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Can You Retire With 1.5 Million Dollars? (Hint: You Can!)

With the current cost of living for many people, you may be wondering how much you will need to retire. Can you retire with 1.5 million dollars? 1 million? 2 million? Exactly how much do you need? Let’s talk about it!

What is a reasonable amount of money to retire with?

There’s a ton of different numbers thrown out there for retirement these days. Some even stretch up to $5 million or beyond! But are they necessary?

If you want to just keep living a modest life, what is a reasonable amount of money to retire with?

This will all depend on your current income, as well as your cost of living…But generally, you need about 80% of your final pre-retirement annual income. In other words, if you make $100k a year, you’ll need approximately $80k a year in retirement.

How much money does the average American retire with?

Reading that may make you wonder how much the average American has when they retire.

And well… it’s not a lot.

In fact, the median retirement nest egg is under $400,000. But, that doesn’t mean that you can’t (and shouldn’t) save more to live comfortably! After all…the average person is broke, so don’t be shooting for average!!

Can you retire with 1.5 million dollars?Can you retire at 60 with 1.5 million dollars?

Have $1.5 million saved for retirement? Wondering if you can retire at 60 with 1.5 million dollars?

You can! And this is just as easy as retiring at 65-70 (when you can collect benefits).

Gauging by the 4% rule, you can withdraw $60,000 a year. And, if you’re used to living on $70,000 or less today, this is probably totally doable!

The only thing that you’ll need to remember is that healthcare won’t be covered for a few years. But, if you can make it work for 5 years, then it’s entirely possible to retire early with 1.5 million dollars at 60 years old.

Related: How to Save 1.5 Million For Retirement (…And Is It Really Enough??)

Can you retire at 55 with 1.5 million dollars?

Okay…so it’s possible to retire at 60 with 1.5 million dollars, but what about earlier? Can you retire at 55 with 1.5 million dollars?

Yes!

This is called early retirement (or FIRE) in most cases, and many people are already doing it.

And, to give you some surety here, according to Bankrate’s savings withdrawal calculator, if you earn just 4% on your $1.5 million and withdraw $60,000 a year, after 50 years, you’ll still have $1.29 million!

Again, if you retire early, remember to have health insurance (or be able to cover emergencies) as well as check to see if you’ll have any penalties for taking money out of investments.

If you build a passive income portfolio, you may be able to avoid withdrawing money at all (or at least push it out a few years).

Can you retire at 45 with 1.5 million dollars?

So…you can retire at 60 with $1.5 million…and at 55…What about younger? Can you retire at 45 with 1.5 million dollars?

This may be pushing early retirement just a bit. But that doesn’t mean it can’t be done!

However, this will depend on a few factors, like:

  • Do you have debt?
  • Are there still children in the home?
  • Do you live in a high cost of living area?
  • Will you be able to cover medical costs for you and/or your family?
  • Do you have enough to cover you for 30-50 more years?

If you can’t answer those questions and feel confident in being able to make early retirement work, you may want to wait a few years.

But, if you can live comfortably on the infamous $60k a year we’ve been discussing, then you might just pull it off! Of course, as we mentioned, there are many factors at play here, so you can never say for sure. But, if you had a little side income in retirement (very few retirees do absolutely nothing), that might just give you the comfort you need to pull the plug on your day job and give early retirement a go at age 45!

Related: Keep Investing Simple: The Secret to Wealth

Can you retire with 1.5 million dollars? It's possible!Can I retire early with 2 million dollars?

Not sold on the $1.5 million number? What about a little more? Can you retire early with 2 million dollars?

You sure can!

In fact, two people should be able to retire with 2 million dollars if they are able to live simply and lean, have paid off all of their debts, and can afford their lifestyle (including medical costs).

Related: Early Retirement – Is It Really Possible?

What age can you retire with $2 million?

With $2 million (if single), you could easily retire at 45-50 years old. Of course, this all depends on your current lifestyle and there are many factors that come into play. But, if withdrawing at 4% a year, $2 million will last 25 years at $80k a year, or 50 years at $40k a year (and that’s with earning absolutely no interest on your money!!).

Related: What Is The Interest on 2 Million Dollars? (…And Is It Enough??)

What is a good net worth by age?

There is no fixed net worth by age. But, the averages vary, and at the very least, you can stick to those averages.

As it stands, the average net worth by age is:

  • <35 – $76,300
  • 35-44 – $436,200
  • 45-54 – $833,200
  • 55-64 – $1,175,900
  • 65-74 – $1,217,700
  • 75+ – $977,600

As you can see, these numbers fluctuate, and only account for the average. However, this is a great starting point to see if you’re on track to retire.

Related: Average Net Worth By 30: How Do You Compare?

What is a good monthly retirement income?

The average monthly retirement income is around $2,000 a month, or $24,000 a year. But for some people, that may not be enough.

A good monthly retirement income for you will be one that will help you live comfortably. If you’re unsure of what you’ll need, add up your current expenses. This is about the average of what you’ll need each month, plus a couple of percentage points for inflation, higher medical costs, etc.

So what is a good monthly retirement income? 

For many, a good retirement income per month would be between $4,000 and $5,000 ($48k-$60k a year).

This may reduce once you pay off debt, lower your family members in the home, and other cost reductions. But overall, your lifestyle shouldn’t (and probably won’t) change much during retirement.

