Can You Retire on $2.5 Million?

Imagine a retirement free from financial constraints, where you can travel the world or the country in a brand-new RV.

Making your $2 million last in retirement is difficult, even with special access to the same cheat sheets we utilize to assist our clients in retiring.

Investors who want to maintain their hard-earned lifestyle into their golden years frequently ask themselves this question.

Let’s face it: Your ideal European vacation or that brand-new RV won’t pay for itself.

A $2 million retirement fund, which promises a comfortable life after retirement, is the stuff of dreams for many people. But for some, this amount might only be the start of their financial planning journey.

The answer hinges on your unique lifestyle and expenses. And let’s not mince words: managing your finances in retirement can be likened to a difficult marathon, complete with obstacles of its own.

Granted, $2 million may appear like a huge amount, but keep in mind that retirement is a long-term endeavor.

Planning ahead and overcoming financial challenges are essential if you want to make sure your savings last you throughout your retirement years.

In this article, we analyze whether $2 million is actually sufficient based on the amount of money you require from your portfolio each month to augment other income streams like social security or a pension.

We are sharing with you the insider information from five distinct case studies, all updated to reflect financial developments in 2024 and beyond. In each, a fictional couple with various lifestyle requirements is examined.

Today, things aren’t getting any easier for future retirees. As prices rise sharply (hello, inflation) and the bond and stock markets become increasingly volatile, it becomes more difficult to ensure that your $2 million will be sufficient to keep you comfortable.

Numerous studies indicate that the fear of running out of money well before reaching retirement age is a major concern for those who are approaching or have just begun retirement.

The worst part is that determining whether $2 million is sufficient increases in difficulty as one ages.

People are living longer (great, huh?) because of improved healthcare, so your retirement funds need to last at least 30 years.

The catch is that social security, or government retirement assistance, may only pay for between 2020 and 40% of what you spend in retirement.

Also, many retirees find that delaying taking social security benefits until after they turn 70 will increase their long-term income.

Therefore, you may need to rely much more on your $2 million in savings between the ages of 60 and 70, at least until your social security check starts to arrive.

You should continue reading if you’re interested in the specifics of the study because it gets even more fascinating after this.

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Yes, it is possible to retire on $2.5 million for most people. This amount, when invested wisely, can generate enough income to cover your living expenses and provide a comfortable lifestyle in retirement. However, there are several factors to consider when determining if $2.5 million is enough for you to retire.

Factors to Consider:

  • Your desired lifestyle: The amount of money you need to retire comfortably will depend on your desired lifestyle. If you plan to live a modest lifestyle, you may be able to retire on less than $2.5 million. However, if you plan to travel extensively or have other expensive hobbies, you will likely need more money.
  • Your age: The younger you are when you retire, the longer your retirement savings will need to last. This means you will need to have more money saved to retire early.
  • Your health: Your health can also impact how much money you need to retire. If you have health problems, you may need to set aside more money to cover medical expenses.
  • Your investment strategy: The way you invest your money can also impact how much you need to retire. A diversified investment portfolio can help you generate more income and protect your savings from inflation.
  • Your Social Security benefits: Social Security benefits can provide a significant source of income in retirement. The amount of benefits you receive will depend on your earnings history.

How to Make $2.5 Million Last in Retirement:

  • Invest wisely: Invest your money in a diversified portfolio of stocks, bonds, and other assets. This will help you generate income and protect your savings from inflation.
  • Create a budget: Create a realistic budget and stick to it. This will help you avoid overspending and ensure that your money lasts throughout retirement.
  • Work part-time: Consider working part-time in retirement. This can help you supplement your income and stay active.
  • Downsize your home: If you have a large home, consider downsizing to a smaller one. This can save you money on housing costs.
  • Travel during the off-season: If you enjoy traveling, consider traveling during the off-season. This can help you save money on flights and hotels.

Additional Resources:

Retiring on $2.5 million is possible for most people. However, it is important to carefully consider your desired lifestyle, age, health, investment strategy, and Social Security benefits to determine if this amount is enough for you. By following the tips above, you can increase your chances of having a comfortable and financially secure retirement.

