I’m 63 With $1.35 Million in My IRA and a $2,200 Social Security Check. What’s My Retirement Budget?

By your 60s, most of your retirement foundation is already in place. While you may still have a few years to save, building significant new wealth is less likely unless you continue working during retirement. This stage typically shifts focus to taxes, withdrawals, Social Security and budgeting. To help you create a retirement budget, let’s walk through an example of a 63-year-old with $1.35 million in a traditional IRA and $2,200 in monthly Social Security benefits.

If you prefer a hands-on approach to retirement planning, a financial advisor who specializes in retirement can help you create a budget for your needs.

The first step in retirement planning is deciding when you want to retire. This choice affects your longevity planning, your required minimum distributions (RMDs) and the timing of your Social Security benefits.

Full retirement age is 67, when you can collect your full Social Security benefits. You can start as early as 62, but your monthly checks will be permanently reduced to as low as 70% of your full benefit¹. On the other hand, if you delay until age 70, your benefits grow to as much as 124%² of your full benefit (8% more for each year you delay past FRA until 70).

You don’t have to retire and claim benefits at the same time. For example, you might stop working at 65 but wait until 67 to collect Social Security. In that case, you would need to withdraw more from your portfolio to make up the income gap until your benefits begin. If you claim Social Security before retiring, your monthly benefits could be reduced while you’re still earning income.

For this example, we will assume you retire and start Social Security at age 67.

If you retire at age 67 and receive about $2,200 per month ($26,400 per year) in Social Security benefits, keep in mind that the maximum benefit at full retirement age in 2025 is $4,018 per month³. Waiting until age 70 increases the maximum to $5,108, while claiming at 62 reduces it to $2,831. The exact amount you receive depends on your earnings history and when you start collecting.

If you are 63 now, you still have four years for your portfolio to compound before retirement, and even modest annual growth can add substantially to a large balance. Those final years often have an outsized effect, since the account is at its peak and percentage gains translate into larger dollar amounts.

Your investment strategy will shape these results. A conservative mix may deliver steadier but smaller returns, while a more aggressive mix could boost growth but expose you to sharper swings. Bear markets typically last almost one year and full recoveries can take two to three years, so a useful way to gauge risk is to ask whether you could delay retirement by 12 to 24 months if markets fall. If the answer is yes, you may be able to tolerate more risk. If that’s not your case, leaning conservative may be the better path.

Let’s walk through an example of a portfolio growing from age 63 to 67 with a 50/50 stock-bond mix and an assumed 8% annual return:

• Starting balance: $1,350,000
• Time horizon: 4 years
• Assumed annual growth rate: 8%

• After Year 1: $1,350,000 × 1.08 = $1,458,000
• After Year 2: $1,458,000 × 1.08 = $1,574,640
• After Year 3: $1,574,640 × 1.08 = $1,700,611
• After Year 4: $1,700,611 × 1.08 = $1,836,660

Result: After four years, the portfolio grows to over $1.83 million.

• Social Security: Around $2,200 per month ($26,400 per year) in this example. For context, the average benefit in January 2025 was $1,976 per month⁴, while the maximum at full retirement age is $4,018 per month.
• Portfolio: About $1.83 million, based on a $1.35 million starting balance growing at 8% annually for four years.

In retirement, your income comes from a balance of three things: how much you withdraw, how much your portfolio earns and how much you pay in taxes. You want enough withdrawals to cover your lifestyle, but not so much that you risk running out of money. It also helps to assume that your withdrawals will rise by about 2% per year to keep up with inflation.

Your retirement plan should account for taxes too. Withdrawals from pre-tax accounts like a traditional IRA are taxed as ordinary income. And Social Security benefits can also be taxed depending on your income.

According to the Social Security Administration, part of your benefits may be taxable depending on your combined income:

• If your combined income is between $25,000 and $34,000 (single) or between $32,000 and $44,000 (joint), up to 50% of your benefits may be taxable⁵.
• If your income is above $34,000 (single) or $44,000 (joint), up to 85% of your benefits may be taxable.

You should note that combined income is calculated by adding together your adjusted gross income (AGI), tax-exempt interest and half of your annual Social Security benefits.

Finally, don’t forget to account for longevity. The Social Security Administration estimates that someone who reaches age 65 today can expect to live about 17 to 20 more years, depending on gender, which can add up to an expected age range between 82 and 85⁶. You can also live longer, so planning to at least age 95 can give you a safer margin.

• Starting balance: $1,350,000
• Annual return assumption: 5%
• Retirement length: 28 years (from age 67 to 95)

• $1,350,000 × 5% = $67,500

Note: This shows what the portfolio could earn in the first year, but withdrawals also need to draw from the account balance and last 28 years.

• Formula: W=PV×r1−(1+r)−nW = dfrac{PV times r}{1 – (1+r)^{-n}}W=1−(1+r)−nPV×r​ where PV = $1,350,000, r = 0.05, n = 28
• (1.05)^(-28) = 0.2386
• 1 – 0.2386 = 0.7614
• 67,500 ÷ 0.7614 = $90,600

So the sustainable withdrawal is about $90,600 per year.

• Social Security = $26,400 ($2,200 x 12) per year
• $90,600 + $26,400 = $117,000 per year

• Starting balance: $1,350,000
• Annual return assumption: 8%
• Retirement length: 28 years (from age 67 to 95)

• $1,350,000 × 8% = $108,000

This is the earnings in the first year, but we need to spread withdrawals across 28 years with compounding.

• Formula: W=PV×r1−(1+r)−nW = dfrac{PV times r}{1 – (1+r)^{-n}}W=1−(1+r)−nPV×r​ where PV = $1,350,000, r = 0.08, n = 28
• (1.08)^(-28) = 0.1039
• 1 – 0.1039 = 0.8961
• 108,000 ÷ 0.8961 = $120,500

So the sustainable withdrawal is about $120,500 per year.

• Social Security example = $26,400 per year
• $120,500 + $26,400 = $146,900 per year

By your early 60s, it’s time to get serious about your retirement budget. This means looking at all the key pieces of your portfolio—returns, taxes, inflation and how long you might live. It may feel like a lot, but the process can be straightforward once you break it down.

• A financial advisor can help you create a plan to manage investments and risks for your portfolio. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors 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.
• If you want to diversify your portfolio, here’s a roundup of 13 investments to consider.

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