Is $1.5 Million Enough to Retire at 60?

Is $1.5 million enough to retire at 60? The answer depends on spending habits, geographic location, investment returns and whether other income sources like pensions or Social Security are available. For some, this amount may support a comfortable retirement with modest travel and stable housing. For others—particularly those facing high medical costs or living in expensive areas—it may fall short of long-term needs.

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How to Calculate Your Retirement Income

To estimate how far $1.5 million can go if you retire at 60, it helps to break down income sources. This typically includes investment withdrawals, Social Security benefits (once eligible) and any other forms of income. Adding these together provides a rough estimate of your total annual income in retirement.

How Much You Can Withdraw Per Year

A common rule of thumb is the 4% withdrawal rule, which suggests retirees can withdraw 4% from a balanced portfolio in the first year of retirement, adjusting for inflation in subsequent years. Under this guideline, $1.5 million would generate about $60,000 in the first year.

However, the 4% rule is more of a guideline than a hard and fast law of finance. The appropriate withdrawal rate can vary depending on individual circumstances.

For instance, retiring at 60 may warrant a more conservative approach, such as a 3.5% rate. This would stretch savings over a potentially longer retirement. At 3.5%, the first-year income on a $1.5-million retirement savings nest egg would be $52,500. Others may adopt a more dynamic strategy like the guardrails approach or bucket strategy.

Social Security Benefits

When you choose to collect Social Security affects how much you receive. Claiming at age 62, the earliest possible age, reduces your benefit by about 30% compared to waiting until full retirement age (FRA), which is 67 for most people.

If your full retirement benefit at age 67 is $1,981 per month (that’s how much the average retired worker benefit was in February 2025), claiming at 62 would reduce it to roughly $1,387 per month—or about $16,644 per year.

Delaying until 67 boosts your benefit to $1,981 per month. However, you’d need to fund five extra years from other sources. The breakeven point—the age at which waiting results in more cumulative benefits—typically falls between age 78 and 80. If you expect to live into your 80s or beyond, delaying may pay off in the long run, but it requires absorbing more upfront cost from your portfolio.

The amount of the increase in your monthly benefit varies as well. Depending on your situation, it may not be worth increasing your monthly benefit by a small amount in exchange for giving up years’ worth of benefits.

If you claim at 62, your combined annual income from withdrawals and Social Security would be approximately $76,272. If you wait until 67, your income would be higher, starting around $81,300 annually, factoring in the larger Social Security benefit and the continued portfolio withdrawals.

Other Income Sources

Additional income—such as part-time work, rental income or a small pension—can further increase cash flow.

For example, if you earn $10,000 per year from a part-time job, pension or rental property, your total annual income would rise to approximately $86,272 from age 62 onward. Before then, during the first two years of retirement, your income would be limited to your portfolio withdrawals and any other non-Social Security income.

If you wait until age 67 to claim Social Security, your total retirement income would jump to $91,300. However, you’ll need to subsist on portfolio withdrawals for an extra five years and potentially deplete your savings faster.

Your Retirement Lifestyle at Age 60

Senior women smile while exercising together.

How much you spend in retirement can vary significantly depending on your lifestyle and where you live. Many retirees live modestly and most spend significantly less than they did while working. Others may find themselves spending more—especially in the early years when travel and hobbies are more feasible. Reviewing major spending categories can clarify if $1.5 million will be enough.

Housing

Housing typically is the largest single expense in retirement. If your mortgage is paid off, your costs may be limited to property taxes, insurance and maintenance. You often can reduce your monthly housing cost by renting, downsizing or relocating to a lower-cost area. If you move to a higher-cost area, your housing expenses will likely increase.

Healthcare

Healthcare costs often rise with age. Medicare eligibility does not begin until 65, so until you reach that age you may need to purchase private insurance or use COBRA to continue workplace coverage. Both of these options can be costly. Even with Medicare, out-of-pocket expenses like premiums, copays and prescription drugs can add up.

You’ll also want to account for the long-term costs of healthcare in retirement. For example, a 65-year-old who retired in 2024 can expect to spend an average of $165,000 on healthcare (not including long-term care), according to Fidelity’s Retiree Health Care Cost Estimate.

Food and Utilities

Costs for food and utilities tend to stay stable or decrease slightly in retirement, especially if you dine out less or relocate to a more affordable area. However, inflation and energy prices can shift these costs over time.

Travel and Leisure

Many retirees increase spending on travel, hobbies or family during the first decade of retirement. This phase—often called the “go-go years”—brings short-term spending spikes that usually decline over time. For example, you may plan to travel extensively in your 60s and end up spending closer to $100,000 per year in this first decade of retirement. In this case, you’ll need to tweak your financial plan and account for higher spending early in retirement.

Taxes

You’ll still pay taxes in retirement. Withdrawals from traditional IRAs and 401(k)s count as ordinary income, although qualified withdrawals from Roth accounts are not. Meanwhile, up to 85% of your Social Security benefits may also be taxable depending on your overall income.

Your Retirement Portfolio

The composition of your retirement portfolio can significantly shape the returns it generates and impact your retirement budget.

A portfolio with a balanced mix of stocks and bonds may offer both income and growth, helping your savings last longer. Higher equity exposure can boost long-term returns but comes with more volatility, which may be less tolerable in retirement. On the other hand, a conservative portfolio may preserve capital but limit growth, increasing the risk of outliving your savings.

Sequence of returns risk is another factor to consider. Poor market performance early in retirement can erode your portfolio faster, especially when withdrawals remain constant. You can reduce this risk through diversification, rebalancing and adjusting withdrawals during market downturns. Over time, your investment strategy may need to shift to reflect your changing income needs, risk tolerance and life expectancy.

Bottom Line

A woman in her 60s smiles during a meeting with her financial advisor at home.

Retiring at 60 with $1.5 million depends on your spending habits, investment returns, and life expectancy. A mix of withdrawals, Social Security and other income can provide a workable plan. However, outcomes vary based on timing and lifestyle choices. Long retirements introduce more variables—from healthcare costs to market swings—making flexibility a useful part of any financial approach. A clear view of both your spending and income sources can help you make more grounded decisions as you plan for the years ahead.

Retirement Planning Tips

Rather than relying on a single estimate, break your income sources into categories: guaranteed income (Social Security, pensions), investment income (dividends, interest) and drawdowns from retirement accounts. Use cash flow projections to estimate when and how to tap each source.
A financial advisor can help you build a retirement income plan based on your assets and expenses. 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.