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You have been putting money away for retirement and aren’t sure if $1 million will be enough for you and your spouse. You’re not the only one. A lot of couples aim for this goal, but the real question is: will it really help you get through your golden years?
I’ve spent weeks researching this topic, and what I found might surprise you The answer isn’t a simple yes or no – it’s more like “it depends.” Let’s dive into the factors that determine if $1 million will be your ticket to a comfortable retirement or leave you worrying about finances.
The Reality of the $1 Million Retirement Goal
According to Northwestern Mutual’s 2025 Planning and Progress Study, many Americans believe they need about $126 million to retire comfortably. But truth be told, some couples can make do with less, while others might need more.
When my wife and I started planning our retirement, we quickly realized that $1 million might be sufficient for some couples but potentially inadequate for others. It all boils down to several key factors:
- Where you live (geography matters – a lot!)
- How long you’ll live (sorry to be morbid, but longevity affects your finances)
- Your lifestyle choices (champagne taste or beer budget?)
- Healthcare costs (the unpredictable budget-buster)
- Long-term care needs (often overlooked but potentially expensive)
- Other income sources (Social Security, pensions, etc.)
- Your investment strategy (asset mix and risk tolerance)
- Inflation (the silent retirement killer)
Four Different Couples, Four Different Outcomes
What really opened my eyes was a fascinating study from Modern Wealth Management that compared four different couples all with exactly $1 million in savings and identical earnings histories. You’d think they’d all have the same retirement experience right? Wrong!
They looked at:
- The Average Couple – Traditional 401(k) savers who claim Social Security at 62
- The Investing Couple – Those who invested outside retirement accounts
- The Ideal Couple – Diversified across tax-deferred, tax-free, and taxable accounts
- The Unicorn Couple – The rare birds with all their money in Roth IRAs
The differences in their retirement outcomes were shocking. Let me break it down for ya:
Yearly Spendable Income Comparison
| Couple Type | Annual Spendable Income | Lifetime Additional Income |
|---|---|---|
| Average Couple | $84,000 | Baseline |
| Investing Couple | $86,500 | $104,321 more |
| Ideal Couple | $91,500 | $312,962 more |
| Unicorn Couple | $95,750 | $479,874 more |
And when they added Social Security maximization strategies (instead of just claiming at 62), the numbers got even better:
| Couple Type | Lifetime Additional Income with Maximized Social Security |
|---|---|
| Investing Couple | $408,000 more |
| Ideal Couple | $521,000 more |
| Unicorn Couple | $657,000 more |
Those aren’t small differences! We’re talking about potentially hundreds of thousands of dollars in additional spendable income over your retirement – just by changing HOW you save and WHEN you claim Social Security.
The 4% Rule and Other Withdrawal Strategies
To decide if $1 million is enough, you need to know how to take money out. The classic approach is the 4% rule.
When you start investing, you take out 4% of your initial portfolio in the first year ($40,000 from a $1 million nest egg), and then you adjust that amount every year for inflation. This strategy assumes your money will last about 30 years.
But there are other approaches:
- Dynamic Spending – You adjust withdrawals based on portfolio performance (take less in down markets, more in good years)
- Bucket Strategy – Segment your money into different time-based “buckets” with varying risk levels
My financial advisor suggested we consider a combination approach, which made sense to us. You can’t be too rigid when it comes to retirement planning!
Geography Matters More Than You Think
Where you decide to plant your retirement flag makes a HUGE difference in how far that million bucks will stretch.
Living in a high-cost area like San Francisco or New York? That $1 million might not last as long as you hope. But move to a more affordable locale, and suddenly your retirement outlook brightens considerably.
When my friend Rick retired, he moved from Boston to North Carolina. He tells me it was the best financial choice he’s ever made. Because of cheaper housing, property taxes, and the overall cost of living, his retirement savings go a lot further.
