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You\u2019ve hit your late 50s, you\u2019ve got a nice cushion in your 401(k) and suddenly you find yourself wondering if that cushion will provide you with enough comfort to retire today.<\/p>\n
The promising news is that yes, you may be able to retire today at 58 years old with $970,000 in your 401(k). But you\u2019ve got enough life experience now to know there\u2019s always a bit more nuance than that.<\/p>\n<\/p>\n
Retiring earlier means you\u2019ll need to wait several years before you can start claiming Social Security benefits and be eligible for Medicare. And it means needing a solid plan on your retirement expenses, health care and even taxes.<\/p>\n
Don\u2019t have that all set in stone? Then you may have to delay retirement.<\/p>\n
Here\u2019s what to consider before handing in your notice.<\/p>\n
Deciding if it\u2019s possible for you to retire will depend on whether you have a clear idea of how you\u2019ll cover your expenses if you stop working. Since you can\u2019t claim Social Security benefits just yet, the $970,000 in your 401(k) needs to be truly enough to cover all of your expenses until you can.<\/p>\n
Many retirees use a common retirement budgeting tactic, the 4% rule, to ensure there\u2019s enough money from their retirement accounts when making withdrawals, even when adjusted for inflation. With $970,000 in a 401(k), you can typically withdraw $38,800 each year before taxes. Of course, your retirement income may be higher if you have more assets held in other retirement accounts.<\/p>\n
A financial advisor can help you break down your total expenses and determine how much you need to withdraw each month to sustain your lifestyle. According to Vanguard research, people who consult with financial advisors see a 3% increase in net returns than those who don\u2019t.<\/p>\n
Advisor.com<\/a> can help you connect with a vetted financial advisor near you for free. The online platform combs through its database of thousands to match you with an SEC\/FINRA-certified expert best suited to your needs.<\/p>\n You can read through their profile and client reviews and set up a free introductory call<\/a> with your matched advisor with no obligation to hire to see if they\u2019re the best fit for you.<\/p>\n Story Continues <\/p>\n Evaluating your fixed expenses also plays a huge role in retirement planning, especially if you have high debt.<\/p>\n Still want to retire early? Here\u2019s where getting crystal clear comes in handy: if you\u2019re not clear on your income and expenses, now and years in the future, you could be at risk of running out of money.<\/p>\n As in, it\u2019s still possible to make it work if you\u2019re willing to get creative with how you can afford it.<\/p>\n If you want to make early retirement work for you with less than a million in the bank, you\u2019ll have to cut down on your expenses. One area where you might be able to cut down costs is auto insurance.<\/p>\n Car insurance premiums rose by 16.50% on average in 2024, and are expected to rise further by 7.50% in 2025, according to a report published by ValuePengiun.<\/p>\n This doesn\u2019t mean you can\u2019t reduce your monthly premiums. Research shows that shopping around for car insurance rates can help you save nearly $400 a year.<\/p>\n OfficialCarInsurance<\/a> is an online marketplace that lets you compare auto insurance rates offered by leading providers like GEICO, Allstate, and Progressive, and others. You can customize your search by entering the make and model of your car, driving history, and zip code \u2014 helping you find the lowest rate possible<\/a>.<\/p>\n The best part? The process is 100% free and won\u2019t impact your credit score.<\/p>\n