Can I Retire at 50 With $1.5 Million?

Early retirement offers the freedom to pursue your passions for decades, but it also requires careful preparation to cover living expenses, healthcare costs and inflation — all while ensuring your savings last. Take, for example, the goal of retiring at 50 with $1.5 million. This may seem ambitious, but it’s attainable with disciplined financial management, strategic planning and realistic expectations.

To help determine if this amount aligns with your retirement goals, consider working with a financial advisor.

Is $1.5 Million Enough to Retire at 50?

When considering retiring at age 50 with $1.5 million, you’ll want to consider how much annual income your portfolio can sustainably produce. Financial planners typically recommend starting with the 4% rule. This is where you withdraw 4% from your savings in the first year, then adjust that amount for inflation each year. At this rate, $1.5 million translates to an initial income of about $60,000 in the first year.

However, depending on your lifestyle and financial comfort, you might need to make some adjustments. For a more conservative approach, withdrawing just 3% annually would yield a base income of $45,000 per year, greatly reducing the risk of outliving your money. Conversely, if you’re comfortable with more investment risk and optimistic market returns, a 6% withdrawal, generating around $90,000, is possible, though riskier.

The best approach involves clearly defining your spending habits, anticipated living expenses and financial goals. Creating a detailed retirement budget can help clarify how much income you’ll require and determine if $1.5 million can realistically sustain your lifestyle through potentially 40 or more years of retirement.

Other Factors Affecting Retirement at 50 With $1.5 Million

Before finalizing your plans to retire, you might want to evaluate several factors beyond just the size of your retirement nest egg. Each of these aspects plays a crucial role in how comfortably and securely you can retire.

Retirement Portfolio Basics

Retiring at 50 presents unique challenges when it comes to accessing your retirement accounts. Traditional retirement vehicles like IRAs and 401(k)s have age-related restrictions, typically not accessible without penalties until age 59.5. So early retirees often rely more heavily on taxable brokerage accounts, savings accounts and real estate investments, all of which allow immediate access without penalty.

This also means taxes can have a significant impact on how long your $1.5 million retirement portfolio lasts. Withdrawals from these brokerage accounts are typically subject to capital gains taxes, rather than the ordinary income tax rates applied to traditional retirement account distributions.

Capital gains taxes apply when you sell investments that have appreciated in value. For most taxpayers, the long-term capital gains tax rate ranges from 0% to 20%, depending on taxable income. For a retiree generating around $60,000 annually from a $1.5 million portfolio, the long-term capital gains rate is usually 15%.

For example, if you sell investments resulting in $60,000 of long-term capital gains in one year, you could owe roughly $9,000 (15% of $60,000) in taxes.

If you plan to retire at 50, it’ll be important to manage your income level, utilize tax-loss harvesting, plan for taxes and carefully time your asset sales.

Location and Lifestyle

Where you choose to retire dramatically impacts your financial picture. States like Mississippi or Georgia can stretch your retirement dollars significantly further thanks to affordable housing and favorable tax environments. For instance, Mississippi retirees enjoy approximately $1.16 worth of purchasing power per dollar spent (according to USA Today). Conversely, high-cost states like California or New York can rapidly diminish your savings, offering less than a dollar’s value per dollar spent.

Additionally, taxes vary significantly between states, affecting your overall retirement expenses. Choosing a tax-friendly state or location not only enhances your purchasing power, but also decreases the tax bite on your retirement income, stretching your $1.5 million even further.

Inflation

Even modest annual inflation significantly erodes purchasing power over the long term. An inflation rate of just 3% annually reduces your money’s value by nearly half within 25 years. Retiring at 50 means potentially facing decades of inflation, requiring strategic investment in growth-oriented assets to ensure your portfolio maintains purchasing power over the long run.

Health and Longevity

Healthcare is often a retiree’s largest expense, especially for early retirees who won’t be eligible for Medicare until age 65. Fidelity estimates the average couple retiring at 65 spends roughly $330,000 on healthcare throughout retirement. Retiring at age 50 means adding another 15 years of private health insurance and medical costs, significantly increasing this figure.

