A million dollars sounds like a lot of money, but can you retire on $1 million in 2026? It might be hard given current inflation and rising healthcare costs, but having six figures in the bank goes a long way toward living comfortably during your golden years.
How far that money will go depends on a variety of factors, including your longevity and lifestyle choices. Fortunately, you don’t have to rely solely on your savings when you retire. Most retirees have multiple streams of income.
“It’s all about having an income plan rather than an asset plan,” says Michael Foguth, president and founder of Foguth Financial Group in Brighton, Michigan. Those who can tap pensions, Social Security and annuities may find that they are able to cover expenses with these sources of income, and savings are just the icing on the cake.
How long will $1 million last in retirement? Keep reading to learn what goes into determining the answer.
[Read: What Is the Average Retirement Savings Balance by Age?]
Is $1 Million Enough to Retire? Consider These Factors
How long $1 million will last in retirement depends on the following factors:
— Geography
— Longevity
— Lifestyle
— Healthcare
— Long-term care
— Retirement income
— Asset mix
— Investment risk
— Inflation
Geography. The cost of living differs dramatically throughout the country, and your location could determine whether you can successfully retire with $1 million. U.S. News pinpointed the most affordable places to live in the U.S., where your dollars stretch further to cover housing and other living expenses.
Longevity. While no one knows exactly how long they will live, people can make an educated guess based on their health and family history. Those who might live well into their 80s, 90s and beyond may find $1 million isn’t enough.
Lifestyle. Retirees need to make smart spending choices, and those who choose an expensive lifestyle will need more cash in their nest egg. “How much you spend is a huge factor,” says Tyler Ozanne, a certified financial planner and president of Ozanne Financial Services in Dallas. While retirees may not have much say in some factors listed here, discretionary spending is something completely within their control.
Healthcare. The 2025 Fidelity Retiree Health Care Cost Estimate found that an average 65-year-old retiring last year could need $172,500 in after-tax savings to pay for healthcare costs in retirement. “The hope is that Medicare will be there and be sufficient for people,” says Barbara Taibi, a retired tax partner who now serves as an independent consultant to Eisner Advisory Group in Iselin, New Jersey. However, the reality is that Medicare still involves out-of-pocket costs that can add up. Healthy seniors may have lower expenses, helping their retirement savings last longer.
Long-term care. The Fidelity estimate doesn’t include long-term care, which could cost more than $129,575 a year for a private nursing home room, according to 2025 data from the CareScout Cost of Care Survey. Medicare won’t pay for long-term care, and a couple without long-term care insurance may find that a nursing home stay leaves a surviving spouse with few assets to pay for the remainder of their retirement.
Retirement income. Most people won’t be living exclusively off their savings in retirement. Those with average spending — which was roughly $61,432 for those age 65 and older in 2024, according to government data — may not need much in savings to supplement Social Security and pension income, according to Ozanne. Even those who don’t receive a pension may be able to replicate those payments by purchasing an annuity.
Asset mix. How you have that $1 million saved could also impact how long it lasts. “You can’t have $1 million in cash and expect that to get you (through retirement),” Taibi says. Ideally, it will be invested in a way that keeps up with inflation. Likewise, she says having $1 million invested is different than having $800,000 in home equity and $200,000 in a portfolio. Money kept in real estate is not liquid, and there are costs associated with real property that can offset its value.
Investment risk. Retirees also need to take a close look at their portfolio if they want to know how long $1 million will last in retirement. “It’s all about how you have it invested,” Foguth says. Investing aggressively puts money at risk for losses, but being too conservative can mean savings don’t grow enough to offset inflation and withdrawals.
Inflation. After years of near-zero inflation, prices for many products have skyrocketed. That’s something retirees need to take into account as they manage their money. A rising inflation rate will erode the purchasing power of money and result in retirees burning through their savings faster.
These factors don’t exist in a vacuum. Many are intertwined. If you live somewhere with good access to healthcare, that could increase your longevity. Living longer, in turn, may mean you are more likely to need long-term care at some point. Life expectancy is longest in Hawaii, at 80 years, and shortest in West Virginia. Residents there have a life expectancy of 72.2 years, according to 2022 government data.
All these factors make it difficult to create a universal rule of thumb for retirement savings. While some people may be able to live comfortably in retirement on less than $1 million, others will need significantly more.
[Read: If You Want to Retire in 2026, Here’s What You Need to Prep Now]
Impact of Inflation on Retirement Savings
Of all the factors above, inflation may be foremost on many people’s minds today. Prices in 2022 increased at a rate not seen in 40 years, and while the inflation rate has subsided since then, it remains elevated. In May 2026, the consumer price index, a common measure of inflation, was up 4.2% from the year before. Rising cost of living means retirement savings don’t go as far as they would otherwise.
