If you have similar questions about retirement or need help managing your investment portfolio, consider working with a financial advisor<\/a>.<\/p>\n If you don’t already have a good idea of your budget, start by tracking your expenses for a few months. From there, add or subtract items that you know will change when you retire. For example, you may be paying for some work-related expenses or have costs related to your daily work commute that will decrease when you retire. You don’t need an exact figure as long as you’re confident your estimate is reasonably accurate.<\/p>\n Because your income tax liability will likely change, I wouldn’t factor that in here. If your mortgage will be paid off, you can exclude the principal and interest portion of your payment, but you will likely want to keep property taxes and insurance in your estimate.<\/p>\n (And if you\u2019re struggling to estimate your income needs in retirement, speak with a financial advisor<\/a> to see how they can help.)<\/p>\n SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. <\/p>\n Next, you’ll need to compare your estimated retirement budget against your sources of income. In your case, that’s your Social Security benefits and whatever withdrawals you take from your 401(k)<\/a>.<\/p>\n However, there are several things to think about when taking withdrawals<\/a> from your 401(k). In addition to how much you want to withdraw, you should also have a plan forhow you will withdraw that money.<\/p>\n There are many withdrawal strategies<\/a> available, each with its own benefits and risks. These are worth exploring, but for simplicity\u2019s sake let’s assume you use the standard 4% rule<\/a>. This would allow you to withdraw $6,000 in your first year of retirement and then adjust your withdrawals for inflation each year after that. For example, if inflation was 3%, you would increase your withdrawal the following year to $6,180.<\/p>\n Story Continues <\/p>\n Then, add your Social Security benefits. Let’s use your figure of $6,500 per month. That’s $78,000 per year added to your $6,000 withdrawal, giving you a first-year gross income of $84,000. (And if you need additional help mapping out your retirement income sources, consider working with a financial advisor<\/a>.)<\/p>\n Fortunately, not all of the $84,000 will be subject to income tax. Your 401(k) withdrawals would be taxable, but only a portion of your Social Security benefit will be. The formula is a bit complicated, but if your “combined income” is below $32,000 in 2025, none of your benefits would be taxable. (This assumes you and your wife file your taxes jointly.) Combined income is defined as half of your Social Security benefit plus your adjusted gross income<\/a> (AGI) and tax-exempt interest.<\/p>\n If your combined income is between $32,000 and $44,000, up to 50% of the portion over $32,000 is taxable. Above $44,000, as much as 85% of the excess is taxable. In your case, assuming only the income we’ve discussed, about $9,400 of your Social Security would be taxable ($6,000 + $42,000 = $48,000 in combined income).<\/p>\n In this scenario, that gives you a total taxable income of $15,400: $9,400 from Social Security plus $6,000 from your 401(k). That is well below the standard deduction, which rose to $31,500 for married couples after the passage of the One Big Beautiful Bill Act<\/a>. This means you would owe no federal income tax, though you’ll need to estimate your state income tax as well if your state levies one.<\/p>\n (Taxes play a key role in retirement planning, and a financial advisor can help you navigate them. Match with an advisor for free<\/a>.)<\/p>\n Now it’s just a matter of comparing your net income against your estimated budget. If $84,000 per year would cover your expenses and still leave you with a comfortable buffer, you’re likely in a good position. If not, you may want to adjust your plan accordingly.<\/p>\n Whether the above leaves you feeling prepared or like you’re falling short, here are some things you may want to consider:<\/p>\n Social Security: This will likely provide the bulk of your income in retirement. I’d give some serious thought to making sure you were making the best possible filing choices. Delaying past full retirement age<\/a> would allow you to increase your benefit by 8% per year. This isn’t the best choice for everyone, but I’d explore it if you haven’t already.<\/p>\n Healthcare costs: Unplanned medical expenses and long-term care needs can be a major risk factor in retirement. Knowing how you plan to address these ahead of time can reduce their impact. That could be by purchasing long-term care insurance<\/a> or setting aside savings specifically for that purpose.<\/p>\n Home equity: If you plan to own your home outright soon, I think it makes sense to understand how that may help you in retirement. Even if you don’t plan to tap into it, it would be worth knowing how you might be able to use your home equity if the need arose.<\/p>\n Roth conversions: Given your low expected tax liability, carefully consider Roth conversions<\/a>.<\/p>\n (A financial advisor<\/a> may help you with these considerations and potentially find gaps in your retirement plan.)<\/p>\n Depending on your spending needs, you may or may not be able to retire with the income sources you mentioned. Comparing your estimated budget with your expected net retirement income will help you decide if you are truly prepared.<\/p>\n A financial advisor can help you build a tailored retirement plan, adjust it over time, and make informed decisions about withdrawals, taxes and investments. Finding a financial advisor<\/a> doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors<\/a> who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now<\/a>.<\/p>\n Plan the order in which you’ll draw from taxable, tax-deferred and tax-free accounts. A well-sequenced withdrawal plan<\/a> can help lower lifetime tax liability and preserve more wealth.<\/p>\n Brandon Renfro, CFP\u00ae, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.<\/p>\n Please note that Brandon is not an employee of SmartAsset and is not a participant in SmartAsset AMP. He has been compensated for this article.\u00a0Some reader-submitted questions are edited for clarity or brevity.<\/p>\n Photo credit: Courtesy of Brandon Renfro, \u00a9iStock.com\/zamrznutitonovi, \u00a9iStock.com\/lorozco3D<\/p>\n The post Ask an Advisor: We Only Have $150k in Savings but $78k in Social Security and a $650k Home. Can We Retire?<\/a> appeared first on SmartReads by SmartAsset<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"My wife and I are 66 years old. She retired at 62 and is already collecting Social Security.…\n","protected":false},"author":2,"featured_media":82503,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[45,49,48,133,20353,28088,131,132,1705,8496,2438],"class_list":["post-82502","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-ca","tag-canada","tag-finance","tag-financial-advisor","tag-income-tax","tag-personal-finance","tag-personalfinance","tag-retirement","tag-retirement-income","tag-social-security"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/82502","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=82502"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/82502\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/82503"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=82502"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=82502"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=82502"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}} <\/p>\n
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