Is 1 millon dollars enough for early retirement?

One million dollars may seem like a ton of cash. Is it really that much nowadays and can I allow you to quit your job and retire early without ever worrying about money?

Today we will try to answer that question with details. All the calculations presented in this article are made using our living from savings calculator. If you wish to analyze your own case you should try it. 

For the purpose of this report we need to make several assumptions. For starters we will be talking about a decent standard of life on retirement. What's the point of early retirement if it would need decades of constant sacrifices?

Second we will analyze the case of couples since it’s the only realistic approach. It’s hard to imagine the retired husband traveling the world on early retirement while his wife needs to take double shifts in Walmart.  

Ok let’s put the jokes aside. For the purpose of this report we assumed that $5k a month is enough for a household (with no debt) in most parts of the United States. 

We have also assumed that you will not keep all the money in the bank account on a lousy interest rate, but have it invested in a diversified portfolio of high yield asset classes like stocks, REITs, ETF etc.

Of course our calculations include taxes you will be ought to pay from the interest earned. 

Let’s wrap up all the initial criteria:

As you see in the calculation below, if your monthly spending will not exceed your capital will never be depleted so you could pass it on to your kids or increase the standard of your retirement by spending not just interest but some part of the accumulated capital each month.

Initial savings: $1 000 000,00
Interest rate: 8%
Monthly withdrawal: $5 000,00
Annual increase of withdrawal: 0%
Your savings will last for: over 100 years

Assuming you will not just keep your capital in a savings account but have it invested in high yield asset classes like stocks or REITs with average return rate of 8%, you could withdraw $5 000,00 a month for over 100 years until your capital of $1 000 000,00 gets depleted.

Unfortunately, this assumption is rather optimistic and in practice difficult to replicate in real life. For several reasons:

Interest rate of 8% is too optimistic

Although assumed APR of 8% is what you could expect from stocks, it is advised to lower your exposure to high volatility assets during retirement. So in practice your $1 000 000,00 will give you a lower return rate than in the example above.


What’s more the example above does not consider inflation which is a main obstacle in long term investing.


As you probably expect you will have to pay income tax from interests earned on your capital. The calculation below assumes that those $5 000,00 is after tax deduction.

Can I retire on $1 000 000,00?

In most cases yes. You can retire with $1 000 000,00. Below we describe what criteria you should meet in order to retire early with $1 000 000,00 in savings. You could calculate your own scenario using our calculator.

In order to find the precise answer you need to ask yourself the following questions.

How much money do I need per month?

Answering this question is a key to preparing a retirement plan. If your monthly expenses are in balance there is a high possibility you will be able to quit your job with $1 000 000,00 in savings, but if your costs of living are very high there is no chance that $1 000 000,00 will be enough for early retirement.

It’s very important to be as precise as possible. You need to calculate not only your regular daily expenses for food and bills.

You should also include expenses you pay once a year like property tax, insurances etc. Finally you should add a reserve to some unexpected events like car and home repairs. The best way to do that is to add extra 20% to 30% to the projected monthly expenses.

What is my projected time on the retirement?

This question is as important as the previous one. The situation for people in their 30s or even 40s is much different than those above 50 years old.

The older you are, the less money you will spend on retirement. Therefore older people have an advantage against millennials.

At the end of the article we present the table with calculations of how much money you could withdraw per month from your saved $1 000 000,00 depending on your age.

What is my effective interest rate from your investments?

The compound interest is your greatest ally. Thanks to this magic formula, you will be able to benefit twice from each dollar you make and that $1 000 000,00 you have saved will last longer.

The table below shows how much interest per month you can get from $1 000 000,00 depending on the average interest rate of your portfolio.

Interest rate Monthly interests Tax Interests after tax
4% $3 350,00 $502,50 $2 847,50
5% $4 187,50 $628,12 $3 559,36
6% $5 025,00 $753,75 $4 271,25
7% $5 862,50 $879,37 $4 983,11
8% $6 700,00 $1 005,00 $5 695,00
9% $7 537,50 $1 130,63 $6 406,86
10% $8 375,00 $1 256,25 $7 118,75

How high will the inflation be in the future?

Another important factor that is most often forgotten is inflation. The biggest enemy of savers. It should never be underestimated since even low inflation of 1% to 2% could ruin your plan of early retirement.

The table below shows how $1 000 000,00 will decrease in value over time due to inflation.

