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The average retirement account balance for Americans in their 70s is $250,000, but the median is significantly lower than that.
Once required minimum distributions start at 73, it’s wise to have a plan for your taxes.
You’ve spent decades building your retirement savings. Now comes the part where you make it last. In your 70s, the questions change. It’s no longer about how much you can save—it’s about how much you can safely spend without running out of money.
The average American in their 70s has $250,000 saved, but half have less than $107,000. Whether you’re above or below that line, the real question is the same: Is it enough? The answer depends on more than just your account balance. It’s about coordinating what you’ve saved with Social Security, managing required minimum distributions (RMDs), and timing everything so your money outlasts you—not the other way around.
There’s no single “right” number for your nest egg. The right number is whatever leaves you with enough total resources—savings plus Social Security plus any pensions or other income and assets—to fund your lifestyle, plus whatever inheritance you hope to leave (unless you plan to “die with zero.”)
To figure out how big your retirement savings should be, multiply your estimated annual spending by 25. For example, if you spend $6,000 a month, or $72,000 per year, your nest egg should be $1.8 million.
If you had saved the median balance of $106,654 and followed the classic 4% rule, that would mean you could safely withdraw only about $4,280 per year.
In addition, the average 70-year-old’s annual Social Security benefit is $26,120.
At age 73, RMDs become mandatory for traditional (but not Roth) 401(k) and IRA accounts, whether you need the money or not. Miss the deadline and you’ll pay a penalty of 25% of the shortfall (potentially lowered to 10% if you catch it in time).
Your focus should be on creating an income stream that lasts. Many experts suggest that in retirement, your assets and income should replace 75% to 85% of what your after-tax income was before you retired.
The classic “4% rule” for safe withdrawal rates is still widely used, but its creator, Bill Bengen, has since revised it to 4.7% (with annual inflation adjustments). Following this rule, someone with a $500,000 portfolio would start with $23,500 in the first year.
Prefer flexibility? The “guardrails” strategy adjusts withdrawals up or down based on market performance and supports higher starting rates (closer to about 5%) for many portfolios, while dialing back in down years to protect longevity.