“Retirees may need to withdraw more of their retirement accounts just to pay living expenses,” Taibi says. “And those planning to retire in the next few years may need more to live on, and therefore have less excess to put away for retirement.”
For younger workers, the news is better. Over the course of a career, high-inflation years like 2022 are balanced by low-inflation years such as 2015, when average annual inflation was near zero.
“The average inflation rate over a long period of time is 3% to 3.5%,” Ozanne says. As long as workers have calculated that level of inflation into their savings goal, they should be well-positioned for retirement.
However, rising healthcare costs compound inflation concerns for retirees. Medicare Part B premiums increased nearly 10% in 2026, a rate that far outpaced the 2.8% cost-of-living adjustment granted to Social Security beneficiaries. Workers should discuss with a financial planner how to best prepare for medical expenses in retirement.
[Read: Great Retirement Planning Tools and Software.]
How to Determine the Right Amount for Your Retirement
Rather than rely on a rule of thumb to determine how much to save for retirement, financial planners advocate for a more nuanced approach. “I think you have to have a more personalized number,” Taibi says.
That means taking the following steps to determine how much to save for retirement:
— Estimate guaranteed retirement income from sources such as Social Security and pensions.
— Calculate expected expenses based on debt and lifestyle choices.
— Determine any shortfall that will need to be covered by retirement savings.
Retirees should include smaller items such as gifts, vacations and home purchases in their calculations. Those items can quickly add up, and all spending needs to be considered to calculate an accurate retirement savings goal.
How much people plan to withdraw from retirement funds each year should also factor into setting retirement savings goals. One common rule of thumb is to withdraw 4% from retirement funds during the first year of retirement and then adjust that amount for inflation in subsequent years.
Four percent of $1 million provides $40,000 annually for retirement spending. That translates to about $3,333 per month. When you add in the average Social Security benefit amount of $2,071, that provides you with more than $5,400 per month before any taxes or expenses. If you can’t imagine living off that amount — $64,848 per year — it’s time to reconsider your savings goal.
“In a year with high inflation and a lower stock market, retirees and close-to-retirement individuals may need to make some tough choices: Work a little longer, go back to work, spend a little less and put off some big-ticket items,” Taibi says.
If all this feels overwhelming and confusing, find a financial advisor who specializes in retirement planning. These professionals have both the experience and software to make calculations on behalf of clients.
How to Make $1 Million Go Further
Once you retire, saving more money may no longer be possible. If you are worried $1 million won’t last your entire retirement, consider the following steps to stretch your money further.
— Relocate or downsize: Housing accounts for the largest percentage of most budgets. You can save money and make your savings last longer by moving to an area with a lower cost of living or downsizing to a smaller house. Some retirees even choose to move overseas to countries where they can comfortably live on $1,000 per month.
— Delay Social Security: It may seem counterintuitive to wait to collect Social Security if you are worried your retirement savings will run out. However, relying on your savings for a few years and starting Social Security at age 70 will maximize your monthly government benefit. Couples may also want to consider having one spouse claim benefits while the other waits. Talk to a financial professional to determine which claiming strategy is right for you.
— Work part time: Many retirees enjoy the structure and social aspect of work, and continuing a job part time can be a good way to supplement savings. Be aware, though, that there is an earnings cap for early retirees who begin Social Security benefits prior to their full retirement age,
How to Save $1 Million for Retirement
While $1 million may seem like a lot of money, compounding gains from investments mean this number is within reach even for those with relatively modest incomes.
“For young people, it’s quite easy. Just do it,” Foguth advises.
Young workers with relatively few expenses should make retirement savings a priority before major life events such as marriage, children or homeownership chip away at their extra cash. Some employees may also have the option of a professionally managed 401(k) account. Although there are no guarantees, a properly managed account could result in better returns balanced with an appropriate level of investment risk.
A 20-year-old would need to save approximately $300 a month to save more than $1 million by age 65. That assumes a 7% annualized return on the investment. While that may seem like a lot, workers with a 401(k) may receive automatic contributions to their retirement plan from their employer. Many companies also match employee contributions. Both can quickly add to retirement savings. What’s more, $300 per month is significantly better than the $1,350 per month that a 40-year-old with no previous savings would need to save to retire with roughly the same amount.
But even compounding has its limits. “It’s probably not as doable if they have waited until their 50s to start saving,” Ozanne says. “My advice for someone who hasn’t started earlier is to temper your expectations.”
Other strategies to boost savings include minimizing taxes, cutting expenses and looking for low-fee investment options. However you reach your goal, with careful planning and expert guidance, you may be able to stretch your $1 million or more across a decades-long retirement.
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Can You Retire on $1 Million? Here’s How Far It Will Go originally appeared on usnews.com
Update 07/06/26: This story was published at an earlier date and has been updated with new information.