The Tax Diversification Game-Changer
One thing that really jumped out at me from the research was how much tax diversification matters. Having your retirement money spread across different types of accounts can make a substantial difference:
- Tax-deferred accounts (traditional 401(k)s and IRAs) – Taxed when you withdraw
- Tax-free accounts (Roth IRAs and Roth 401(k)s) – No tax on qualified withdrawals
- Taxable accounts (regular brokerage accounts) – You pay capital gains tax on growth
The “Ideal Couple” with money spread across these three buckets could spend nearly $7,500 more annually than the “Average Couple” with everything in traditional retirement accounts. That’s a significant upgrade in lifestyle!
Social Security: The Often Misunderstood Piece of the Puzzle
Many folks think claiming Social Security at 62 (the earliest possible age) is the way to go. “Get it while you can!” they say. But for many couples, this is a costly mistake.
The study showed that Social Security maximization strategies could add anywhere from $11,500 to $15,750 in additional annual income for couples. Over a lifetime, that’s up to $657,000 more in spendable income!
I remember my uncle claiming Social Security as soon as he turned 62. Five years later, he admitted it was one of his biggest regrets. By waiting, he could have secured a much larger monthly check for life.
Real-World Examples: Can $1 Million Work?
Let’s look at two hypothetical couples to see how this plays out in real life:
Couple A: The Homeowners
- Own their home outright
- Need about $55,000 annually for expenses
- Receive $40,000 combined from Social Security
- Only need to withdraw $15,000 (1.5%) from their savings each year
- Verdict: $1 million is likely MORE than enough!
Couple B: The City Dwellers
- Rent in a high-cost metro area
- Need $90,000 annually for expenses
- Receive $50,000 combined from Social Security
- Need to withdraw $40,000 (4%) from their savings each year
- Verdict: $1 million might NOT be enough for a 30+ year retirement
The Inflation Factor
We can’t ignore inflation when talking about retirement planning. Even a modest 3% inflation rate can significantly erode purchasing power over a 20-30 year retirement.
That $40,000 withdrawal in year one? In 20 years at 3% inflation, you’d need about $72,000 to have the same buying power. This is why your investment strategy matters so much – your money needs to grow to outpace inflation.
Healthcare: The Unpredictable Budget-Buster
According to Fidelity’s 2024 Retiree Health Care Cost Estimate, an average 65-year-old retiring last year could need $165,000 in after-tax savings just to cover healthcare costs in retirement. And that doesn’t include long-term care, which could cost more than $127,000 a year for a private nursing home room!
Medicare helps, but it doesn’t cover everything. We learned this the hard way when my mother-in-law faced significant out-of-pocket costs despite having Medicare.
So… Can a Couple Retire on $1 Million?
After digesting all this information, here’s my take:
Yes, a couple can retire on $1 million – but with some important caveats:
-
It works best if you:
- Own your home (preferably mortgage-free)
- Live in a moderate or low-cost area
- Have good health insurance
- Maximize your Social Security benefits
- Have diversified your savings across different tax buckets
- Maintain a reasonable lifestyle
-
It might not be enough if you:
- Have a mortgage or rent in an expensive area
- Want an extravagant lifestyle
- Face significant health challenges
- Retire very early (before Social Security eligibility)
- Keep all your money in tax-inefficient accounts
- Face higher-than-average inflation
Final Thoughts: It’s Not Just About the Number
What I’ve discovered through this journey is that successful retirement isn’t just about hitting a specific number. The $1 million mark is a good target, but HOW you save that money and HOW you withdraw it are equally important.
Smart planning – incorporating tax diversification, Social Security maximization, and thoughtful withdrawal strategies – can potentially add hundreds of thousands of dollars to your retirement lifestyle, even if you’re starting with the same amount as someone else.
My advice? Work with a financial advisor who understands these nuances. The strategies they help you implement could be the difference between just getting by and truly thriving in retirement.
Remember, retirement planning isn’t a one-size-fits-all proposition. Your retirement is unique to you, and with careful planning, that $1 million might be more than enough to fund the retirement of your dreams.
Have you started your retirement planning? Where are you on your journey to that $1 million goal? I’d love to hear your thoughts and experiences in the comments!
Is $1 million enough for retirement? 3 steps to tell
Depending on how much money you make and how much you spend, a cool million may or may not be enough to fund your retirement. There’s no amount of money that can’t be outspent, so keeping a happy medium between your spending and income must remain an exercise in self-control.
