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Is $2 Million Enough to Retire at 70?


Planning for retirement can be complicated, even with millions in the bank. Let’s take a look at some of the most common tools you can use and questions people have about retiring at 70 with a $2 million nest egg.

Consider working with a financial advisor as you chart a course to a retirement nest egg of $2 million — or any amount, for that matter.

The 4% Rule

The 4% rule can help you suss out how much of your $2 million nest egg you can withdraw each year in retirement while ensuring your money won’t run out. This rule of thumb dictates that you can withdraw 4% from a balanced portfolio (50% in stock, 50% in bonds) in your first year of retirement and then adjust withdrawals in subsequent years for inflation.

While the 4% rule is very simplistic and your experience can differ, it can be a helpful way to estimate what your retirement income might be. If you apply this to the scenario of retiring at 70 with $2 million in savings, the rule says you could withdraw $80,000 in your first year of retirement.

Now keep in mind that the 4% rule has plenty of weaknesses and the outcome can vary based on things like your portfolio composition and your investments’ rate of return. It’s also based on historical averages and market projections. However, it can still be helpful as a rudimentary tool to help you imagine how much income your savings can realistically produce each year.

Social Security and Medicare

Is $2 Million Enough to Retire at 70?

If you retire at 70, your retirement income will also likely be supplemented by Social Security benefits. You could also qualify for free Medicare, which kicks in for most at age 65. These programs can really help you deal with the costs of retirement.

You can use this SmartAsset Social Security calculator to see what your annual payments might look like. The longer you wait to claim Social Security (up until age 70), the larger your payments will be. Waiting until age 70 to claim Social Security will boost your benefits to 132% of what they will be at full retirement age.

One thing to remember with Medicare is that even though the government is helping to subsidize your healthcare, you will still have to cover some procedures, treatments and medications out of pocket. According to 2022 research, a 65-year-old retired couple enrolled in Medicare should still plan to spend an average of $315,000 in healthcare expenses over the course of their retirement. Of course, retiring five years later might shave off some of that number for you, but it’s still an expense you should plan for. 

Lifestyle and Cost of Living in Retirement

Some of the factors that will determine how much your retirement will cost are out of your control, including your lifespan. You should consider your current health condition as well as the lifespans and health concerns of members of your family, but there’s no predicting the future so it’s best to err on the side of caution when planning financially.

But there are many things you can control and predict about your retirement, such as where you want to live and how you want to spend your time. If you want to live in New York City and travel to Europe every year, your retirement will likely cost more than if you opt to settle down in Asheville, North Carolina, and spend your time visiting nearby family.

There’s no right or wrong answer here, but you’ll need to consider your lifespan, health and lifestyle when you’re deciding how much is enough for your retirement.

How Inflation Might Impact Your Retirement

As inflation increased in the aftermath of the COVID-19 pandemic, you’ve likely been thinking about how to factor it into your retirement plans. The rising cost of goods is one of the biggest pain points for retirees. As the prices of goods and services rises, the purchasing power of your money shrinks. In fact, the U.S. Bureau of Labor Statistics inflation calculator indicates that $1 million in January 2000 had the same buying power as $1.7 million in 2023.

Now, Social Security payments do scale with inflation to some degree. But you might see painful impacts in other areas when you’re living on a fixed income.

The best way to cope with the vagaries of inflation is to ensure that your retirement income will come from diversified sources. In other words, don’t put all your eggs in one basket. While some investments, like CDs or some types of bonds, might suffer in periods of increased inflation, some investments, like stocks and real estate, can rise with inflation. Diversification is key for coping with inflation. 

What a $2 Million Retirement Might Look Like

Is $2 Million Enough to Retire at 70?

Let’s take a look at what retiring at 70 with $2 million might look like for a hypothetical married couple. Using the 4% rule, you can assume that they’ll withdraw $80,000 from their investment portfolios in their first year of retirement and then adjust for inflation. In this example, they were both born in 1985 and have an annual income of $100,000.

If they both retired and claimed Social Security at the age of 70, their annual payments would be $66,362 in their first year of retirement. With their portfolio withdrawals, their total annual income would be $146,362.

When you’re running your own numbers, remember to deduct taxes and living expenses from this amount. Common living expenses include your mortgage or rent payments, property taxes, transportation costs, as well as food and medical expenses. If you still have a mortgage or pay high property taxes, downsizing or moving to a less expensive area may be worthwhile if those expenses are straining your budget.

Bottom Line

Yes, retiring at 70 with $2 million in the bank is possible. It will require diligent planning and a good hard look at your expenses in retirement. If you plan ahead, you should be able to enjoy your retirement to the fullest.

Tips for Retirement Planning

  • Consider talking to a financial advisor about strategies you can use to save $2 million for retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Diversification is key to retirement savings, but you might have questions about exactly how to divide your assets up. That’s where SmartAsset’s free asset allocation calculator can come in handy.

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