From Yahoo Finance: 2025-03-29 08:30:00

Derick, a retired military member, seeks advice on covering $3,000 in monthly living expenses with $700,000 in retirement savings and no Social Security for 7 years. A financial advisor suggests leveraging the 4% rule to withdraw $28,000 annually, ensuring enough funds. Delaying Social Security until full retirement age could further boost financial security.

At 58, Derick faces a penalty for early withdrawals from his retirement accounts. With $800 monthly deficit, he may tap into his checking/savings accounts or Roth IRA to bridge the gap until age 59.5. The 10% penalty for traditional IRA withdrawals is an option but may not significantly impact his finances.

Derick’s estimated Social Security benefit at age 62 is $959 per month, potentially covering his deficit. Delaying benefits could increase the monthly payout. With sufficient retirement funds, Derick is advised to consider various options and consult a financial advisor for personalized guidance.

Maintaining an emergency fund is essential for unexpected expenses. Derick can compare savings accounts for higher interest rates. Financial advisors can utilize SmartAsset AMP to connect with leads and grow their business efficiently. Matt Becker, CFP®, offers financial planning advice and answers reader questions on personal finance and tax topics.

Read more: I’m 58 With $700k in Savings. How Can I Cover $3,000 in Monthly Expenses Until Social Security?