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Can You Retire With Less Than $1 Million?


One million dollars is often cited as the amount that most people should use as their benchmark when trying to figure out how much they need to save for retirement. But you may be able to retire on less than $1 million, depending on your financial situation. While having a lot of money in the bank is always a plus, you don’t have to be rolling in dough in order to retire comfortably.

Check out our retirement calculator.

Americans Are Barely Saving for Retirement

The U.S. Government Accountability Office (GAO) reported that almost half of American households with adults who are at least 55 years old don’t have anything saved in a retirement account. And nearly one third of these households don’t even have pensions.

Most Americans who do have retirement savings are nowhere near the million-dollar mark. The GAO found that among the households ages 55 and above with retirement savings, the median amount that they’ve socked away is only about $104,000.

How to Retire On Less Than $1 Million

Can You Retire With Less Than a Million Dollars?

While you may have heard that you need $1 million to retire, that’s not a rule that everyone has to follow. The median household income in the U.S. is around $50,000. Ten times $50,000 is $500,000, which is half of a million. If you continue working into your late 60s or your early 70s, you might only need to set aside savings equal to seven or eight times your annual income.

A retirement calculator can help you figure out how much money you need to save for your golden years. But if you don’t plan ahead and you find yourself on a tight budget after you retire, you can cut costs in many different ways.

For example, you can save money in retirement by doing the things that you used to pay someone else to do. You can mow your own lawn, wash your own car and maybe even fix your own broken sink. And since you’ll have more time to prepare your own meals, you can save money by cooking at home instead of eating out at restaurants.

If you’re worried about running out of money in retirement, you’ll also need to keep in mind that some of your expenses will automatically disappear once you leave the workforce. After you leave your job, you’ll no longer have to buy work clothes, pay to commute to work or buy gifts for your co-workers.

If your children are financially independent and you no longer have a mortgage to pay off, you’ll have more money available that you can use to cover other costs. Plus, you can always move to a state that’s more tax-friendly for retirees.

The Bottom Line

Can You Retire With Less Than a Million Dollars?

The amount of money you’ll need to retire will ultimately depend on the kind of lifestyle you want to live after you stop working. You may actually need $1 million dollars if you have expensive taste or you’re dealing with a health issue that you’ll need a lot of money to treat. But if you can live within your means and you’re focused on paying off debt before you reach retirement age, it’s possible to retire on less than $1 million.

Tips for Getting Retirement Ready

  • Figure out how much you’ll need to save to retire comfortably. An easy way to get ahead on saving for retirement is by taking advantage of employer 401(k) matching.
  • Work with a financial advisor. According to industry experts, people who work with a financial advisor are twice as likely to be on track to meet their retirement goals. A matching tool like SmartAsset’s SmartAdvisor can help you find a person to work with to meet your needs. First you’ll answer a series of questions about your situation and goals. Then the program will narrow down your options from thousands of advisors to up to three registered investment advisors who suit your needs. You can then read their profiles to learn more about them, interview them on the phone or in person and choose who to work with in the future. This allows you to find a good fit while the program does much of the hard work for you.

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