Will a 75 Year Old With $700,000 Have Enough to Live to 95?

RMDs increase as account balances shrink, creating late-retirement sequence risk. A 75-year-old with a traditional IRA and Social Security income faces an initial RMD rate near 4% under the IRS Uniform Lifetime Table, rising to about 8.8% by age 90 and exceeding 11% by age 95. In a hypothetical case with $700,000 in an IRA and total annual withdrawals around $48,455, a 6% net return can keep early growth slightly ahead of withdrawals, with the balance potentially settling around $400,000 to $500,000 by age 95. Inflation reduces purchasing power over time, making the real challenge maintaining spending levels.

"At 75, the IRS Uniform Lifetime Table divisor is 24.6, which works out to roughly 4% of the account. By age 90, the required percentage climbs to about 8.8%. By 95, the divisor drops to 8.9, forcing out more than 11% of whatever remains. The mandated withdrawal rate accelerates exactly when the portfolio has the least cushion to absorb a bad market year. That is the late-retirement sequence risk to be mindful of."

"Let's run the numbers for our hypothetical case. With a 6% net-of-fees return and a total annual draw near $48,455, year one ends around $693,545. Growth slightly outpaces withdrawals in the early years. By age 95, the balance settles around $400,000 to $500,000, with RMDs in the $50,000 to $56,000 range."

"But is a 6% return realistic? With the 10-year Treasury near 4.6% and the 30-year just over 5%, a balanced portfolio can plausibly clear that bar. Inflation is the real opponent. CPI has climbed roughly 8% since early 2024, and core PCE sits at the 90th percentile of its recent range. A static $48,000 draw buys meaningfully less in 2036 than today."

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