Can You Retire on $1.5 Million? (2023 Guide)

According to a recent Gallup poll, the average retirement age among retirees in the USA is now 61 years, up from 57 in the 1990s.

If you fall within this age bracket, chances are you’ve finally reached the point where you can stop working. And you’ve probably asked yourself this question at least once: “How much money do I need to retire?” If at this point, you have a 1.5 million net worth, you’re probably wondering if that’s enough to retire on.


According to Christopher Winn, a financial advisor in Portland and founder of Interactive Wealth Advisors, a retirement-planning company, a good general rule of thumb is that your retirement income should be equivalent to about 80% of your pre-retirement income.

For instance, if you earn $100,000 a year, you should strive to have at least $80,000 annually in retirement, advises Chris, in order to live well in your senior years. Using this benchmark, a typical nest egg should be in the two to three million dollars range. 

But does this mean you cannot retire with $1.5 million? The answer is yes you can. But there are lots of factors to consider including how long $1.5 million will last in retirement. 

So, is $1.5 million enough to retire? Let’s get into the details.

How Much Money Is Enough to Retire? Getting into Details

The amount of money needed to retire comfortably can vary depending on a number of factors, including your desired lifestyle, location, healthcare needs, and inflation rates.

However, a general rule of thumb is to have enough retirement savings to provide 70-80% of your pre-retirement income annually. For example, if you currently earn $100,000 per year, you should aim to have $70,000-$80,000 per year in retirement income.

To estimate how much money you will need for retirement, you can use retirement calculators available online. These calculators take into account your current age, retirement age, estimated life expectancy, current savings, and other factors to determine how much you should be saving each year.

Additionally, it’s important to remember that retirement is not just about having enough money to live on. It’s also about having a sense of purpose, staying engaged with your community, and enjoying your golden years to the fullest. So, while financial planning is crucial, it’s equally important to think about how you want to spend your retirement and what steps you can take to make those dreams a reality.

It’s important to start saving for retirement as early as possible to allow your investments time to grow.

To get a more accurate estimate of how much money you will need to retire comfortably, you should consider consulting with a financial advisor. They can help you assess your financial situation and develop a retirement plan that takes into account your specific goals and circumstances.

Factors to Consider

$1.5 million — how far does it go in retirement? Сan you retire $1.5 million comfortably? The answer depends on a number of factors, including how much you withdraw each year, a year income, the rate of return on your investments, the inflation rate, how much you can actually save for retirement, and your life expectancy. Other factors include


The first thing to consider when thinking about retirement expenses is how much you spend on your current lifestyle. This includes things like clothing, entertainment, and travel. 

According to the Bureau of Labor Statistics (BLS), clothing takes up a whopping 2.9% of total expenses for older adults 55 years and older. Entertainment takes 5.3%. If you spend a lot on clothes and entertainment, it will tremendously impact your retirement income.

The State Where You Live

The second factor to consider is where you live and the cost of living there. If you’re planning on living in a state with a high cost of living like Hawaii or California, it’s important to plan accordingly by increasing your savings and retirement contributions as much as possible.

Your State of Health

Medical costs are also something that can impact your post-work-years expenses significantly over time — especially if you are suffering from conditions that cost a lot to manage. Remember, your medicare may not cover dental care, eye, and long-term care, so you may need to pay out-of-pocket expenses for these.

Housing Expenses

Housing expenses are the biggest expense for most retirees, whether they own their home or rent. In fact, it accounts for 32.9% of their annual expenses according to BLS. Housing costs include mortgage payments, property taxes, and utilities. One way to spend less on housing expenses is to consider downsizing after retiring.

Food Costs

Food costs are another factor that can determine how long your retirement funds last. This can be a big expense for retirees, accounting for 12.3% of annual expenditure for older adults 55 years +. 

How Much Does the Average American Spend a Year in Retirement

Considering that most American retirees 65 years old and above have about $255,151 in their 401(k)s, while the median balance is $82,297, one thing’s for sure – you’ll need to really save up to live comfortably when you stop working.

how much americans spend in retirement by age

So how much does the average American spend in their post-work years? It depends on a number of factors, but according to a recent study released by the Bureau of Labor Statistics, the average American retiree between the ages of 65 and 74 spends about $48,885 a year.

Let’s break these details down using data from the BLS.

Not surprisingly, housing is by far the biggest expenditure for the average retiree. The average yearly housing cost for retirees aged 65 to 74 is estimated to be $15,838. Another unexpectedly high cost of retirement is transportation, which costs $8,338 annually. The average annual cost of healthcare is $5,956.

