Can You Retire on $1.5 Million Comfortably?

Wondering if $1.5 million is enough to fund your golden years? It’s a question many pre-retirees ask as they evaluate their financial future. While having a retirement nest egg of $1.5 million certainly puts you ahead of many Americans, whether you can retire comfortably on this amount depends on several key factors. Your lifestyle expectations, geographic location, healthcare needs and expected longevity all play crucial roles in determining if your savings will sustain you throughout retirement. Additionally, inflation and market fluctuations can significantly impact how long your money lasts. Before making this life-changing decision, it’s essential to understand how these variables affect your specific situation.

A financial advisor can help you create a financial plan for your retirement needs and goals.

Factors to Consider for Your Retirement

It’s not easy to know if $1.5 million is enough to retire comfortably, partly because so many factors are at play. It’s a very individualized conversation where you need to analyze your needs to know for sure if it’s enough. Here are four common factors to consider:

Social Security: The average monthly Social Security payment is $1,976 per month as of January 2025. That works out to $23,712 per year in monthly benefits. While living on that amount alone might be difficult, it could be a nice supplement if you already have retirement savings. The Social Security Administration (SSA) usually provides a cost-of-living increase (COLA) every year, which adjusts the Social Security payments for inflation. Thus, these payments should continue to be a nice supplement for Social Security even as costs rise.

Pensions: According to the U.S. Census, the mean amount from pensions and retirement income was $8,538 in 2017. Note that this amount doesn’t separate pensions and retirement income, however. Pensions are becoming increasingly rare in the private sector, but they, too, can give your retirement a nice boost. Jobs that may still provide pensions include state and local government jobs, teaching jobs and jobs in finance.

Total retirement income: In addition to Social Security and pensions, your total retirement income should consider earnings, supplemental Social Security income, property income and other income you may earn. You need to add up all of your retirement income to know how much you’ll have versus how much you may need to spend.

The 4% rule: A commonly cited rule of thumb in the personal finance community is the 4% rule. With this rule, you can safely withdraw 4% of your investment portfolio each year. If you have a $1.5 million portfolio, that amount is equal to $60,000. If your portfolio still has a stock allocation, it can continue to grow even as you withdraw. One study found most portfolios would last 30 years under this rule or as long as 50 years in some cases. If you add this to the mean Social Security plus supplemental Social Security income, you will have an income of $83,712 per year. That doesn’t include property income, earnings or pensions.

How Much Do Retirees Usually Spend?

SmartAsset: Can You Retire on $1.5 Million Comfortably?

For now, $1.5 million should allow most people to retire comfortably. To know for sure, you’ll have to estimate your retirement expenses and subtract the monthly spend from your monthly expected income. Here are two things to consider when calculating your spending:

Basic living expenses: These expenses are things you can’t change much because they are required for you to survive. This includes things like food, housing and utilities. You can adjust these expenses slightly by buying cheaper meals or eating out less, for example, but they won’t change substantially.
Lifestyle: Most numbers you can find on retirement spending are averages, so your lifestyle could make your needs climb quite a bit. For example, if you’ve worked hard and now want to enjoy a lavish lifestyle of jet-setting and fancy dinner parties, you might find that $1.5 million is not enough. Or if you live in a high-cost-of-living area, you might find that you need additional income. You might have to make adjustments in those cases.
Medical expenses: Medical expenses can vary widely, but they can be significant for some. For instance, Fidelity suggests that the average 65-year-old retired couple will need approximately $315,000 for medical expenses. While that number is a forecast for the rest of your life, suppose you live until age 85. That would mean needing an extra $15,750 per year or $7,875 per person. Our $76,840 of income is still safe if you are single, but for a couple, it would put us right up against our retirement earnings.

Tips for Extending Your Retirement Savings

If you aren’t confident that $1.5 million is enough to retire with the lifestyle you want, you may want to look for ways to extend the life of your retirement savings. Consider postponing your Social Security benefits beyond your full retirement age. For each year you delay claiming (up to age 70), your monthly benefit increases by approximately 8%. This strategy can substantially increase your lifetime income, providing more financial security throughout your retirement years.

Transitioning gradually into retirement by working part-time can significantly extend your savings. Even modest income from consulting or reduced hours allows your retirement accounts to continue growing while delaying withdrawals. This approach also eases the psychological adjustment to retirement while maintaining social connections and purpose.

Another good way is to develop a tax-efficient withdrawal strategy for your retirement accounts. Consider which accounts to tap first based on your tax situation, potentially using taxable accounts before tax-deferred ones. Converting portions of traditional IRAs to Roth IRAs during lower-income years can also reduce future tax burdens and extend your retirement savings over time.

Bottom Line

Having a $1.5 million portfolio is no small feat: many people never even reach the seven-figure mark. And in many cases, that amount will set you up for a comfortable retirement. However, it won’t necessarily be enough for everyone. For example, if you want to live a luxurious retirement or live in an expensive area, you may find that $1.5 million is not enough. Thus, as is often the case when dealing with finances, the answer to the question at hand is: it depends. Consider discussing your situation with a financial advisor to determine whether your retirement will be financially secure.

Tips for Retirement

A financial advisor can guide you through major financial decisions, like determining your investing strategy. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Deciding how to invest can be a challenge, especially when you don’t know how much your money will grow over time. SmartAsset’s investment calculator can help you estimate how much your money will grow to help you decide which type of investment is right for you.