Can you retire with $1 million

Summary

Can I retire with $1 million?

How much is enough to retire? Would $1 million cover all your expenses in the post-work phase of your life? Theoretically, yes. It is very possible.

Let's take the below scenario as an example: 

You plan to retire at 60 and place your life expectancy at 90, so you’ll need enough income for 30 years.

With $1 million, assuming your money doesn’t increase or decrease too dramatically in value during those 30 years, you’ll be guaranteed a minimum of $62,400 annually or $5,200 monthly.

For many Americans, $5,200 per month would be more than enough at a time in life when monthly outgoings are at their lowest and large loans such as mortgages are fully paid off, especially with possible supplementary income from sources like Social Security on the table. On average, in 2023, Social Security is $1,782 per person per month. These figures would combine for a total of $6,982 pre-tax.

This figure could be reduced considerably if you planned to retire early, leaving the working world behind at 50 or 55 to extend the length of your peaceful and relaxing golden years. You could also struggle to make the $5,200 figure work in the first place if:

How long will $1 million last in retirement?

As mentioned above, the odds are in your favor that retiring on a million dollars will be possible and viable. However, the length of time it lasts depends heavily on your monthly withdrawals. For example, $1 million will last 30 years if you withdraw $5,200 per month. But the odds are only the odds, and you’ll find that things can change a lot once you start adding variables for retirement age and lifestyle.

The table below shows how long $1 million will last based on monthly and annual withdrawals.

At what age can you retire with $1 million?

Retiring with $1 million is possible, but how long your savings last depends on investment returns, inflation, taxes, and spending habits.

Assuming a 6% annual return, a 20% tax rate, and a life expectancy of 85, the maximum sustainable monthly withdrawal varies by retirement age.

Here is a breakdown of whether you can retire at various different ages, from 50 to 65, with $1 million.

Can you retire at 50 with $1 million?

Retiring at 50 is possible but requires strict financial discipline. With a 35-year retirement horizon, the maximum sustainable withdrawal is about $4,900 per month. Since Social Security won’t be available until at least 62, you'll rely entirely on savings and investments.

Major risks include inflation, market downturns, and high healthcare costs, as you’ll need private insurance until Medicare at 65. Supplementing income through part-time work, rental income, or passive investments can help extend financial security.

Can you retire at 55 with $1 million?

Retiring at 55 is more viable, with a maximum withdrawal of $5,200 per month over 30 years. However, you’ll still need to cover healthcare costs until Medicare at 65, and Social Security won’t start for at least seven more years.

A diversified portfolio and careful spending are essential to protect against inflation and market fluctuations. Having passive income or delaying withdrawals can further improve long-term stability.

Can you retire at 60 with $1 million?

Retiring at 60 allows for a maximum withdrawal of $5,700 per month over 25 years. Social Security will be available within a few years, easing financial pressure. However, healthcare remains a major expense until Medicare kicks in at 65.

A well-structured withdrawal plan, tax-efficient strategies, and investment growth can help ensure your savings last through retirement.

Can you retire at 65 with $1 million?

Retiring at 65 is the most financially stable option, with a maximum withdrawal of $6,400 per month over 20 years. With Social Security and Medicare reducing expenses, your savings can last longer and provide a more comfortable lifestyle.

However, inflation and unexpected costs must still be considered. Optimizing Social Security benefits and minimizing taxes can further stretch your retirement funds.

How much does the average US citizen save for retirement?  

When most people start retirement planning and assessing the amount they’ll need as a retiree, they look to their peers. They ask, “What is the average retirement saving amount in the US?” and aim for this.  

According to data from the Federal Reserve’s ​2019 Survey of Consumer Finances, this is how things break down: 

In actuality, the average only tells you so much. You should pay more attention to ​​your own financial incomings, outgoings and demands. Whether a million dollars is above the average amount saved is irrelevant, to a degree, as it doesn’t determine how much you ideally need to save. 

How much tax will I pay if I retire with $1 million? 

Retirement income taxes will affect you if you have a million dollars or more earmarked for this era of your life. How much you’ll pay will depend on how much you earn overall and how your income comes to you. To summarize: 

How can I increase my savings and protect my $1 million?

Luckily, your existing savings of $1 million puts you in a great place to grow your wealth and increase that total with relative ease – especially if you have some time to play with between now and your hopeful retirement age. You can do this by: 

The bottom line

You should be incredibly proud of your efforts if you’ve already saved a million dollars to fund your retirement.  

You should know how long it might last in various scenarios and be aware of anything else you might need to do to set yourself up for happiness and stability in your golden years. 

If you want further financial advice about retirement, you can connect with an SEC-regulated ​​advisor via Unbiased. Simply answer our five-minute survey, and an advisor perfectly suited to meet your needs will be in touch. Get started here.