In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows.
A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.
While $10 million is a lot of money, retiring at 50 means you can plan on approximately 40 years of retirement if you expect to live to around the average age.
Looking to retire on $4 million? If you leave work at 61, the average retirement age as of the latest Gallup data, you'll have more than enough to see you through to a life expectancy of 90 or even 100. Across 29 years, $4 million could equate to a generous $11,494 a month.
At the current Treasury rate of 4.3%, a $1 million portfolio would generate about $43,000 per year, or roughly $3,500 per month. With your Social Security payments that would generate about $6,000, again enough to live comfortably in most places.
Living off a $1 million portfolio requires a strategic balance between securing steady income and managing investment risks. While some may find comfort in the lower returns yet higher security of Treasury bills, others might lean toward the potentially higher but more variable returns of index funds.
Yes, it is possible to retire with $1 million at the age of 65. But whether that amount is enough for your own retirement will depend on factors that include your Social Security benefits, your investment strategy and your personal expenses.
According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.
Based on the 80% principle, you can expect to need about $96,000 in annual income after you retire, which is $8,000 per month.
It's definitely possible, but there are several factors to consider—including cost of living, the taxes you'll owe on your withdrawals, and how you want to live in retirement—when thinking about how much money you'll need to retire in the future.
The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4% of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.
However, not a huge percentage of retirees end up having that much money. In fact, statistically, around 10% of retirees have $1 million or more in savings.
In more than 20 U.S. states, a million-dollar nest egg can cover retirees' living expenses for at least 20 years, a new analysis shows. It's worth noting that most Americans are nowhere near having that much money socked away.
Can you retire at 50 with a million dollars? Yes, retiring on a million dollars at 50 years old is possible. Looking back at our calculations, it would likely allow you a monthly income of over $2,000. Additional income sources like Social Security could further increase this amount.
Florida has regained its status as the best state for retirees in 2024. That's according to WalletHub's latest “Best and Worst States to Retire” study. In 2023, Virginia took the top spot and knocked Florida down to No. 2.
The average American spends $4,345 per month in retirement, according to the Bureau of Labor Statistics. That's $52,141 per year.
As of December 2023, the average check is $1,767.03, according to the Social Security Administration – but that amount can differ drastically depending on the type of recipient.
Top the amount with 401(k) savings, living on $3,000 a month after taxes is possible for a retiree. For those who only have social security benefits to rely on, there are many places where they can retire on their checks both in the USA and around the world.
According to Schwab's 2023 Modern Wealth Survey, Americans perceive an average net worth of $2.2 million as wealthy. Knight Frank's research indicates that a net worth of $4.4 million is required to be in the top 1% in America, a figure much higher than in countries like Japan, the U.K. and Australia.
Nearly 2 in 5 Retirees Have No Retirement Savings
The survey found that about 37% of retirees say they have no retirement savings, up from 30% in 2022, and only about 12% have at least the recommended $555,000 in savings.
Having no savings means that you will be forced to rely on your Social Security benefit for income in retirement. According to the Social Security Administration (SSA), among elderly Social Security beneficiaries, 12% of men and 15% of women rely on Social Security for 90% or more of their income.
While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.
A plurality of older Americans, 40.2 percent, only receive income from Social Security in retirement. Roughly equal numbers of older Americans receive income from defined benefit pensions as from defined contribution plans.
One example is the $1,000/month rule. Created by Wes Moss, a Certified Financial Planner, this strategy helps individuals visualize how much savings they should have in retirement. According to Moss, you should plan to have $240,000 saved for every $1,000 of disposable income in retirement.