Can you retire on $1.5 million? 

1 min readLast updated June 4, 2024by Rachel Carey

Read this complete guide to retirement with $1.5 million in savings, from options surrounding leaving the workforce early to the ins and outs of your retirement income taxes.

What is the average retirement saving amount in 2023? 

As per figures from the Economic Policy Institute, the median retirement savings amount among all working-age households in the US is roughly $95,776. This number includes 401(k) accounts sponsored by employers and IRAs (Individual Retirement Accounts), both traditional and Roth. It does not, however, account for additional income that might be available to retirees, such as Social Security benefits.  

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From this, with $1.5 million, you might think you’re far above the amount needed for a worry-free retirement. But the average is not necessarily a place to aim for. According to the Federal Reserve’s report, “Economic Well-Being of US Households in 2022,” 31 percent of non-retirees felt that “their retirement savings plan was on track, down from 40 percent in 2021.”  

There is a gulf between average and ideal, and it appears to be growing with the cost of living. Thankfully, $1.5 million in savings is far more aligned with the latter than the former. Let’s explore the specifics of your situation and the impact they might have. 

Is $1.5 million enough to retire on? 

On paper, $1.5 million could fund a retiree for 20 to 40 years, especially if it were held in the correct accounts and the proper investments were made to continue replenishing.  

If, for instance, a person retired at 60 and hoped to live to be 90, they would need to fund 30 years. With $1.5 million, not accounting for that money's growth or the market's fluctuations, this would roughly equate to $4,167 per month. 

But off paper? The picture is more complex and subject to your situation. Some variables and questions are worth considering as you decide how much is enough to retire. Most notably, these four: 

  1. What kind of lifestyle do you want to lead as a retiree? – maintaining a luxurious retirement lifestyle from 50 until your death would put a very different strain on your $1.5 million than maintaining a modest retirement lifestyle from the age of 60 until your death. 

  2. Will you have any considerable expenses to account for as a retiree? – somewhat tied to the above, you must recognize significant financial commitments that may reduce the monthly amount you pocket. If you plan to keep these commitments up, will $1.5 million give you enough money to do so while supporting yourself? 

  3. At what age do you want to retire? – many people with over a million dollars set aside for retirement choose to retire early. By calculating your likely annual and monthly income, you can determine how early would be possible and comfortable in your circumstances.  

  4. Are you receiving advice and guidance to help you properly manage your $1.5 million sum? – this much money can easily make more money if handled correctly. To best do this, speaking to a professional financial advisor is wise. You can find an advisor perfectly suited to meet your needs with Unbiased. Answer a few simple questions and get matched here 

How long will $1.5 million last in retirement?  

How long will my money last in retirement? This question again depends on the factors we’ve outlined above and can be tricky to answer individually. It will last you longer if you spend less, living a modest and minimalist lifestyle. It will also last longer if you save and invest, even as a retiree. 

According to 2022 Gallup data, the average retirement age in the US is 61. If you retire at 61 with $1.5 million, you’ll be able to receive at least $4,310 a month until the age of 90 (or until your death). Here’s how that scenario might look for a few different retirement ages: 

Your planned retirement ageYour minimum annual retirement income from your $1.5 million (assumed life expectancy of 90)Your minimum monthly retirement income from your $1.5 million (assumed life expectancy of 90)
60 $50,000 $4,167
55 $42,857 $3,571
50 $37,500 $3,125
45 $33,333 $2,778
40 $30,000 $2,500

What are the income taxes applicable to retirees with $1.5 million? 

If you’ve managed to save $1.5 million for retirement, tax will be an essential factor, influencing the income you receive in contrast to the estimates provided above.  

Two things will define the amount of tax due on your retirement income. The first is how your money is held and whether this reduces expected liability. Roth IRAs, for instance, are after-tax accounts, and withdrawals at retirement age are tax-free. Similarly, investments you’ve held onto for over a year are often taxed as long-term capital gains, which can help wealthier individuals avoid the highest marginal rates of federal income tax. 

The second is your total annual income. With a few exceptions, you’ll be taxed on this at the state and federal levels. There are nine different federal income tax brackets in 2023. With rates ranging from 10 to 37 percent (accounting for $1.5 million distributed across 20 or 30 years), you’re unlikely to be able to access one below about 22 percent.  

Can you retire at 50 with $1.5 million? 

As you may have realized by this stage, it is possible to retire at 50 with $1.5 million, but it may not be as easy as you’d expect from seeing that significant figure in isolation. Using basic estimation and referring to the table above, we can see that retiring at 50 with an anticipated life expectancy of 90 should give you approximately $3,125 per month.  

This is more than enough to live on, especially if you’ve paid off your mortgage by the time you retire, but it may not be enough to fund a more expensive lifestyle. You may be used to that lifestyle, with no plans to let it go as a retiree. 

If this is the case, you’ll either need to choose a later age to retire or consider growing your savings and granting yourself access to more than $1.5 million. 

Three ways to increase your retirement savings 

If $1.5 million doesn’t feel sufficient and you’d like to keep increasing your retirement savings amount, which may well be the case if you hope to retire early and maintain your current lifestyle, we can help. We recommend that you: 

  1. Use the money you don’t need immediate access to wisely – with wealth over a million and a good-sized emergency fund, you can feel more comfortable than most with locking your money away in high-interest accounts and high-yield investments for the longer term. In time and with patience, you’ll see the benefits of doing so. 

  2. Find a financial advisor who knows your situation well – a financial advisor who understands your plans and goals can help align your finances to meet them. The better your advisor knows you, the more they can work to get you exactly what you want. To build you a portfolio that is 100% suited to your needs. 

  3. Be conscious of estate planning and retirement planning – as you plan for retirement, put your mind to estate planning, too, and protect your wealth in that manner. Doing this allows you to minimize tax liability for your beneficiaries and yourself, utilizing things like the gift tax exemption. 

The bottom line 

You should now have a clear sense of how far $1.5 million can take you to fund your retirement and better understand the factors that impact this. From lifestyle to early retirement plans, a lot goes into shaping your golden years. Planning ahead with consideration of all eventualities is essential. 

If you’re in any doubt about your situation or fully realizing the value of seeking expert financial advice, contact a financial advisor who can help you make confident financial decisions regarding your retirement. An expert, SEC-regulated financial advisor is just a few clicks away 

Senior Content Writer

Rachel Carey

Rachel is a Senior Content Writer at Unbiased. She has nearly a decade of experience writing and producing content across a range of different sectors.

Looking to retire on $1.5 million?

A financial advisor can build a retirement plan tailored to you