Of course, these are just averages – your actual retirement costs may be higher or lower depending on your individual circumstances. But it’s a good starting point to help you plan for your own end-of-work years.

Let’s now discuss how much you need to retire and what the ideal retirement age might be.

Will You Be Able to Retire Before 45 with 1.5 Million?

Can I retire on half a million dollars before 45? 

Retiring before your 45th birthday is doable, but you’ll need a sizable amount of cash to cover your whole retirement, and in this case, a net worth of $1.5 million may just work.

According to SSA statistics, a 40-year-average old’s life expectancy is around 39 years more. If you anticipate spending a very modest $40,000 per year on all of your expenses, you’ll need at least $1.560 million by the time you stop working. This is just a few thousand dollars short of the mark.

The problem here is how you can save this much money before 45 years old. If you are looking at stopping work at 40 with $1.5 million, then this probably means that you start saving from when you are 20. At $75,000 per year, $1.5 million is achievable. 

Or you could save diligently and develop a really successful investment strategy that will help you grow your egg nest.

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Can You Retire at 45 with 1.5 Million Dollars?

The “four percent rule,” a commonly known financial rule of thumb, suggests that if you remove 4% of your nest egg in the first year of retirement and then factor in inflation each year after that, your savings should last for 30 years. So to answer the question can I retire with $1.5 million at 45? If you can live on no more than $60,000 each year, you can retire at the age of 45 with $1.5 million.

However, working with the SSA life expectancy estimate which suggests that a 45-year-old has about 35 more years to live, a yearly expense of no more than $45k is what you should target to retire at 45 with $1.5 million. Note that while some people can live on $45,000 per year, there are those who cannot.

Can You Retire With $1.5 Million at 55?

If you have $1.5 million saved up and want to retire at 55, this may be enough for you.

The reality is that it all depends on your withdrawal rate — the amount of money you consistently take out of your accounts to support yourself — and how long you live. A reasonable withdrawal rate, for instance, is 4%.

Therefore, if your savings are being depleted at a rate of 4% annually (plus inflation), you will have around $60,000 to live on. This amount will last you for 25 years, which is a reasonable life expectancy for a 55-year-old.

Can You Retire at 65 with 1.5 Million Dollars?

According to recent research, a $1 million retirement nest egg will usually last 19 years. According to a different poll by Schwab Retirement Plan Services, the average American requires nearly $1.9 million to live well after their work years. 

Based on this data, if you stop working at age 65 and live until you’re 85, you’ll have enough money saved for retirement if you have $1.5 million as long as you can live on between 70,000 to 75,000 dollars every year.

Can Two People Retire on 1.5 Million Dollars?

how long will one half a million dollars last in retirement

How much does a married couple need to retire? Is one and a half million dollars enough for a couple to live on?

If a couple has $1.5 million in retirement funds, they can take out $60,000 per year. Added to their Social Security ($2,739 per month or $32,868 per year) and pensions, these sums can provide them with enough income to live comfortably.

Good Net Worth by Age

While there is no fixed net worth by age that you should retire with, the chart below suggests typical averages that you can work with.

net worth of 1.5 million

Can You Live Off 1.5 Million Dollars for the Rest of Your Life?

Is 1.5 million enough to retire at 50? If you are a diligent saver and can live inexpensively, you might be able to do it.

For example, if you are withdrawing $60,000 each year from your savings at the age of 50 and your money is uninvested, you should have roughly enough money to last for 25 years, or until you are 75. Unfortunately, this will not be enough for the 30-year life expectancy (according to SSA statistics).

However, if you have 1.5 million dollars to invest at a 5% annual return and increase annual withdrawals by 3% to account for inflation, it will last you well into 85 years.

Note though that the taxes and penalties you can incur while withdrawing funds from your retirement accounts are just a couple of the additional complications that come with retiring at 50.

How Far Does $1.5 Million Go in Retirement?

Can you retire on $1.5 million and how far will it go? It’s easy to assume that the answer is indefinitely, but that is not the case at all. 

The truth is that your money lasts based on how much you withdraw annually, whether or not your invest (rate of returns), and how much debt you have on your hands before stopping work.

For example, if your money is sitting in the bank without earning any interest and you withdraw $5,000 per month or $60,000 per year, 1.5 million dollars for retirement will last for about 25 years.

