"Assuming that you follow the 4% rule, which is a common method of deciding on a safe withdrawal rate, you would be able to access 4% of your $250K in year one of retirement and then adjust up for inflation - and you could do this without running a huge risk of draining your accounts. This would mean you'd have around $10,000 in income from your retirement investment accounts."
"Of course, this is an "easier" path to take during your working years, as you don't have to save a lot to end up with $250,000. If you start investing at age 30, retire at 65, and earn a 10% average annual return, you could end up with a $250K nest egg if you invested just $76.87 per month. That's an amount almost everyone can come up with."
Retiring with $250,000 produces roughly $10,000 in the first year if withdrawing at a 4% safe withdrawal rate and adjusting for inflation thereafter. Social Security commonly replaces about 40% of pre-retirement earnings, while a common recommendation is to replace about 80% of pre-retirement income; therefore a $250,000 nest egg will be insufficient for workers who earned above roughly $25,000 annually. Accumulating $250,000 over 35 years can require surprisingly small monthly contributions if investment returns average 10%; starting at age 30 and retiring at 65, a $76.87 monthly contribution could reach $250,000.
Read at 24/7 Wall St.
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