Can You Retire Comfortably on $1 Million? (Hint: Maybe Not)

Having $1 million to your name is a massive accomplishment, and it's one you should be proud of if you've managed it. But it's also important to acknowledge that $1 million today isn't the same as it was even 10 years ago.

Inflation continues to drive up costs, and that $1 million might not go as far as you expect it to. Here's a closer look at what a $1 million retirement actually looks like, using one of the most popular withdrawal strategies.

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$1 million may be enough for a modest retirement for some

The 4% rule is a common approach to help you stretch your retirement savings out over 30 or more years. In the first year of your retirement, you withdraw 4% of your savings, and then you adjust this amount for inflation each year thereafter.

If you did this with a $1 million nest egg, then you'd only be able to spend $40,000 in the first year of your retirement. Even today, that's not very much money, especially in some more expensive cities. That money will cover even less in the future.

Fortunately, you'll probably get money from Social Security as well. The average monthly benefit as of May 2026 is $2,083. That adds up to just under $25,000 per year. Combined with your $40,000 in personal savings, you're sitting at a slightly more comfortable $65,000 per year. If you're married, you could have even more than this. Double the average Social Security benefit, and your annual retirement income would jump to $90,000 per year.

That's looking more reasonable for those who hope to have a comfortable retirement, but again, a lot depends on where you live and how you envision retirement. If you plan to travel often or have a second home, this might not be enough to cover the costs.

What to do if you're worried $1 million may not be enough for you

If you're worried that $1 million may not provide the lifestyle you want in retirement, the ideal strategy is to increase your savings rate. Saving $1.5 million or $2 million before retiring will significantly increase how much you can safely withdraw annually. But it also means forgoing more money in the present, and that's not feasible for everyone.

You could also consider keeping a job in retirement to supplement your personal savings. Some seniors actually prefer this to a traditional retirement because it gives them a sense of purpose and an opportunity to socialize. You're free to choose something that's more flexible or more in line with your interests than what you did your entire career, so it feels less like work.

Or you could just wait a little longer to retire to give yourself more time to save. Your retirement will be shorter, but you'll be able to spend more each year without running out of money prematurely.

There's no best answer here. Figure out which approach feels the most doable for you, and work toward that. Then, check on your progress annually and whenever you experience a major life change. Keep adjusting as you near retirement age, and make sure you're comfortable with the amount you'll withdraw annually before you actually leave the workforce.

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