I get a lot of questions about whether or not someone has enough money saved up to retire. This video explains how I walk through the evaluation and the questions I ask to arrive at that answer for a sample situation.
Take a look at the video below and find out what I think.
Hi and thanks for asking this question! Unfortunately, you didn’t provide me with enough details to really answer your question, so I’m going to have to make some educated guesses. First, though, let’s go through some of the questions you need to consider when looking at this question.
Are you married? This affects both your potential retirement income, via Social Security, and your expenses.
Are you eligible for Social Security? How much does the Social Security Administration say that you would get at Full Retirement Age, which is 66 years and 8 months in your case?
What are your monthly expenses?
Do you have other sources of income?
Do you have any health problems?
Do you have a family history of health problems?
What insurance do you have?
What is the $920,000 invested in?
What are you doing between now and age 66?
Historically, the rule of thumb has been that a 4% withdrawal rate in retirement would be sufficient for you to ensure that you didn’t run out of money. That would be $36,800 per year, which would probably be almost all after-tax. However, some researchers such as Dr. Wade Pfau are suggesting that the 4% rule is too aggressive. If you’re planning on retiring today, then I’d agree with him and adjust that number downwards. A 3.5% withdrawal rate would provide you with $32,200 of annual income, and a 3% withdrawal rate would provide you with $27,600 of annual income.
Depending on your situation, you could be OK, close, or need to continue working and saving more. I’d advise you to see an hourly, fee-only financial planner to get an evaluation. It shouldn’t cost you too much, and you’ll have a lot more certainty and peace of mind.