing to invest is one of the most overlooked issues in retirement. Suppose you hold this portfolio in cash and withdraw the standard 4% per year. That would give you $30,000 per year for 25 years, or $2,500 per month, plus the $1,800 per month from Social Security. This may be enough to live on, but as CEO of Total Wealth Academy Steve Davis points out, you may not be living particularly well. “Yes, you could retire, but for what?” he said. “Just living paycheck to paycheck. No money for romance, travel or fun. That’s not what the golden years should be.”

“The whole problem is the ineffective belief that you can save your way to retirement,” he added. “It doesn’t work. Once you retire, you pray to die before your money runs out. The effective thing would be to invest that money in income-producing assets such as real estate. Now you have money for romance, travel and fun. Building a second income stream is the way to do that, just like Warren Buffett said.”

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If you need help creating a retirement income plan or identifying new income streams, consider speaking to a financial advisor.

A couple nearing retirement meets with their financial advisor to determine if they can retire at age 65.
A couple nearing retirement meets with their financial advisor to determine if they can retire at age 65.

But investing in income-generating assets can carry additional risk. The more money your portfolio generates, the more exposed you are to risk and volatility. To achieve this, Maurer recommends a so-called ‘bucket’ approach.

“The conversation could start with the question: how much do you need monthly?” he said. “How much income do you want to generate that won’t be exposed to market volatility?”

That’s what he calls the ‘living bucket’. This is the money you put into an annuity or bonds: safe assets that will reliably cover your living expenses. For example, suppose you need $3,000 a month to pay the bills. You put a portion of your Roth IRA into a lifetime annuity that pays $1,200 per month so that, combined with Social Security, you have an indefinite minimum income.

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