Retirement: What $250K vs. $500K vs. $1M vs. $2M in Savings Looks Like in Yearly Spending

Core Insights - The 4% rule serves as a guideline for retirees to withdraw 4% of their savings in the first year and adjust for inflation in subsequent years, aiming to sustain their savings for 30 years [1][2] - The analysis estimates annual spending allowances based on different retirement savings goals, considering a steady inflation rate of 2.9% [2] Retirement Savings Goals - For a nest egg of $250,000, the first-year withdrawal is $10,000, increasing to $12,934 in year 10 and $17,214 in the final year for a 20-year retirement [6] - For a nest egg of $500,000, the first-year withdrawal is $20,000, increasing to $25,868 in year 10 and $34,429 in the final year for a 20-year retirement [7][8] - A $1 million nest egg allows for a first-year withdrawal of $40,000, increasing to $51,737 in year 10 and $68,858 in the final year for a 20-year retirement [13] - For a $2 million nest egg, the first-year withdrawal is $80,000, increasing to $103,474 in year 10 and $137,717 in the final year for a 20-year retirement [14] Social Security Considerations - The average monthly Social Security benefit is $1,955.48, equating to $23,465.76 annually, which can supplement retirees' savings [15]