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How Long Will $1 Million Last in Retirement?


A lot of people wonder exactly how much money they’re going to need in order to enjoy a comfortable retirement. One common benchmark for retirement savings is $1 million. “Surely, if I’ve saved up a million bucks, I’ll be able to retire comfortably,” is how this thinking traditionally goes.

But is this really the case? Is a million dollars enough money to ensure a financially secure retirement today?

A recent study determined that a $1 million retirement nest egg will last about 19 years on average. Based on this, if you retire at age 65 and live until you turn 84, $1 million will be enough retirement savings for you. However, this average varies considerably based on a number of different factors.

Four Factors to Consider: How Long Will a Million Dollars Last in Retirement?

How long 1 million dollars will last in retirement depends on a large number of factors, including the key ones listed below:

1. Your desired retirement lifestyle.

Do you have a picture in your mind of what retirement will look like for you? For example, do you plan to travel extensively, dine at the best restaurants, spend time with children and grandchildren (and spoil the grandkids), tour the country in a motorhome, buy a yacht or sailboat, or join a country club? If so, you may need considerably more than 1 million dollars to support this kind of lifestyle.

On the other hand, if you envision a simpler and more frugal retirement lifestyle, $1 million might be plenty of money for you to retire on and still leave a generous inheritance for your heirs.

Calculate It: Are You Saving Enough to Retire Comfortably?

2. Your rate of return on retirement funds.

When entering retirement, many people adjust their asset allocation to a less risky mix of stocks, bonds and cash equivalents. While boosting safety and reducing volatility, this generally comes with an expectation of lower rates of return throughout retirement.

Finding a creative balance between risk & return could potentially stretch a $1 million retirement nest egg significantly further if that money was invested more aggressively throughout retirement. Managing the risk-reward tradeoff is something that each individual and couple must seriously consider, and can be a key conversation to have with a financial advisor.

3. Your health and life expectancy.

Healthcare expenses can eat up a big chunk of your retirement nest egg, depending on the type of healthcare coverage you have, and what health issues you encounter during your retirement. While Medicare will partially cover many healthcare expenses, there will still be copays and other out-of-pocket medical expenses you’re responsible for. If you are in poor health or experience major medical complications after you retire, this could drain your $1 million nest egg faster than you may have planned.

Further, if your family has a history of longevity, you might live longer than average. If you’re one of the lucky few who beats the average lifespan, you might need more than $1 million to last throughout retirement. According to the Centers for Disease Control and Prevention (CDC), the average life expectancy in the U.S. is 78.7 years. This breaks out to 76.2 years for men and 81.2 years for women.

4. Where you live in retirement.

The study mentioned below determined how long a $1 million nest egg will last on average in each state. One million dollars will last the longest — just over 23 years — in Mississippi, while it will last the shortest — just over 10 years — in Hawaii, according to the study. More important than state tax rates, is generally the overall cost of living in any given state. Some retirees choose to relocate in retirement to reduce their overall cost of living.

Read More: What is the Average Retirement Savings by State?

Next Steps for You

Are you prepared for retirement? What lifestyle can you afford to maintain? Will moving out of state significantly alter your retirement potential? Find out for yourself if your retirement plan is on track.

Get the Personal Capital Retirement Planner, one tool in an award-winning suite of financial tools that enables you to determine how much money you should save for retirement. You can also evaluate alternative plans in order to determine whether $1 million might be enough for you.
Talk to a fiduciary financial advisor for more detailed guidance on your retirement saving strategies.

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