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 living 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 at 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 at a lousy interest rate but have it invested in a diversified portfolio of high-yield asset classes like stocks, REITs, ETFs, 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:

• Your monthly retirement expenses will be $5k a month
• The capital will be invested with an average annual interest rate of 8% 
• You will pay 15% income tax from the interest you earn

As you see in the calculation below, if your monthly spending does 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.

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 an average return rate of 0.08%, you could withdraw $50,00 a month for 16 years 9 months until your capital of $10 000,00 gets depleted.

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

The interest rate of 8% is too optimistic.

Although an 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 $10 000,00 will give you a lower return rate than in the example above.

Inflation

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

Taxes

As you probably expect, you will have to pay income tax from interests earned on your capital. The calculation below assumes that those $50,00 are after-tax deductions.

Can I retire on $10 000,00?

In most cases. yes. You can retire with $10 000,00. Below we describe what criteria you should meet in order to retire early with $10 000,00 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 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 $10 000,00 in savings, but if your costs of living are very high, there is no chance that $10 000,00 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, insurance, 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 an extra 20% to 30% to the projected monthly expenses.

What is my projected time of retirement?

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

The older you are, the less money you will spend on retirement. Therefore older people have an advantage over 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 $10 000,00, 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 $10 000,00 you have saved will last longer.

The table below shows how much interest per month you can get from $10 000,00, depending on the average interest rate of your portfolio.

Interest rate	Monthly interests	Tax	Interests after tax
-3.92%	- $32,-82	$0,-4	- $32,-78
-2.92%	- $24,-46	$0,-3	- $24,-42
-1.92%	- $16,-7	$0,-2	- $16,-5
-0.92%	- $7,-71	$0,-1	- $7,-70
0.08%	$0,67	$0,01	$0,66
1.08%	$9,05	$0,02	$9,03
2.08%	$17,42	$0,03	$17,39

How high will 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 $10 000,00 will decrease in value over time due to inflation.

Inflation	Initial value	Future value after:
		10 years	20 years	30 years
1%	$10 000,00	$9 049,15	$8 188,81	$7 409,51
2%	$10 000,00	$8 188,10	$6 703,96	$5 488,89
3%	$10 000,00	$7 408,27	$5 488,22	$4 065,34
4%	$10 000,00	$6 702,21	$4 491,84	$3 010,21

For more details, you may visit our inflation loss calculator to check how much will be $10 000,00 worth in the future.

How long will $10 000,00 last in retirement?

This depends mostly on two factors: the number 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 the entire amount of $10 000,00 will be invested, and you will receive regular interest. In most cases, in order to keep a 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%	$40,00	44 years 8 months
	$50,00	27 years 5 months
	$60,00	20 years 3 months
	$75,00	14 years 8 months
6%	$40,00	1000 years 1 months
	$50,00	107 years 8 months
	$60,00	29 years 10 months
	$75,00	18 years 3 months
8%	$40,00	1000 years 1 months
	$50,00	1000 years 1 months
	$60,00	1000 years 1 months
	$75,00	27 years 5 months
10%	$40,00	1000 years 1 months
	$50,00	1000 years 1 months
	$60,00	1000 years 1 months
	$75,00	1000 years 1 months

As you see, if you keep your expenses in check, you could retire with $10 000,00 in savings. With the monthly withdrawals of $40,00 you will be more likely to retire than if you keep spending $75,00 a month.

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

How to retire with $10 000,00?

Once you know what criteria should be met in order to be able to retire with $10 000,00, you can 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 $10 000,00 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 $10 000,00 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 $10 000,00?

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 $10 000,00.

How can you retire early at 35 with $10 000,00?

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 $10 000,00 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 $10 000,00.

How can you retire early at 45 with $10 000,00?

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

1. You need to decrease your spending in order not to deplete $10 000,00 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 $10 000,00?

If you are reasonable and can keep your spending in check, $10 000,00 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 scenario 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 by 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 you could potentially 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, you have much more money and wish to check how high your standard of life could be visit our report: Is 1.5 million enough for FatFIRE?