Here's How Far $1 Million Will Go in Retirement
Key Points
If you have $1 million in savings, you can spend $40,000 in your first year of retirement, according to the 4% rule.
Most people will also get Social Security benefits to help cover their expenses.
Do your best to make regular retirement account contributions each month or pay period.
- The $23,760 Social Security bonus most retirees completely overlook ›
For years, $1 million in retirement savings was the benchmark everyone aimed for. Hitting the seven-figure mark was a sign that you'd made it and were finally ready to step back and reap the rewards of all your hard work.
While $1 million in retirement savings is still a large sum and an achievement to be proud of, a higher cost of living, fewer pensions, and the eroding buying power of Social Security mean that money doesn't go as far as it used to. Here's a closer look at what a $1 million retirement actually looks like.
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What retiring on $1 million looks like
While there are different retirement withdrawal strategies, the 4% rule is arguably one of the most common because of its simplicity. It says you can withdraw 4% of your savings in the first year of your retirement. Then, you adjust this amount annually afterward for inflation. This helps keep your buying power steady over time.
If we apply this to a $1 million nest egg, you would have $40,000 to spend in your first year of retirement. This isn't a lot, but it's possible to live on it in some areas, especially if your home is fully paid off and you're reasonably healthy.
Most people aren't paying for retirement entirely on their own, either. You'll have some Social Security benefits. The average benefit is $2,075 per month as of January 2026. That amounts to $24,900 in annual benefits. If we add this to the $40,000 from personal savings, you would have $64,900 to spend. Married couples eligible for two checks could get even more.
You might also wind up with a higher annual income if you work in retirement or you qualify for a pension. Even if you don't, it's still possible for some people to retire happily on $1 million. But it depends on where you live and the type of lifestyle you want. Some people may need more than $1 million to retire comfortably.
How to save $1 million (or more) for retirement
Saving seven figures for retirement feels intimidating, but you don't have to do it all on your own. You'll invest your savings, so a lot of that money will come from investment earnings, especially if you start saving as early as you can.
Claim as much of your 401(k) match as you can each year, if you're eligible for one. If you don't have access to a 401(k), you can open an IRA and start saving there. Make regular contributions every pay period or month if you can. You might also consider saving year-end bonuses and any tax refunds you receive.
Just make sure you understand the rules for each retirement account you use. Review their contribution limits annually and be careful not to exceed them, or you could face tax penalties.
The $23,760 Social Security bonus most retirees completely overlook
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