How Long Will $1 Million Last in Retirement?

Many people hope to retire with $1 million in savings, but how long will it really last?

The answer can depend on your retirement age, life expectancy and the kind of lifestyle you plan to live. For some people, $1 million may be more than enough for a comfortable retirement. For others, it might not be enough.

That’s why it could be a good idea to speak with a financial advisor. A fiduciary financial advisor can assess your retirement plan and help you evaluate your investments, optimize a tax strategy to help lower your liability, and identify other ways to help you achieve your retirement goals.

Consulting a fiduciary financial advisor can be a great first step to helping make sure you’re on track to meet your financial goals. That's why we created a free tool to help match you with up to three financial advisors.

Click here to take our free quiz and get matched with vetted advisors in just a few minutes, each obligated to work in your best interest.

Research suggests people who work with a financial advisor could end up with about 15% more money to spend in retirement.¹

A 2022 Northwestern Mutual study found that 62% of U.S. adults admit their financial planning needs improvement. However, only 35% of Americans work with a financial advisor.²

---

Can You Retire With $1 Million Dollars?

While it’s certainly possible for someone to retire with $1 million, some factors could make that more difficult. Here are just a few of the numerous potential roadblocks that could make retiring on $1 million challenging.

● Inflation: If inflation remains above the 2% benchmark the Federal Reserve aims for, $1 million may not last as long as you’d planned.

● Healthcare costs: While Medicare can help reduce the financial burden, it doesn’t pay for everything. Expensive co-pays, prescription drugs, and long-term care could potentially drain your retirement nest egg.

● Social Security: The program’s cost of living increase doesn’t always keep pace with the inflation rate.

---

How Long Will $1 Million Last in Retirement?

Everyone’s situation is different, and several important factors could determine whether $1 million is enough to save for retirement.

● Your retirement lifestyle

● Your retirement age and life expectancy

● Your health

● You risk tolerance and risk capacity

● Your cost of living

● Your Social Security timing

---

3 Hypothetical Examples of $1M in Retirement

Running some different hypothetical scenarios through a retirement calculator can help you estimate how long your money should last.

● Example #1: You have $1 million in savings and earn a 6% annual return. Assuming you’re in the 24% tax bracket and withdraw $5,000 per month, your savings should last just over 30 years.

● Example #2: Your $1 million in savings earns a 5% annual return. With the same tax bracket and monthly withdrawal amount, you’d run out of money in 26 years.

● Example #3: You earn a 7% annual return, but you’re in the 32% tax bracket and withdraw $6,000 a month from your savings. At that pace, you’d have enough savings to last 23 years.

These examples are purely hypothetical and don’t take inflation into account, annual increases in your withdrawal rate, or any changes to your federal tax bracket.

---

7 Tips to Help Save $1 Million (or more) for Retirement

Regardless of how much you have saved, these tips could potentially help you get closer to the $1 million mark, or maybe more.

1. If you have a 401(k), contribute enough to get the full employer match (if offered).
2. Consider increasing your contribution rate annually.
3. Consider opening a Roth IRA to make tax-free withdrawals in retirement while potentially avoiding required minimum distributions.
4. Consider investing in a taxable account, keeping your risk tolerance and risk capacity in mind.
5. Review retirement and investment accounts annually to assess fees and potentially lower them.
6. Consider tax-advantaged investments such as municipal bonds, which are exempt from federal taxes.
7. Consider investments less susceptible to inflation, such as real estate or Treasury Inflation-Protected Securities (TIPS).

---

How to Know If You’re on Track to Save $1 Million for Retirement

Regardless of how much you have saved for retirement, it’s important to ensure you’re on track to reach your financial goals. With so many factors affecting what you’ll need and how long it will last, it could be a good idea to speak with an expert.

That’s where a financial advisor can be invaluable.

But how do you find a vetted fiduciary financial advisor, obligated to work in your best interest?
This is the biggest hurdle for many. With thousands of daily Google searches for "Fiduciary financial advisors near me," "best fiduciary financial advisor," and "financial investment advisors near me," the hunt for a vetted fiduciary advisor can feel like a wild goose chase.

But it doesn't have to be. And thankfully, it really isn't.

Our free matching quiz links Americans with up to three fiduciary financial advisors who serve their area so they can evaluate and choose the one who fits their needs.

SmartAsset has matched thousands of people with financial advisors. Advisors are vetted through our proprietary due diligence process. We only match with fiduciaries, so all of your financial advisor matches are legally committed to acting in your best interest.

Our advisor matching service is at no cost to you and there is no obligation to work with any of your advisor matches. You're in control.

—-----------
The information contained in this article is general and not specific to any individual's situation. The SmartAsset quiz matches you with up to 3 financial advisors to which you can compare and decide which to work with. You can consult a financial advisor about your inherited property and taxes. The SmartAsset quiz can't make a determination regarding your inherited property and taxes.

This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.

SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset receives compensation from Advisers for our services. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any user’s account by an Adviser or provide advice regarding specific investments. We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.

SmartAsset.com is not intended to provide legal advice, tax advice, accounting advice or financial advice (Other than referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). SmartAsset is not a financial planner, broker or tax adviser. The Service is intended only to assist you in your understanding of financial organization and decision-making and is broad in scope. Your personal financial situation is unique, and any information and investing strategies obtained through SmartAsset.com may not be appropriate for your situation. Accordingly, before making any final decisions or implementing any financial strategy, you should consider obtaining additional information and advice from your accountant or other financial advisers who are fully aware of your individual circumstances.

---

Sources:

1. "Journal of Retirement Study" (Winter 2020). The projections or other information regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results, and are not guarantees of your future results. Please follow the link to see the methodologies employed in the Journal of Retirement study.
2. "Planning and Progress", Northwestern Mutual (2022)