Is $6 Million Enough to Retire at 65?

Retiring at age 65 with $6 million is entirely possible, even for people with quite comfortable lifestyles. Conservative investment and withdrawal plans can provide ample income for most retirees in that situation. At 65, retirees qualify for Medicare and can soon claim full Social Security benefits. They can also withdraw penalty-free from tax-advantaged retirement savings accounts by age 59 ½. The major challenge will be accumulating $6 million, which is far more than most people have saved for retirement. Wild cards that could affect this plan include inflation, investment returns and life expectancy.

A financial advisor can help you draw up a retirement strategy that considers your needs and resources.

Strategies to Retire at 65 with $6 Million

If you’re planning to retire at 65 with $6 million, start by estimating how much you’ll spend each year. One simple way to estimate post-retirement needs is to multiply your pre-retirement income by 70%. Different methods for calculating retirement income needs use different percentages, but 70% is common.

For example, if you make $200,000 per year, you would need $140,000 from your portfolio, Social Security and other sources to maintain a similar standard of living.

The next question is whether you can count on that income. It’s very likely you can safely generate that much and more from $6 million. For instance, one approach to retirement planning assumes you can withdraw 4% of your principal amount each year, adjusted for inflation, for at least 30 years without exhausting your nest egg. Using the 4% rule, $6 million generates $240,000 in the first year and adjusts for inflation to preserve purchasing power through at least age 95.

The major challenge in this scenario will be accumulating $6 million by age 65. This is a lot more than most people have saved. The average balance of retirement accounts owned by people 65 and older in 2022 was approximately $334,000, according to the Federal Reserve’s Survey of Consumer Finances. Growing this balance to $6 million may require major changes—higher earnings, greater savings, and stronger investment performance.

Another strategy could involve reducing your retirement spending. You may be able to do this, for example, by relocating to a city with lower costs of living. Other variables—like inflation, market cycles and life expectancy—can also shape the outcome of your plan. However, assuming you have as much as $6 million saved, retiring at 65 likely is a viable plan.

Benefits of Retiring at 65 with $6 million

Age 65 is somewhat past the average age of retirement, which is 62, according to a 2021 Gallup poll. Retiring a little later, especially with $6 million saved, offers many advantages. Here are some of them:

Huge financial cushion. Having $6 million in savings is far more than most people have, providing higher retirement income potential and less risk of running out of money.
Medicare eligibility. At 65, you can qualify for Medicare, which provides health insurance for less money than private-sector insurance.
Higher Social Security benefits. Delaying Social Security until full retirement age increases your benefits and can help support your budget.
No early withdrawal penalties. Beginning at age 59 ½, you can withdraw from tax-advantaged retirement accounts such as 401(k) plans without incurring a 10% early withdrawal penalty.

Bottom Line

You can likely retire comfortably at 65 with $6 million, even with a generous lifestyle and a conservative withdrawal plan. Accumulating that much by age 65 will likely be challenging. This is far more than most 65-year-olds have amassed, and reaching $6 million will call for significantly higher-than-average income, savings rate and investment performance. However, by retiring at 65, people can enjoy Social Security benefits, Medicare and penalty-free retirement account withdrawals, among other advantages.

Retirement Planning Tips

Consider talking to a financial advisor about your savings goals and sources of income in retirement. SmartAsset’s free tool matches you with 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.
States vary in the way they tax retiree income. Retirement account withdrawals, pension income and Social Security benefits may all be taxed, depending on where you plan to retire. A few states, however, have no taxes on retiree income. SmartAsset’s guide to the best states to retire for taxes can help you make the decision about where to spend your post-retirement years.