Calculate your retirement income from other sources
Whether $1 million suffices for retirement depends a lot on your other sources of income, too. People who are retired can get steady payments from Social Security and may also have a pension. However, most companies no longer offer retirement plans.
Once you have your budget, you can figure out how much you need to take out of that $1 million fund to make it work. Start with your guaranteed sources of income such as Social Security, annuities and other payouts. Patzer offers an example.
“Let’s say a married couple makes $72,000 a year from Social Security and pensions,” he says. “They need $100,000 a year to live comfortably. They would be fine living on $1 million saved, as they would only need to draw $28,000 a year from their investments.”
The average Social Security check for retired workers comes to about $1,981 per month as of February 2025, providing around $23,800 each year before you even begin to touch your retirement savings. That payout may rise over time with Social Security’s annual cost of living adjustment.
Add in a spouse’s potential contributions from Social Security or other sources. From there, you’ll have the difference that your $1 million bankroll has to fund for the both of you.
But that $1 million shouldn’t be a static amount. It should be invested to produce income, and you may well earn enough to cover not only the necessary gap but also increase your nest egg.
“You’ll want to ensure your investments are diversified and appropriately balanced to generate income, while protecting against market volatility,” says Patzer.
Retirees could invest in some of the best dividend funds, for example, which hold dozens and even hundreds of different stocks. In contrast, the best bond funds may offer steady income with less potential for gain over time. Of course, retirees can split the difference here, too, with money invested in both steadier, higher-yielding bonds and more volatile but faster-growing stocks.
“Another key point is not to have all your assets in one type of investment,” says Delgado. “The market fluctuates and you need to be prepared and protected against those down times.”
Invested well, your $1 million may continue to grow even while you tap it for income each year. Working with a financial advisor can help you get your retirement income on track, and Bankrate offers a financial advisor matching tool to match clients with advisors in minutes.
Can a couple retire at 60 with $1 million?
FAQ
Can a married couple retire on 1 million dollars?
“Let’s say a married couple makes $72,000 a year from Social Security and pensions,” he says. “They need $100,000 a year to live comfortably. They would be fine living on $1 million saved, as they would only need to draw $28,000 a year from their investments. ”.
What percentage of retired couples have 1 million dollars?
Only 3. 2% of retirees have $1 million in retirement accounts vs. about 2. 6% of Americans in general. The average retirement savings for households aged 65-74 is $609,000, while the median is only about $200,000.
Is two million enough for a couple to retire?
“Two million dollars is usually enough to retire well if you have a plan for your money that takes into account your spending, assets, income, and the way of life you want to live.”
At what age can you retire with $1,000,000?
Summary. $1 million should be enough to see you through your retirement. You can retire at 50 with $1 million in savings and receive a guaranteed annual income of $62,400.
Can you retire on 1 million?
Can You Retire on $1 Million? Yes, it’s possible to retire on $1 million today. In fact, with careful planning and a solid investment strategy, you could possibly live off the returns from a $1 million nest egg.
Is 1 million enough savings for retirement?
Many people think $1 million is sufficient savings for retirement. How long $1 million will last depends on how much a retiree spends on housing, health care and other expenses. Retirement savings can be supplemented with other income, such as Social Security and pensions, to make them last longer.
Will $1 million buy you in retirement?
If things get back to normal soon, $1 million will buy the same things as $1 million a year ago. 8 million two decades from now. 4. This means that if you want to retire in 20 years, you might need an extra $800,000 in the bank to live the way that $1 million would buy you now.
Can you retire with dignity on $1 million today?
Let’s be clear—with careful planning and a solid investing strategy, it is absolutely possible to retire with dignity on $1 million today (no matter what some blogger writing from their mother’s basement might try to tell you)! How? Let’s break it down.
How can I stretch my $1 million in retirement?
Other strategies to boost savings include minimizing taxes, cutting expenses and looking for low-fee investment options. However you reach your goal, with careful planning and expert guidance, you may be able to stretch your $1 million or more across a decades-long retirement.
How much money do you need to retire comfortably?
Bankrate principal writer and editor James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. One in three Americans in the workforce say they need more than $1 million to retire comfortably, but is even that amount of income enough?