Additional Information:

  • The average retirement savings for Americans is $172,000.
  • The average Social Security benefit is $1,827 per month.
  • The average life expectancy in the United States is 78.6 years.


This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.

Case Study 2: $2 Million Portfolio with $4,000 After-Tax Income Distribution

In the second case, Joe and Mary take out $4,000 from their $2 million investment each month. This is an increase of 33. 33% from case study 1.

They will require this income in addition to any other sources, like social security or pensions. The money must last until they each reach age 95.

Here are some additional assumptions for case study 2:

  • Starting portfolio value: $2 million dollars
  • After-tax portfolio income per month: $4,000
  • Retirement age: 60
  • Retirement start date: January 1, 2023
  • Retirement time horizon: 35 years
  • Portfolio mix: 60% stocks 40% bonds

The Monte Carlo Simulation indicates that the likelihood of money remaining after retirement drops to %2087%.

This is not a low probability. However, the increased retirement income drawdown from scenario two resulted in a lower chance of success.

can you retire on 2 5 million dollars

can you retire on 2 5 million dollars

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Case Study 3: $2 million Portfolio with $5,000 After-Tax Income Distribution

In the third case, Joe and Mary take $5,000 out of their $2 million portfolio each month. This is an increase of 25% from case study 2.

They will require this income in addition to any other sources, like social security or pensions. The money must last until they each reach age 95.

Here are some additional assumptions for case study 3:

  • Portfolio value: $2 million dollars
  • After-tax portfolio income per month: $5,000
  • Retirement age: 60
  • Retirement start date: January 1, 2023
  • Retirement time horizon: 35
  • Portfolio mix: 60% stocks 40% bonds

Case Study 3 shows Mary and Joe having a higher monthly income. The probability that $5,000 after taxes will last for 35 years decreases with each passing month.

In this instance, increasing spending increases the likelihood of running out of money to 2069%! This is a significant decrease from Scenario 2%, which is 2087%.

It’s nothing to laugh at, and the 2018 difference can have a significant effect on their ability to make their savings last.

can you retire on 2 5 million dollars

Can You Retire with $2 5 Million? The Answer is No. No You Can’t


Is 2.5 million good for retirement?

Ultimately, $2.5 million can reasonably support retiring at 60 if assumptions around withdrawal rates, taxes, healthcare costs and other factors hold up. Being flexible about expenses and having some income options as a potential backup provide wiggle room in case things don’t work out exactly as expected.

Is $2 million enough for 2 people to retire?

As a general rule, most retirees and pre-retirees underestimate what their expenses will be. A $2 million nest egg is substantial and can provide financial security for many couples, but whether it’s enough for you depends on various factors.

What is considered wealthy in retirement?

Wealthy: To be considered well off, a person must be in the 90th percentile, possessing a household net worth of $1.9 million. This level of wealth affords trips, charity donations and college funds for children.

What percentage of retirees have $3 million dollars?

According to EBRI estimates based on the latest Federal Reserve Survey of Consumer Finances, 3.2% of retirees have over $1 million in their retirement accounts, while just 0.1% have $5 million or more.

How much money can you retire on 2 million?

Your ability to retire on $2 million depends on your expenses in retirement. Because lifestyle drives monthly expenses, your activities and hobbies may run up against your $80,000 annual income. This amount equates to $6,666 per month.

How much money can you retire with?

If more than 90 percent of people can retire with far less than $2.5 million, it’s likely that will be enough for you. A nest egg of $2.5 million could generate $100,000 in income per year if you tap your accounts at the widely cited 4% sustainable rate of withdrawal.

Is 2 million enough for a happy retirement?

Yes, $2 million should be enough to allow you to enjoy a comfortable, happy retirement that suits your needs and preferences. You retire at 61 – With an estimated life expectancy of 90, you need 29 years of income. Across those years, $2 million could equate to approximately $68,966 annually or $5,747 monthly.

Can a 55-year-old retire with $2.5 million?

Retiring at 55 with $2.5 million is certainly feasible, as evidenced by the fact that this is far more than the vast majority of people have when they stop working. Only about 1 in 10 retirees have even $1 million saved, according to the Federal Reserve’s Survey of Consumer Finances.

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