Retiring on Just $250,000? Here's What Your Life Might Look Like
- - Retiring on Just $250,000? Here's What Your Life Might Look Like
Maurie Backman, The Motley FoolJanuary 30, 2026 at 11:28 PM
0
Key Points -
The average baby boomer has about $250,000 in retirement savings, per Fidelity.
A nest egg that size, coupled with Social Security, may buy you only a modest lifestyle.
There are steps you can take to boost your retirement income.
The $23,760 Social Security bonus most retirees completely overlook ›
A lot of people dream of building large retirement nest eggs only for life to end up getting in the way of that goal. Case in point: Fidelity reports that as of last year, the average baby boomer had $249,300 saved in a 401(k). Those who've chosen IRAs as their retirement vehicle have an average of $257,002 in those accounts.
What if you end up in a similar boat? To make life easier, let's round the average boomer's retirement savings today to $250,000. Now let's explore what life might look like based on that level of savings.
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Money may be manageable but tight
A $250,000 nest egg could provide you with an annual income of $10,000 if you apply a 4% withdrawal rate to your savings, which many financial experts agree is a safe bet, provided you're retiring at a traditional age and have a fairly even mix of stocks and bonds.
Meanwhile, if we take the average $2,071 Social Security benefit today and multiply it by 12, we get close to $25,000. Adding $10,000 from savings, that brings us to an annual income of $35,000, or around $2,900 a month.
Is that enough? It depends on you.
If you have no mortgage, low property taxes, and generally small expenses, you may be able to cover your costs on that income. But here's what there probably won't be room for:
Travel (other than perhaps to visit with family or friends)
Entertainment you have to pay for (other than perhaps some streaming services)
Surprise home or car repairs (which could arise at any time)
This list could go on and on. The point is that while a $250,000 nest egg is better than none, it may not buy you a comfortable lifestyle once you're done working. So you may want to aim higher and take steps to boost your retirement savings.
How to grow your nest egg
If you're still working, it means you have different opportunities to grow your retirement savings. Some strategies to explore include:
Claiming your full match each year in your 401(k) plan
Saving your raise each year before you get used to spending it
Checking your investments regularly and making sure they're age-appropriate (for example, investing heavily in stocks when you're younger)
Reviewing the costs of your investments and swapping expensive funds in your 401(k) for ones with lower fees
Retiring with $250,000 could mean having to cut corners in a serious way. It pays to aim higher if you don't want to be forced to make a lot of sacrifices after a long career.
The $23,760 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies.
View the "Social Security secrets" »
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Source: “AOL Money”
