I'm Retiring With $300,000. How Can I Make It Last?

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There are some people who manage to get to retirement with millions of dollars saved. On the flip side, there are plenty of folks who retire without so much as a dollar in an IRA or a 401(k).

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If you're approaching retirement with $300,000, you should know that you're actually in a better boat than some. But that doesn't mean you have a lot of money to work with per se. Over the course of a 20-year retirement, a $300,000 nest egg could eventually run out. But with the right strategy, you can do your part to make that money last.

It starts with a safe withdrawal rate

Although $300,000 isn't exactly pocket change, withdrawing from your retirement savings slowly and steadily over time is a good way to make it last. To that end, if you have a fairly equal mix of stocks and bonds in your portfolio, the 4% rule may be appropriate for you. That gives you an initial $12,000 withdrawal your first year of retirement with inflation adjustments in the years that follow.

Budget carefully and make smart changes

Chances are, $12,000 a year won't be enough to cover all of your costs. And hopefully, you have access to other income sources, like Social Security. But if you're trying to avoid dipping further into your nest egg than what your established withdrawal rate allows for, you'll need to budget carefully. And you may want to consider some lifestyle changes.

Housing, healthcare, transportation, and food may be your biggest expenses in retirement. If you can reduce them modestly, it could go a long way.

Downsizing, for example, could lower your housing costs. And if you own a home with equity, you might walk away with sale proceeds you can use to pad your IRA or 401(k).

You don't want to resort to drastic measures to lower your healthcare costs, such as skipping medication doses or delaying important appointments and medical tests. But you can potentially keep your costs down by reviewing your Medicare plan choices carefully every year and making changes when you spot savings opportunities.

If you live in a walkable area, you may also want to run the numbers to see if getting rid of a car and relying on a combination of public transportation, rideshares, and your own two feet results in savings. That may be the case if you still have a car payment and expensive auto insurance.

Finally, eating as many meals as possible at home could help you lower your food costs. And planning ahead could help you save at the supermarket.

Maximize other income sources

If you were born in 1960 or later, age 67 is when you're eligible to collect your monthly Social Security benefits without a reduction. But if you can wait a bit longer, you can boost those monthly checks substantially.

Each year you delay your Social Security claim past that point gives your benefits a permanent 8% increase, up until age 70. If you're eligible for $2,000 a month at 67, waiting until 70 grows your monthly checks to $2,480 apiece. That's a great way to make up for a smaller nest egg.

It could also pay to consider part-time work if your retirement account balance isn't huge. Not only might the extra income be helpful, but if your leisure budget is somewhat limited because you don't have a ton of savings, work could be a great way to keep busy and avoid getting bored.

Don't assume the worst

If you're retiring with $300,000 in savings, you may not be in the strongest financial position, but you're also not in the worst one by far. You still have enough savings to nicely supplement your Social Security checks. And if you manage to keep your costs down, that money could go pretty far.

But it's important to stick to a safe withdrawal rate and spend mindfully if you want that money to last. It's also a good idea to do what you can to boost other income streams so your nest egg doesn't have to cover the majority of your costs.

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