Inflation Initial value Future value after:
10 years 20 years 30 years
1% $1 000 000,00 $918 484,04 $843 612,90 $774 844,89
2% $1 000 000,00 $843 562,59 $711 597,72 $600 277,06
3% $1 000 000,00 $774 705,79 $600 168,93 $464 954,09
4% $1 000 000,00 $711 426,40 $506 127,34 $360 072,15

For more details you may visit our inflation loss calculator to check how much will be $1 000 000,00 worth in future.

How long will $1 000 000,00 last in retirement?

This depends mostly on two factors: the amount of monthly withdrawals and the effective interest rate of your investments. The table below shows how long your savings will last depending on those two factors. The calculations assume that entire amount of $1 000 000,00 will be invested, and you will receive regular interests. In most cases in order to keep certain standard of living you will need to spend not just the interest, but some portion of accumulated capital as well.

Interest rate Monthly withdrawal Savings will last for
4% $4 000,00 36 years 3 months
$5 000,00 24 years 7 months
$6 000,00 18 years 9 months
$7 500,00 13 years 11 months
6% $4 000,00 1000 years 1 months
$5 000,00 37 years 3 months
$6 000,00 24 years 2 months
$7 500,00 16 years 5 months
8% $4 000,00 1000 years 1 months
$5 000,00 1000 years 1 months
$6 000,00 42 years 7 months
$7 500,00 20 years 9 months
10% $4 000,00 1000 years 1 months
$5 000,00 1000 years 1 months
$6 000,00 1000 years 1 months
$7 500,00 34 years 1 months

As you see if you keep your expenses in check you could retire with $1 000 000,00 in savings. With the monthly withdrawals of $4 000,00 you wil be more likely to retire than if you keep spending $7 500,00 a month.

High interest rate is also an important factor, however since you won’t have direct control over it is best to assume low performance of your investments and be positively surprised eventually.

How to retire with $1 000 000,00?

Once you know what criteria should be met in order to be able to retire with $1 000 000,00, you could prepare your plan.

  1. Calculate your monthly living expenses. Try to be as accurate as possible.
  2. Calculate how much interest a month you make from $1 000 000,00 in savings. You can use our interest calculator.
  3. Deduct income tax from the interest earned.
  4. If the interest amount after tax may cover your expenses you could safely retire.

If you wish to retire comfortably with $1 000 000,00 you can live not only from interests but you could start spending saved capital. However such an approach carries a risk that your savings will get depleted sooner than you might expect.

At what age can you retire with $1 000 000,00?

If you are young in your 20s or 30s you might need to accumulate higher capital or wait a few more years. Below we will analyze at what age you could retire safely with $1 000 000,00.

How can you retire early at 35 with $1 000 000,00?

To be completely honest it will be very difficult. It will require a lot of effort and a bit of luck.

  1. You need to decrease your spending in order not to deplete $1 000 000,00 too soon.
  2. You need to take some risk and invest aggressively in order to reach a high return rate.

Of course you can always move to a country with lower costs of living where you can retire with $1 000 000,00.

How can you retire early at 45 with $1 000 000,00?

This scenario will be difficult as well but much more probable than retirement at 35 with $1 000 000,00. These additional 10 years make a big difference.

  1. You need to decrease your spending in order not to deplete $1 000 000,00 too soon.
  2. You need to invest your savings with a decent interest rate, but it could be a balanced portfolio according to the 60/40 rule.

How can you retire early at 50 with $1 000 000,00?

If you are reasonable and could keep your spending in check, $1 000 000,00 is more than enough to retire early. This is much sooner than the official retirement age in the US and any other country. With Calcopolis you can estimate your standard of life on that early retirement.

  1. Visit our living from a savings calculator.
  2. Fill in the form with all necessary data like your desired retirement income, expected interest rate and income tax value.
  3. The calculator will give you precise information if the analyzed scentario is viable or not.

Can you retire early with 1 million dollars?

Yes, you can retire early with 1 million dollars. However, that amount of money is not worth that much nowadays, so it will not allow you to live like a millionaire. Apart from that your standard of living will be quite good, even for the US standards.

If you retire in your 50s or later you could significantly increase the monthly spending and live not just from the interest, but withdraw a little bit each month from the accumulated amount. If you wish to know how much potentially you could spend each month, check it out in our calculator

If you are much younger -  early retirement with one million in assets is still possible, however you need to keep your costs of living in check in order to not run out of money.

If you don't have that much money but you are close, check out our report: is $800k enough for early retirement? or if on the contrary yo u have much more money and wish to check how high your stadard of life could be visit our report: Is 1.5 millon enought for FatFIRE?

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