Is $1M enough to retire at 55?


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Who doesn’t want to retire early? If you have $1 million stashed away by age 55, you may feel like you have enough to leave the rat race and ride out your golden years. Unfortunately, it may not be enough.


It all depends on your lifestyle and location. For some professionals, asking if $1 million is enough to retire on may be downright naive. As people live longer and prices continue to rise, many of us can end up needing much more.


If sitting on a cool million at 55 makes you feel like you’re ahead of the game, it’s probably a good idea to slow your roll and take some key factors into consideration.


Related: Average Retirement Savings by State

How Far $1 Million in Retirement Will Realistically Take You

One million dollars sounds like a lot of money: surely enough to last the rest of your life, right? But how far will $1 million really take you in retirement? There’s no single answer that applies to everyone. The nest egg that an individual will need hinges on the following variables:

  • Where you’ll live when you retire
  • The lifestyle you want to lead
  • Whether you have dependents
  • Healthcare costs
  • Other retirement income
  • Investment risk
  • Inflation

Considered another way, the answer comes down to your withdrawal rate — how much money you regularly withdraw from your accounts to live on — and how long you end up living. A conservative withdrawal rate, for example, is 3%. So, if you’re eating up 3% of your savings per year (with inflation on top of that), you’ll want to make sure you have enough to last for a few decades.


This is complicated stuff, and it may be best to consult a financial professional to help you plan it all out. At the very least, run some numbers yourself to figure out, “Am I on track for retirement?

Why You Need to Figure on Needing a Lot More if You Retire Early

Financial experts often say that you’ll need around 80% of your pre-retirement annual income for each year of retirement. That means that if your pre-retirement annual income is $80,000, you should plan on saving around $64,000 per year of retirement.


In that scenario, if you hope to retire at 55, you would need almost $2 million! That amount would last you for around 30 years, until you are 85. As you may have noticed, this is considerably more than $1 million.


Even then, you have to think about what happens if you live until you’re 95, or even 105. That’s 50 years of retirement — and $1 million is probably not going to last half a century. If you’re planning on retiring early, it seems, you will need a lot more than $1 million.

How Much You Should Ideally Save for Retirement

Again, the amount you should ideally save for retirement will depend on the kind of lifestyle you want to have during your retirement years. Because there are so many unknowns and variables to consider, many people simply aim to save as much as they can.


To get to a ballpark figure, though, ask yourself the following questions when crunching the numbers:

  • At what age would you like to retire?
  • What kind of lifestyle do you want to have?
  • Will you work part-time? If so, what kind of work will you do, and what is the average pay for that type of work?
  • Will you have passive income (such as rental income from a real estate property)?
  • What other sources of income will you have (Social Security, etc.)?
  • Where will you live when you retire, and what is the cost of living in that location?
  • How big of a safety net do you want for unforeseen circumstances?

Once you’ve thought about how you want to live your retirement, you can plan for that scenario. Create the budget you would like to have, then calculate the cost per year and the number of years you plan on being retired.


While we don’t know how long we will live, expecting a longer lifespan is a smart way to plan for retirement. You don’t want to outlive your savings and be too old to go back to work.


So, how much you should ideally save for retirement will vary in a big way from person to person. Perhaps the simplest answer is to save as much as you can.

Factors to Consider When Saving for Retirement

In addition to your cost of living after retirement, you should factor in inflation. Adjust your yearly cost of retirement with an inflation calculator to learn the change in value of your saved money over time. For perspective: Inflation, historically, has averaged just over 3%.


Happily, the stock market has grown faster than the inflation rate over time. So, you can do some stock portfolio tracking to see whether your investments may help you stay ahead of inflation.


And another thing: Life expectancy is higher than it used to be. Americans are living, on average, until 80. With that in mind, plan for a longer lifespan. That way you won’t feel as though you’re running out of money later in retirement.

How to Determine the Right Amount to Retire For You

If you want to keep your current cost of living and lifestyle, take your current salary and multiply it by the number of years you are planning on living off your retirement and multiply it by around 80%. Then, adjust it for inflation using an online calculator. Finally, add a cash cushion for unforeseen events.


It’s a bit of math, but this should give you a ballpark idea of your needs. You can always use a retirement calculator, too, of which there are many.

The Takeaway

Long story short: It is possible to retire with $1 million at 55. However, $1 million is not going to be enough for most people. You’ll need to create a customized financial plan based on your lifestyle goals if you want to try, though — there is no magic formula or a one-size-fits-all plan to do it. So, identify what matters to you and then plan your retirement based on your ideal type of retirement.


How much money do I need to retire at 55?

The amount of money you will need to retire at 55 will depend on the kind of lifestyle you want to lead during retirement. If you’re planning on living off of $60,000 per year and are hoping to live for another 30 or so years, you will need almost $2 million.

Can you live on $1 million in retirement?

One million dollars is not going to be enough for most people in the U.S. to retire on. Whether $1 million is enough will largely depend on the kind of lifestyle you want. If you are planning on receiving a pension and/or Social Security, that will significantly help to stretch your savings.

Can I retire with $1 million in my 401(k)?

Depending on your lifestyle, $1 million in your 401(k) may not be enough. When combined with other savings and investments, it can be. But it’s probably best to consult with a financial planner who can help you determine how to best use your 401(k) savings.


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9 attractive & affordable places to retire overseas


Are you an American thinking of retiring abroad? If so, you’ll want to consider this list of countries that you can move to. Each country offers its own unique set of benefits and drawbacks, so it’s essential to do your research before deciding.


Whether you’re looking for a sunny climate, affordable healthcare or a lower cost of living, one of these countries will fit your needs!


