I'm Retiring With $200,000. How Do I Not Run Out of Money?

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People are often told that it's important to save well for retirement. But sometimes, building a large nest egg is easier said than done -- especially when mortgage payments, child care costs, and other expenses get in the way.

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If you're retiring with just $200,000 saved, you may be in good company. The median retirement savings account balance among Americans 65 to 74 was $200,000 in 2022, the last year there's data available, according to the Federal Reserve.

You may be worried that a $200,000 IRA or 401(k) will run out quickly. But with the right approach, you may be able to stretch that money as long as you need to.

Establish a safe withdrawal strategy

Although $200,000 isn't a small amount of money, when it may need to last 20 or 30 years, it can seem like it's nowhere close to being enough. But with the right strategy, you can preserve that nest egg rather than spend it down.

Start by considering your asset mix and retirement timeline. If you have a fairly even mix of stocks and bonds and you're looking at a 20- to 30-year retirement most likely, the 4% rule may be safe to use. It has you withdrawing 4% of your savings your first year of retirement and adjusting future withdrawals for inflation.

If you're looking at a shorter retirement, you may be able to adopt a slightly higher withdrawal rate. If you're mostly invested in bonds and very few stocks, you may need to stick to a 2.5% or 3% withdrawal rate. A financial advisor can look at these factors and help you find a withdrawal strategy that's most appropriate.

Find ways to take the pressure off your nest egg

Withdrawals from a $200,000 nest egg may only cover a portion of your retirement expenses if you try to stretch that money. But the more outside income you have, the less likely your money is to run out.

First, consider delaying Social Security. You're eligible for your monthly benefits without a reduction at full retirement age, which is 67 for anyone born in 1960 or later.

But if you delay your claim past full retirement age, your monthly benefits will grow 8% a year until you reach the age of 70. Setting yourself up with larger checks may make it possible to withdraw from your savings minimally.

Next, look at part-time work. It may not be exactly how you envisioned retirement. But the gig economy makes it easier to work flexibly and on a schedule you may find more manageable. And if mobility or access to transportation is an issue, you can focus on jobs you can do from home.

A $200,000 nest egg isn't a ton of money in the grand scheme of retirement. It's also not nothing. With the right plan, you can lower your chances of running out of savings and, ideally, reduce your financial stress in the process.

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