Financial experts recommend allocating around 15% of your retirement budget toward healthcare expenses, especially when retiring early. This helps ensure healthcare costs won’t derail your overall financial stability in later years.

Retiring at 50 With $1.5 Million – Social Security and Medicare

Social Security and Medicare typically provide significant retirement income and healthcare support, but early retirees at age 50 face some unique challenges in that regard.

You can’t claim Social Security benefits until at least age 62, and Medicare eligibility begins at age 65. This means you’ll need to independently fund at least 12-15 years of healthcare coverage and daily living expenses from your $1.5 million nest egg.

When you claim Social Security also matters. For example, according to the Social Security Administration, in 2025, the maximum Social Security benefit is $4,018 if you claim benefits at the full retirement age of 65. Meanwhile, claiming early at 62 would reduce that amount to $2,831, while delaying until age 70 could increase it to $5,108. And as these numbers are based on 2025, they’ll likely be higher when you do finally decide to retire. Just something to keep in mind.

Planning for this gap period requires meticulous budgeting and savings discipline. Private health insurance plans can be costly, particularly as you age, meaning your retirement plan must clearly address how you’ll fund health coverage until Medicare becomes available.

Working with a financial advisor can help you create a plan for these challenges.

Create a Retirement Budget

Here’s a realistic example of an annual retirement budget for a typical 50-year-old retiree living on a $1.5 million portfolio, based on a 4% withdrawal ($60,000 per year):

• Housing (Mortgage/Rent/Taxes): $18,000 $16,800 ($1,400 a month, according to LendingTree)
• Utilities and Household Expenses: $4,800
• Groceries and Dining Out: $8,400
• Healthcare Insurance and Out-of-Pocket Costs: $9,000
• Transportation (Car, Gas, Insurance): $4,000
• Travel and Leisure: $7,000
• Miscellaneous and Emergency Fund: $8,800

Total Annual Expenses: $68,800

Adjustments may be needed depending on personal lifestyle preferences, healthcare needs and location costs.

Managing a $1.5 Million Portfolio at 50

Effectively managing your $1.5 million portfolio at age 50 means balancing growth with income generation. A typical approach involves diversifying across equities for long-term growth potential, bonds and fixed-income securities for stability and predictable income, and possibly real estate or other income-producing assets.

For instance, if your portfolio yields a steady 5% annual return, you’ll generate approximately $75,000 in annual income without touching your principal. However, market volatility can cause fluctuations, highlighting the importance of diversification. Investing in dividend-paying stocks, bond ladders, ETFs or rental properties can provide reliable income streams, further protecting your principal from excessive withdrawals.

Annuities

Annuities might also play a strategic role in your retirement income plan. They can provide guaranteed lifetime income, protecting you against market volatility and longevity risk. Purchasing an immediate annuity or a deferred annuity to start payments at a later age can provide financial stability, ensuring consistent cash flow regardless of market conditions.

However, annuities often include fees, surrender charges and lower returns compared to traditional investments. So consider the role it could play in your overall retirement strategy before making a decision.

Bottom Line

Retiring at age 50 with $1.5 million is ambitious, but achievable, with detailed planning, disciplined budgeting and smart portfolio management. Your success depends significantly on your expected lifestyle, healthcare expenses, location and investment strategies. While $1.5 million offers substantial financial flexibility, early retirement presents unique risks and responsibilities, particularly with managing income before Social Security and Medicare become available.

Retirement Planning Tips

• Investing $1.5 million for retirement means diversifying with low-fee assets with high returns during your career. Your shortened timeline means you don’t have a margin for error while working. Thankfully, a financial advisor can help you create a robust retirement plan founded on solid investments. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area. You can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• Although retiring at 50 means enjoying many years of good health, it’s possible you’ll enter a living facility in the future. Your retirement plan can account for this change once you understand the cost of independent living for seniors.