We have listed nine countries where you can quickly retire or repatriate as an American. But before that, let’s understand how one can determine the best place to retire.


There are many ways to go about finding the best place to retire. Here are some key factors to consider:

  • Cost of living in the new country
  • Quality of healthcare
  • The climate
  • Availability of amenities
  • Safety of the country
  • Ease of travel
  • Stability of the country’s political situation

Now, let’s take a look at nine countries where Americans can easily retire or repatriate.


Deposit Photos


Portugal is one of three European countries on this list that make up the top 10. It’s a beautiful country with a mild climate, and its coastline offers lovely beaches.


Portugal’s living costs are relatively low, and retirees can enjoy several benefits. For example, Americans can easily communicate with the local community since students learn English in schools.


There are hundreds of islands to visit, and the low cost and broad range of restaurants make it a foodie’s utopia.




Slovenia should be at the top of your list if you’re looking for a beautiful and affordable place to retire.


This small country in Central Europe has a lot to offer retirees, from stunning mountains and lakes to quaint villages and cities. The cost of living in Slovenia is very reasonable, with rent for an apartment in Ljubljana averaging $720 per month.


And while the winters can be cold, the summers are warm and perfect for exploring the outdoors. With its great location, lovely weather and low cost of living, Slovenia is an ideal place to retire.


mihtiander / istockphoto


Retirees often overlook the Czech Republic as a retirement destination, but it has a lot to offer American retirees. However, the cost of living is relatively low, and there are good healthcare and transportation options.


The country is also safe and welcoming to foreigners. Prague, the capital, is a beautiful city with plenty of parks and historical landmarks.


Many small towns and villages offer a more relaxed pace of life. Whether you’re looking for an urban or rural setting, the Czech Republic is an ideal place to retire.


There are plenty of activities to keep you busy, and the people are friendly and welcoming. If you’re looking for a country with a lower cost of living and good amenities, the Czech Republic is worth considering.


nantonov / istockphoto


There are many reasons why Australia could be a great country to retire for Americans. For starters, the cost of living is relatively low compared to the United States.


Rent for a two-bedroom apartment in the city center can be around $1,000 to $2,000, considerably cheaper than most American cities.


In addition, there are plenty of activities and attractions to keep retirees busy, from exploring the Great Barrier Reef to visiting one of the many world-class museums and art galleries.


And with its temperate climate and stunning natural scenery, Australia is a perfect place to enjoy a comfortable retirement.


So, if you’re looking for an affordable and exciting retirement destination, Australia might be a perfect choice.


Deposit Photos


Malaysia is another country on our list that is making an effort to be more welcoming to ex-pats. You can apply for a Malaysian My Second Home (MM2H) visa that will last up to 10 years.


This visa offers several benefits, including discounts on travel and healthcare. The cost of living in Malaysia is relatively low, and the climate is warm year-round.


Don’t worry about cultural shock. In Malaysia, English is considered the “unofficial second language.”


Plus, it ranks 23rd on the Global Peace Index, which places the country far superior in terms of peace compared to other countries in Southeast Asia.




With its rich history and culture, not to mention a diverse landscape, Spain is unsurprisingly one of Americans’ most popular retirement destinations.


The cost of living will vary depending on which city you choose to live in. However, in general, the cost of living in Spain is relatively low compared to other Western European countries.


Additionally, Spain has a public healthcare system available to all residents, including retirees. The climate is also mild, with warm summers and cool winters.


Gatsi / istockphoto


Costa Rica is a renowned destination for retirees, thanks to its stunning scenery, fantastic beaches and low cost of living.


The country also has high-quality healthcare and a stable political situation. It is relatively easy to travel to Costa Rica from the United States, making it an excellent option for those who want to be close to home.


If you’re looking to buy, you may find houses for a fraction of the price in the United States if you live in areas with lower property taxes.




Panama is a country with stunning mountains and lovely beaches, making it a fantastic choice for retirement. The cost of living is relatively low in Panama, and retirees can enjoy several benefits, including discounts on travel, healthcare, and entertainment.


The country also has a stable political situation and is relatively safe. However, it is essential to note that the quality of healthcare in Panama is not as high as in some other countries on this list.


The only drawback is that you must have a pension paying at least $1,000 per month to be eligible for the Pensioner visa.


However, you will save 25% on electricity bills, airline tickets, restaurant meals, 10% on medicine and even 50% off theater admissions once a retired resident.


Simon Dannhauer / iStock


Peru is an excellent retirement destination for anyone looking for an exotic locale that doesn’t come with a high price tag.


Apartment rentals in the district of Lima, for example, go for around $740 a month. That’s quite a bargain, especially when you compare it to prices in the United States.


And it’s not just the cost of living that’s enticing: Peru also offers a wide range of activities and attractions. There’s something for everyone in this South American country, from the ancient Inca ruins at Machu Picchu to the wildlife-filled Amazon rainforest.


Peru is an ideal place to spend your retirement years with its rich history and culture.


DanielPrudek/ istockphoto


If you’re a retiree or thinking about retiring, one of the best decisions for your future may be deciding where to live. Many factors go into this decision, and it’s essential to consider what country is most suited for your needs before making a final choice.


If you want warm weather year-round with a low cost of living, think about moving to countries like Peru. For example, Australia might suit your needs better for those looking for an exotic location with plenty of activities.


And if safety and affordability are paramount in your search for a retirement destination, Slovenia should be on the list!


Wherever you choose to call home during these golden years, we hope this article has helped guide you towards finding the perfect place.


This article was produced and syndicated by





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