I'm Retiring With $200,000. Am I in Good Shape?

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It's an unfortunate thing that many Americans approach retirement with no savings at all. So if you're sitting on $200,000 in your name, you might assume you're in pretty decent shape.

The median retirement savings balance among Americans aged 65 to 74 is actually $200,000, according to data from the Federal Reserve. So if that's the sum you're retiring with, you're in good company. However, you're not necessarily in the best financial shape.

A $200,000 nest egg may not go so far

There's no denying that $200,000 is a lot of money. But if you're retiring on that sum alone, you may not get as much annual income from your savings as you'd want.

For years, financial experts have recommended that people withdraw 4% of their savings balance their first year of retirement and adjust future withdrawals for inflation. Doing so with a nest egg of $200,000 gives you about $8,000 a year from your individual retirement account (IRA) or 401(k) -- or whatever account is housing your savings.

Meanwhile, the average retired worker today gets about $1,918 per month from Social Security. That's roughly $23,000 per year. If you add in another $8,000 from savings, you're looking at an annual income of $31,000.

That may be enough money to live on if you have few expenses and minimal needs. But if you still have a mortgage to pay or a lot of healthcare expenses, you might struggle on that sort of yearly income. So while retiring with $200,000 is certainly better than retiring with $0, you may have a hard time living comfortably with that balance unless you take steps to supplement your income, like working part-time.

How to retire with way more than $200,000

It's clear that many older Americans are retiring with something in the ballpark of $200,000 per the Fed's findings. But with the right strategy, you can set yourself up with a much larger nest egg. In fact, all you really need to do is:

• Start saving consistently from a young age
• Invest heavily in stocks for strong returns in your portfolio

Let's see how this strategy might pan out. Imagine you start socking money away for retirement at age 27 and end your career at 67 for a total savings window of 40 years. Let's also assume you're able to set aside $100 per month and your investment portfolio delivers an average annual 9% return, which is a notch below the stock market's average of 10%over the past 50 years.

In that case, you're looking at a nest egg worth about $405,000 -- about double the $200,000 median retirement savings balance among older Americans. And you're also not parting with a huge amount of money on a monthly basis. Rather, you're saving $100 per month, which may be a more than reasonable sum even if you earn a modest salary.

Furthermore, let's say that in the above example, you save $200 per month instead of $100. That leaves you with about $811,000, assuming the same 40-year window and 9% return.

You're not automatically in the worst shape if you retire on $200,000. But with a little extra effort, you can set yourself up with a lot more savings than that.

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