Social security moneyWhat is the average social security check?

When you wonder, “Can I retire with 1.5 million dollars?”, the other question that quickly comes to mind is, “How much will my social security check be?”

While many people under 50 shouldn’t depend on getting traditional social security during retirement, that doesn’t mean it won’t happen.

The average social security check in 2021 was $1,543 a month.

Remember, this is just the average. Yours may be lower or higher depending on new laws, social security as a whole, and what you put into it.

How long would 1.5 million dollars last in retirement?

If you follow the 4% withdrawal rule, $1.5 million dollars could last 25 years at $60,000 income a year, or 50 years if withdrawing $30,000 a year (again, this is without any interest earned on that money!). If you think you’ll need more than $60,000 or plan on living longer than 25 years, you’ll need to either save more or cut costs.

What if you earned 4% on your money? Then how long would 1.5 dollars last in retirement? What if you withdrew $80,000 a year?

The answer: 33 years

If you’re 65 years old and want to live a little large (on $80k a year) in retirement, that’s probably fine! You’d run out of money when you turn 98. (Hope this isn’t a buzz-kill here…but you’ll probably be dead by then. ;)).

Related: How to Make 2 Million Dollars (Realistically)

How To Make Retirement Easy

So, how can you prepare for retirement and make it easy to live off of 1.5 million in retirement? It’s actually pretty simple! Here are the steps I plan to take!

Pay Off Debt

The first thing you’ll want to do is get rid of your debt. Retiring with debt obligations can cause stress and worry that no one should have to deal with.

Of course, the most important debt to pay off is high-interest or consumer debt (like personal loans or credit cards). After that, you can focus on student loans, your mortgage, and other lower-cost loans.

The key is to make sure that your living expenses are as low as they can be. If you have high amounts of debt, you’ll have to continue to pay them off with the money you could be enjoying.

Related: The BEST Debt Snowball Excel Template (and it’s FREE!!)

success comes from where you liveLive In A Lower Cost Of Living Area

Another important thing to look at is your area’s cost of living.

  • For example, it’s much cheaper to retire in Alabama than it is in California.
  • And, rural or suburban areas are usually cheaper than the middle of the city.

Now, this is not to say you CAN’T live in a higher cost of living area. But, the lower your housing and area costs, the longer you can live on your retirement funds.

And, certain states and countries offer benefits for retirees, so you could save money that way as well.

Related: Wealth Comes From Where You Live…Not Your Salary

Wait For The Benefits

When it comes to retirement, the longer you wait, the more you can get. For example, Medicare doesn’t kick in until you’re 65 years old. And, you’ll receive penalties if you withdraw your retirement income before 59 1/2.

When you’re thinking about retirement, often times the best thing to do is wait until you’re 65 so your benefits will immediately kick in.

But, if you want to retire early, you’ll need to make sure that you can fund your medical costs, bills, and other needs before you reach that age.

Stay Busy

For many people, boredom = spending money. And, retirement has been shown to cause depression, mental decline, and even physical decline.

No one wants that!

While you won’t have to work anymore, focus on staying busy.

You can…

  • volunteer,
  • garden,
  • get a part-time job (if you enjoy it),
  • pick up some hobbies,
  • or spend time with loved ones more.

But it’s just important to keep it moving and find a purpose outside of making money.

How to invest 1.5 million dollarsContinue To Invest

The question, “Can you retire with 1.5 million dollars?” actually becomes easier if you’re okay with investing while you’re retired.

So, want to keep that money growing, even without you working?

Easy, just re-invest funds.

This could be money that you don’t end up spending, dividends, or even passive income. This money will continue to sit and collect interest, even if you’re not working and saving in traditional routes like 401(k)s.

Or, just don’t touch your money unless you need to! For example, if you make passive income from a business, like real estate, live off of that money instead of your investment money. That way, that money can continue to grow.

Related: How to Invest 1 Million Dollars (…to Make Another Million!!)

Where To Retire With 1.5 Million Dollars

If you’re still wondering if you can retire on 1.5 million dollars, you might feel a little bit better if you can go somewhere where the dollars will stretch farther!

Because of course, the cheaper your living, the longer you can live comfortably in retirement.

Early RetirementBut, where are some cheap places for American retirees to live?

If staying in the US, here are the best states for retirees:

  • Florida
  • Tennessee
  • Missouri

If moving outside the US, here are the best countries to move to:

  • Costa Rica
  • Panama
  • Portugal
  • Germany
  • Greece

Related: Top 5 Places to Retire Outside the USA

Can You Retire With 1.5 Million Dollars?

So, to sum it up…can you retire with 1.5 million dollars? 

YES!!

It’s entirely possible to retire with 1.5 million dollars!

Of course, it will depend on the lifestyle you live now, and the lifestyle you’ll want to live in the future. But, the key will be planning and executing so you can live your golden years in comfort.

So what about you? Do you want to retire on 1.5 million dollars? Do you think you’ll pull the trigger soon??

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AUTHOR Kimberly Studdard

Kim Studdard is a project manager for online entrepreneurs and small businesses. When she isn't spending time with her daughter and husband, or reading her growing pile of horror books, you'll find her working on her HR degree and working towards FIRE.

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