For a single person retiring at 64 with $1.2 million in a 401(k) and a $2,800 Social Security benefit, guidelines suggest an annual income of $81,600 may cover expenses. However, factors like lifestyle, location, inflation, taxes, and investment returns can impact this. Consider consulting a financial advisor for a personalized retirement budget.

Budgeting for retirement involves balancing income and expenses. Estimating expenses based on averages or specifics of your situation can help determine a realistic budget. Similarly, estimating future income involves guidelines or personal investment preferences to paint a clearer financial picture for retirement planning.

Starting with income, relying on a $2,800 Social Security benefit may be possible, even with potential cuts after 2035. Benefits are indexed for inflation, offering some protection. Delaying benefits can increase monthly amounts, providing a higher income if claimed later, adjusting for cost of living annually.

Considering income from a $1.2 million 401(k), using the 4% rule suggests withdrawing $48,000 in the first year of retirement. Adding this to Social Security benefits can provide a total income of $81,600. However, market volatility, investment fees, and tax implications can impact actual income.

Planning for retirement should account for various factors, such as personal goals, location, housing costs, inflation, healthcare expenses, and taxes. Crafting a budget that considers these uncertainties and allows for flexibility is essential for a secure retirement. Consult a financial advisor for tailored advice on retirement planning.

To accurately estimate future Required Minimum Distributions (RMDs) and handle unexpected expenses, use tools like SmartAsset’s RMD Calculator and maintain an emergency fund. Keeping a liquid fund for emergencies while earning compound interest can help cover unforeseen costs while maintaining financial stability.

Read more at Yahoo Finance: I’m 64 With $1.2 Million in a 401(k) and $2,800 Social Security. How Should I Plan My Retirement Budget?