Published: March 11, 2022

Updated: December 31, 2025 

Can You Retire with $1 Million? Will it Be Enough?

Most Americans could retire with $1 million in savings. That nest egg would last most people around 20 years, which means that people who retire at 65 could live on $1 million until they're about 85.

But of course, you're not the average American—you're you!

Whether you can retire on a million dollars depends on several variables like: where you live, the cost of living for your lifestyle, your healthcare expenses, whether you need long-term care, and whether you receive social security benefits.

Another big consideration is what you do with your retirement funds. Will you keep them in your savings account? Or can you leverage that million to earn yourself more money? Do you actually need 2 million to retire?

In this article, we'll explore the factors that influence the cost of retirement and help you understand how much you need to retire comfortably.

Factors Determining Whether $1 Million is Enough to Retire

Some people could live on a cool million for years and years. For others, it may not last long at all. Here are the main factors to think about when considering how much money you need to retire.

1. Retirement Lifestyle

How do you see yourself in retirement? Are you on first-class flights to white sandy beaches? Are you sipping margaritas poolside in a luxury retirement residence? Or do you see yourself living modestly in your family home?

What are average living expenses for retirees in 2025?

Different lifestyles will generate different living expenses. US News reports that individuals 65 years and older have average living expenses of about $50,000. At that rate, one million would last about 20 years. If you lead a more expensive lifestyle, one million wouldn't last as long, but scaling back your expenses would help it go further.

Wherever possible, convert generalities into your own budget line items (housing, healthcare, travel, giving). Revisit your plan annually and increase income or cut expenses when inflation runs hot.

2. Risk Tolerance and Rate of Return on Assets

Another big factor is where you’re storing your lump of cash.

If you keep your money in a low-interest savings account, it won't earn you much money. So, you'll eat through it more quickly. But, if you put your money to work for you, it could generate significant earnings and last you a long time. Ideally, you could use your million to make as much money as you spend, so you don't eat into it at all.

How can you use your money to earn money? By investing it.

If you're going to invest, you'll have to decide what your risk tolerance is. You could choose to invest in very low-risk investments. You’d be almost certain not to lose money, but your interest rate would likely be low, so you wouldn’t make much money either. (Note that fixed annuities are one of the safest investments you can choose and still have interest rates that are much higher than traditional savings accounts and CDs).

Or, you could choose higher-risk investments like stocks, mutual funds, or variable annuities. These options may earn you a higher interest rate, but they are also riskier because they depend on the performance of the stock market. If your investments perform well, you could earn big ... but if they do poorly, you could lose big, too.

If you’re not sure, consult with a financial advisor or investment advisor to develop your investment strategy. If considering annuities, compare immediate vs. deferred options and ask for a current quote illustration; add riders (e.g., COLA, period‑certain, joint life) only when they support your goals and risk tolerance. 

3. Health and Life Expectancy

Whether one million dollars will be enough for you also depends on how long you live.

The average life expectancy of an individual living in the US is about 77 years. It's a little lower for men (74 years) and a little higher for women (79 years).

So, imagine you retire at 65 and have an average annual retirement expense of $50,000. Then imagine that you live to the average life expectancy of 77 years. One million dollars would last you for the rest of your life, and you’d even have some left over to leave for your family.

Now imagine that you are lucky enough to enjoy a particularly long life and you live into your 90s. In that case, you would run out of retirement savings a few years before you died. Or, imagine you experience poor health and need long-term care. You may find yourself burdened with healthcare costs and your money may run out earlier than you expect.

One way to guarantee your money never runs out is to buy an annuity. Annuities can offer guaranteed lifetime income. That means that you have certainty that you'll receive some money coming in to supplement any pension or social security income, for the rest of your life. That way, you know that you'll always be able to cover at least your basic expenses.

Build in a healthcare/long‑term‑care buffer and revisit longevity assumptions annually; consider longevity insurance or annuity laddering if you expect a long retirement.

4. Retirement Location

Where are you planning to live when you retire? Your choice will impact how far your money goes.

For example, San Francisco, Honolulu, and Seattle are among the most expensive US cities for retirement. Business Insider estimates that you would need over $5.7 million for a comfortable retirement in San Francisco. In that city, most people would burn through a million dollars in about 8 years.

On the other side of the spectrum, Memphis, Cleveland, and Buffalo are among the most affordable cities to retire in. Average annual expenses for retired people in Memphis are about $41,000—well below the national average. A million dollars in Memphis would last around 43 years.

Choosing to live in a state and city with a relatively low cost of living and low healthcare costs would help your money last longer.

5. Taxes

Another way to stretch your money further is to consider how to optimize paying taxes. There are a few ways to do this.

The first is by choosing tax-advantaged strategies to grow your money. For example, IRAs, 401(k)s, and other retirement accounts provide tax-deferred growth. That means you don't pay taxes on the earnings from your money when you earn them; instead, you pay taxes when you make withdrawals. That allows your savings to grow faster with compounding interest.

Note that annuities are also a powerful, tax-advantaged way retirees can grow their money.

Another thing to consider is that states tax retirement income differently. By choosing to retire in a state with lower tax rates for your annual income, you can help ensure your money goes further.

Coordinate withdrawals across taxable, tax‑deferred, and tax‑free accounts; consider Roth conversion windows and the tax treatment of annuity payouts.

6. Inflation

Inflation occurs when the cost of goods increases over time. As prices increase, the value of your money goes down because a dollar buys less than it used to. While economists generally like to see low, steady inflation, significant inflation can mean that the costs of your retirement living will increase substantially, outpacing your savings. The faster inflation rises, the less time one million dollars will last.