In the same scenario, but with a 3% return on investment, your money will last for 45 years and 3 months. 

You can use a savings calculator to find out how long your money will last based on your withdrawal rates and investment returns.

It is also important to remember the impact of inflation in your calculations.

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When $1.5 Million Isn’t Enough?

A person’s lifestyle and spending determine if $1.5 million is enough or not, says Erik Miller, vice president at IWA, investment management consultant in Portland, OR.

In addition, the nest egg can fall short of expectations if the nest egg is spent excessively early on after retirement and near the end of life due to medical and long-term care expenses.

This is why it is important that you learn how to grow your wealth with financial planning, and an expert should help you with this.

How Much Money Do You Need To Retire Anyway?

Can I retire on $1.5 million or do I need more or less? When it comes to retirement, the amount of money you need to save can vary greatly depending on your savings plan and the lifestyle you wish to have in your golden years.

One source suggests saving 15% of your gross earnings in your twenties and continuing until you stop working. This should include savings in different accounts as well as any employer-matched contributions.

Another way to achieve this is by working with the table below.

301x your income
352x your income
403x your income
454x your income
506x your income
557x your income
608x your income
6710x your income

This means that for an income of $80,000, you should have saved up $640,000 to retire at 60. Investing just 50% of this amount over the rest of your life or for 20 years with an estimated 5% return will add more than $800,000 to your pot.

Making Retirement Easy: Tips to Start Saving $1.5 Million for Retirement

Do you think you are not saving enough to retire with 1.5 million dollars? You are not alone. According to this PwC data, 25% of workers don’t even have retirement savings.

Here’s what you can do to meet your target.

Make Sure You Start Saving For Retirement As Early As Possible.

You need to start saving for your post-work years as soon as possible, so it’s best to do it in your 20s or 30s. If you wait until later, you may find yourself unable to get started because of other responsibilities and commitments.

Save 10% To 15% of Your Annual Pretax Income For Retirement.

Save at least 10% of your pretax income each year for retirement, and ideally 15%. If you don’t have enough money saved up, make an effort to save more next year. If you’re already saving 15%, consider setting aside an additional 5% for emergencies and unexpected expenses that could arise during retirement (such as medical bills).

Get Rid of Any High-Interest Debt You Have.

Debt is one of the biggest obstacles to long-term financial success — so get rid of any high-interest debt or credit card balances. Pay them off as quickly as possible. This will help the amount of money available for saving grow faster than if those debts weren’t paid off first!

how long will 1.5 million last in retirement

Put Most of Your Savings Into High-Yield Investments.

High-yield investments are investments that pay higher interest rates than standard savings accounts, money market accounts, or certificates of deposits. You can use this money to make larger contributions to your nest egg or to pay down debt. However, high-yield investments often come with risks that you should be aware of before investing.

Work with a registered retirement consultant to determine options that make sense so you don’t lose all your money.

Make Use of Tax-Efficient Options.

If you have been saving in a regular savings account, you may be able to get more tax benefits by switching to a tax-efficient account. This will ensure that all your investments are taxed at the lowest rate possible.

Read also What is the Difference Between an IRA and a 401k?

Although both plans offer significant tax benefits, the difference between a 401k and IRA is that employers provide 401(k)s, while individuals open and control IRAs via brokers or banks.

The best way to do that is by using a savings approach which will allow you to avoid the taxes that come with regular savings. Roth IRA planning is a good way to go about this. With a Roth IRA, you don’t pay any taxes on the money when it’s contributed, instead, it grows tax-free until you’re ready to withdraw it at retirement age.

Also, if some conditions are satisfied, annuities bought using a Roth IRA or Roth 401(k) can also be tax-free.

To Sum Up

If you’re like most people, your savings plan is probably a little hazy. You might know that you want to retire someday, but you don’t know how much money you’ll need, what kind of lifestyle you’ll enjoy, or how you’ll pay for it all. Or maybe you are wondering “how do you retire with $1.5 million?”

This is where retirement planning comes in.

Interactive Wealth Advisors can work with you to find the best strategy for your situation. Our services include retirement income planning, financial estate planning, IRA planning, social security benefits, wealth management for business owners, and lots more.

Our advisors understand that each person has unique financial circumstances and preferences, so we will work with you to create a personalized plan that fits your needs and goals.

So whether your plan is to have a 1.5 million dollar nest egg before you resign or you are looking at stopping work completely when you are 40, get in touch, and let us work something out for you.


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