Is $5 Million Enough to Retire at 65?

Retirement planning has many elements, but the two questions you’ll want to answer before you address anything else are “What age do you plan on retiring?” and “How much money do you need saved to retire at that age?” Many people plan on retiring later, but 65 remains a popular target age. So you’re 65 and have $5 million saved, is that enough to retire? Let’s explore how long $5 million will last, and the type of retirement it can afford.

For help creating your own retirement savings strategy or retirement plan, consider working with a financial advisor.

Can I Retire on $5 Million at 65?

Reaching 65 with $5 million in savings places you well above the average retirement balance. But whether it’s “enough” depends on how you plan to live, how long you expect retirement to last and how you structure your withdrawals. The good news is that for many households, $5 million provides significant flexibility and income potential.

There are three basic factors you need to figure out when you’re determining if you have enough money saved for retirement:

Growth rate: Your retirement savings ideally is not sitting idly in a savings account, but is invested in the stock market or other securities, growing in value. The higher growth rate you have, the longer your money will last. In fact, if you have a high enough growth rate and low enough withdrawal rate, in theory your money will last forever.
Drawdown rate: This is the rate at which you withdraw on the principal. As noted above, it would be great to live off of interest and growth only, but for most people that’s simply not possible.
Withdrawal rate: This is the flat dollar amount you’ll need to take out each year. Your withdrawal rate obviously has a direct impact on your drawdown rate.

What Would a $5 Million Portfolio Look Like at Age 65?

At age 65, most investors are either entering retirement or already retired, making capital preservation, income generation and moderate growth the primary goals of portfolio allocation. With a $5 million portfolio, you have the flexibility to meet these goals while managing risk with diversification.

A typical balanced allocation for a 65-year-old might look like the following:

1. 40–50% Bonds and Fixed Income: This portion provides stability and income. Consider a mix of U.S. investment-grade bonds, municipal bonds (especially if you’re in a high tax bracket), Treasury Inflation-Protected Securities (TIPS) and short-duration bond funds to reduce interest rate risk.

2. 35–45% Equities: While riskier, stocks remain essential for long-term growth and protecting against inflation. A diversified equity allocation may include:

U.S. large-cap (e.g., S&P 500)
U.S. dividend-paying stocks for income
Developed international equities
A smaller allocation to emerging markets or U.S. small-cap for added growth potential

3. 5–10% Alternatives: Alternative assets such as real estate investment trusts (REITs), commodities or private equity can offer non-correlated returns and additional diversification. For higher-net-worth investors, alternatives can also include hedge funds or direct real estate ownership.

4. 5–10% Cash and Cash Equivalents: Keeping a portion in cash or near-cash instruments (like money market funds or short-term CDs) ensures you have liquidity for near-term expenses, unexpected costs or opportunistic investing.

This allocation strikes a balance between income and growth, while reducing volatility. It can be adjusted based on factors such as health status, retirement lifestyle, spending needs and legacy goals. Working with a financial advisor can also help you fine-tune your strategy to align with your risk tolerance and retirement timeline.

Withdrawal Rate Basics

A man who's decided $5 million is enough to retire at 65.

When planning for retirement, one of the most important steps is determining how much money you’ll need to withdraw each year to maintain your lifestyle. A common guideline is to plan on needing about 80% of your pre-retirement income annually. For example, if you earned $150,000 per year before retirement, you might aim for about $120,000 in annual income during retirement.

To help estimate a sustainable withdrawal rate, many retirees use the 4% rule. This rule suggests that you can withdraw 4% of your retirement savings each year, adjusted for inflation, with a reasonable expectation that your money will last 30 years. For a $5 million portfolio, this equates to an initial annual withdrawal of $200,000.

You can also reduce your withdrawal needs by lowering your cost of living. Strategies include:

Downsizing your home to reduce housing expenses
Relocating to a more affordable area
Cutting discretionary spending, such as dining out or travel

Don’t overlook healthcare costs, either. As you age, your medical expenses are likely to increase, even with Medicare. Be sure to include premiums, out-of-pocket costs, and potential long-term care needs in your budget.

Bottom Line

A couple researching if $5 million is enough to retire at 65.

With $5 million at 65, most retirees are in a strong position to generate substantial, sustainable income for decades. Still, the true measure of “enough” depends on your lifestyle, healthcare planning, tax strategy and how you manage withdrawals. A disciplined approach can help protect against market volatility and longevity risk.

Retirement Planning Tips

A financial advisor can help you make sure your retirement plan is solid. 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.
Use SmartAsset’s free retirement calculator to see how much you’ll need and if you’re on track.