Inflation rates can be measured using benchmarks such as the consumer price index (CPI). The CPI indicates the price change of a basket of goods that the typical American purchases. It's a general indicator of price increases.

Note that some costs increase faster than others. One of those is healthcare costs. The cost of healthcare usually increases faster than the cost of other goods. Since retirees consume more healthcare products and services than other age groups, the cost of living for retirees may increase faster than for others.

You can’t do much about inflation, but you can make investment decisions that account for it. For example, Inflation-adjusted annuities help ensure that your earnings increase with the rising cost of goods.

7. Retirement Age

When do you want to retire?

Many people retire at 65. If you're the typical American that can live off of $1 million for 20 years in retirement, it will last you until you’re 85. That's enough for most people.

But what if you want to retire early and stop working at 55? Suddenly, $1 million may only take you to age 75—below the average life expectancy. In that case, you may need to save more than $1 million. Or, what if you continue to work—even part-time—late into your life? The extra income would help keep you from drawing into your savings and you might be able to retire on less than $1 million.

Again, it depends on the life you see for yourself. The younger you retire, the more you'll need to have saved to ensure you don't run out.

Is $1 Million in an Annuity Good to Retire On?  

• Short answer: It can be—if it matches your plan. A $1 million immediate annuity can provide guaranteed income to cover a baseline of essential expenses. Payouts depend on age, rates, and options (single vs. joint life, period‑certain, COLA riders). Use an up‑to‑date quote to compare against your spending needs and portfolio strategy.

  Compliance note: Examples are illustrative only and not a solicitation or guarantee. Actual quotes vary by provider, rate environment, and selected features.

At What Age Can You Retire With $1 Million?

Now imagine you have your million saved. When can you retire?

It's totally up to you.

If you retire at 55 years old, and you don't have any additional income streams, you can expect your money to run out at about 75. If you live frugally or put your money to work for you to get significant earnings out of your cash, it could last you even longer.

If you retire at 65, you can expect your million to last you until about 85 years old. Again, if you have done your financial planning effectively and have relatively low living expenses, it could last you even longer.

How Long Will $1 Million Last in Retirement?

A good rule of thumb is that $1 million will last you about 20 years.

Of course, it depends on your situation, spending habits, and—especially—where you live. To give you an idea, here are some estimates for how long $1 million will last in retirement in the top 50 most populated cities in each region of the US:

In the West, it would last about 17.5 years on average

In the Southwest, it would last about 31.2 years on average

In the Midwest, it would last about 34.8 years on average

In the Southeast, it would last about 29.2 years on average

In the Northeast, it would last about 22.2 years on average

Determining the Right Amount of Retirement Savings for You

Here’s the big question—is one million dollars enough to retire on?

No one can answer that but you. To figure out your ideal savings goal, think about what your expenses in retirement would be and do the math.

Expenses

Consider the cost of living in the city you want to live in and the kind of living situation you want for yourself (are those international vacations or margaritas by the pool important to you?). Next add a healthy budget for possible healthcare expenses.

Now think about those costs starting from when you want to retire and estimate them for the rest of your life, remembering that those costs will probably go up every year with inflation.

Doing the above should allow you to estimate your retirement expenses. To help, consider calculating your expenses using a retirement calculator.

Retirement Income

Now estimate the amount of money you can save and the income you can generate from those savings. If you invest, how much will you earn in interest, dividends, or annuity income?

Again, this is a complex calculation, but you can use our annuity calculator to help you understand how much you could earn from one of our fixed annuity products.

Determine your Retirement Savings Goal

Once you know both your income and your expenses, compare them to figure out how much money you'll need to retire.

For example, if you estimate your cost of living to be $40,000 a year in retirement, and you calculate that your investments, social security income, and annuity income will be about $24,000, you know that you'll be delving into your savings to the tune of about $18,000 each year after you retire. If you retire at 65 and want to make sure you have enough to last you until you're 95, you'll need to plan for 30 years of retirement.

$18,000 per year for 30 years is about $540,000. So you know you'll need $540,000 in savings to sustain yourself.

Preparing for Retirement

Planning for retirement can be scary. You might feel like it’s impossible to save enough money to feel secure. Part of the stress comes from uncertainty—not knowing or sure how much money you'll need or how much savings will be enough.

Retirement planning is hard, but some financial products make it easier. Annuities make fantastic additions to most retirement plans because they offer you certainty. They can pay you a guaranteed retirement income so that you can be sure that no matter what happens, you'll at least have some money coming in.

It's never too early to make a retirement plan and it never hurts to consult a certified financial planner to help you. That can help ease your worries and ensure you understand all your options.

If you'd like to know more about how to bring some financial certainty to your retirement plan, don't hesitate to ask about annuities. These powerful products give you a tax-advantaged way to grow your wealth and guarantee an income in retirement. Contact our licensed reps to learn more.

Frequently Asked Questions

Is $1 million in an annuity good to retire on?

It can provide a dependable baseline of guaranteed income when paired with Social Security and savings. Compare immediate vs. deferred annuities and consider COLA or period‑certain riders based on your needs.

At what age can you retire with $1 million dollars?

Many plans target ages 60–65 to coordinate with Social Security and Medicare. Earlier retirement often requires lower withdrawals or bridge income (part‑time work, laddered annuities).

How should I account for future inflation?

Use the inflation calculator above to project purchasing power and plan periodic income raises. Inflation‑adjusted products can help your income keep pace.