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Can You Retire Comfortably on $600,000? Breaking Down the Numbers

When planning for retirement, one question looms large: How much is enough? A recent article from Empower Financial Services sparked discussion by stating that the average retirement balance across their platform is $492,795 as of January 17, 2025. While this figure sounds substantial, the article quickly suggested it’s not enough to retire comfortably. But is that really true? Let’s dive into the data, unpack the realities of retirement savings, and explore what a median balance of $600,000 for 60-year-olds on Empower’s platform can mean for your retirement.

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Who Uses Empower?

Before we analyze the numbers, it’s crucial to understand who Empower’s typical users are. These aren’t your average Americans. Empower’s user base primarily consists of

• Mid-career to pre-retirement individuals (ages 35–65)

• Dual-income, high-earning households with annual incomes of $150,000–$250,000

• Serious savers contribute 15–20% of their income to retirement accounts and often utilizing brokerage accounts for additional investments

This demographic skews wealthier and more financially savvy than the general population. The article’s reported $492,795 average balance reflects users across all age groups, including younger savers still building wealth. However, for 60-year-olds specifically, Empower’s median retirement account balance is closer to $600,000. Compare this to the Federal Reserve’s data, which shows the median investment account balance for Americans in their 60s is around $150,000. Clearly, Empower’s users are not representative of the broader population.

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Can You Retire on $600,000?

The short answer: Yes, absolutely. Many Americans retire with far less than $600,000 and manage to live comfortably. But let’s explore what a retirement built on this amount might look like, considering both investment withdrawals and other income sources like Social Security.

Retirement Spending Needs

According to the Bureau of Labor Statistics, the average annual spending for a retired household is approximately $58,000. However, this figure can be skewed by high spenders. A more realistic median spending range for retirees is $42,000–$50,000. For this analysis, let’s use a target annual spending of $46,000.

Safe Withdrawal Rates

A common guideline for sustainable withdrawals is the 4% rule, though some experts, like Bill Bengen (its creator), suggest you can push closer to 5% annually without depleting your portfolio. Starting with a $600,000 portfolio and a 5% withdrawal rate, you’d generate $30,000 per year from investments alone.

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Social Security Benefits

Social Security plays a significant role in retirement income, and the amount you receive depends on when you claim benefits:

• Age 62: Average benefit of $1,200/month ($14,400/year), which is 70% of the full retirement age benefit.

• Full Retirement Age (67): Average benefit of $1,800/month ($21,600/year).

• Age 70: Average benefit of $2,200/month ($26,400/year), a 24% increase over the full retirement age benefit.

Two-Person Household Scenarios

For a two-person household with $600,000 in investments, here’s how annual income might look based on when Social Security is claimed:

• Claiming at 62: $30,000 (investments) + $14,400 × 2 (Social Security) = $58,800/year

• Claiming at 67: $30,000 (investments) + $21,600 × 2 (Social Security) = $73,200/year

• Claiming at 70: $30,000 (investments) + $26,400 × 2 (Social Security) = $82,800/year

All these scenarios exceed the target spending of $46,000, with the higher end surpassing even the average retiree household spending of $58,000. This suggests $600,000, paired with Social Security, can support a comfortable retirement for a two-person household.

Single-Person Household Scenarios

For a single retiree with $600,000, the numbers look like this:

• Claiming at 62: $30,000 (investments) + $14,400 (Social Security) = $44,400/year

• Claiming at 67: $30,000 (investments) + $21,600 (Social Security) = $51,600/year

• Claiming at 70: $30,000 (investments) + $26,400 (Social Security) = $56,400/year

Even for a single retiree, these figures align closely with or exceed the target spending of $46,000, especially if benefits are claimed at full retirement age or later.

The Power of Multiple Income Streams

Retirement doesn’t always mean a complete stop to income. According to data:

• 79% of retirees have income sources beyond Social Security.

• 56% receive traditional pension plans.

• 42% benefit from interest, dividends, or rental income.

• 32% continue earning through wages, salaries, or self-employment.

Let’s consider a single retiree with $600,000 in investments, claiming Social Security at age 67 ($21,600/year), with additional income from a pension ($800/month = $9,600/year) and part-time work ($1,000/month = $12,000/year). Their total income would be

• $30,000 (investments) + $21,600 (Social Security) + $9,600 (pension) + $12,000 (part-time work) = $73,200/year

To meet a $50,000 annual spending need, they’d rely on investments for only $6,800/year—a withdrawal rate of just 1.13%. At this rate, their portfolio could last indefinitely. Even if they later stop part-time work, they could increase withdrawals modestly without risking depletion.

Retirement Is Personal

While media often suggests you need $1 million or more for a successful retirement, the reality is different. Most retirees have far less and still report high satisfaction. A 2024 survey found 75% of retirees are happier in retirement than when working, and 78% of retirees with $500,000 or more in assets and good health report being very satisfied.

Your retirement success depends on:

• Your expenses: A modest lifestyle requires less than a lavish one.

• Income streams: Social Security, pensions, part-time work, or passive income can reduce reliance on savings.

• Health and fulfillment: Financial security is crucial, but good health and personal satisfaction are equally important.

Rather than chasing a one-size-fits-all number, focus on your unique goals and lifestyle. A $600,000 portfolio, especially when paired with Social Security and other income sources, can absolutely fund a comfortable retirement for many. What’s your vision for retirement? Are you aiming for a specific savings goal or planning to incorporate part-time work or other income streams? Share your thoughts, and start planning for the retirement that suits you.

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