Can I Retire at 50 With $1 Million?

Retiring at 50 with $1 million might sound like financial freedom, but can that nest egg really carry you for the next 40 years? Walking away from work that early means your savings must stretch long before Social Security and Medicare step in. Healthcare costs, reduced benefits and a longer retirement horizon can quickly change the math. Before you hand in your resignation, it’s crucial to understand how early retirement affects your income plan.

Because of these complexities, working with a qualified financial advisor can help you to ensure your early retirement plan remains sustainable.

Is $1 Million Enough to Retire at 50?

A common rule for estimating sustainable retirement withdrawals is the 4% rule. Following this principle, your $1 million would generate approximately $40,000 in your first year of retirement. You’d then adjust how much you withdraw annually for inflation. In following the 4% rule, your retirement portfolio should last about 30 years.

An annual amount around $40,000 might be able to provide a modest lifestyle in retirement, depending on where you live, but it also assumes average investment returns and moderate inflation.

However, if you’re comfortable taking on more risk, or have additional income streams, raising the withdrawal rate to 6% could offer an annual income of about $60,000. While this sounds appealing, it significantly shortens how long your savings could last, potentially leaving you vulnerable later in retirement if investments underperform or if inflation rises.

On the conservative side, a 3% withdrawal rate provides $30,000 in the first year, and slightly more each year after. This figure may seem low, but it greatly increases the odds that your funds last beyond 30 years. This can offer you peace of mind, especially if your family has a history of longevity.

Other Factors Affecting Retirement at 50 With $1 Million

Beyond withdrawal rates, several factors can impact your ability to retire at age 50 with $1 million. Considering these aspects, whether they affect your current circumstances or will play a role in your retirement, can help you create a plan that suits your personal financial situation and needs.

Retirement Portfolio Basics and Taxes

Retiring at 50 with $1 million means you’ll likely rely on a combination of account types, each with distinct tax implications. Because traditional retirement accounts like 401(k)s and IRAs are not accessible without penalty until age 59.5, early retirees typically lean on taxable brokerage accounts, savings accounts and possibly Roth accounts.

Withdrawals from taxable brokerage accounts are generally subject to capital gains taxes. If you’ve held your investments for more than one year, you’ll benefit from long-term capital gains tax rates, which are lower than ordinary income tax rates. For instance, if your taxable income is under $96,700 (for a married couple filing jointly), your long-term capital gains tax rate is 0%. If you earn between $96,700 and $600,050, the rate is 15%. Above that, you’ll pay 20%.

Suppose you withdraw $40,000 from your brokerage account, of which $30,000 is capital gains. If you’re in the 15% capital gains bracket, you’d owe $4,500 in taxes on that gain. Tax planning strategies like harvesting losses to offset gains, spreading withdrawals over time or using Roth contributions can help reduce your tax burden.

Location and Lifestyle

Where and how you choose to live are critical components of any retirement plan. Retiring early in a high-cost metropolitan area like New York, Los Angeles or Boston could quickly drain your savings. Conversely, relocating to an area with a lower cost of living — like a smaller city in the Midwest or a retiree-friendly state such as Florida or Arizona — can substantially extend your savings.

Similarly, your spending habits and lifestyle will play a significant role. Frequent travel, hobbies or supporting family members financially can drastically change your retirement calculations, requiring additional planning and savings.

Inflation

Inflation quietly erodes purchasing power over time and can severely impact retirement plans, particularly extended retirements beginning at age 50. For example, $40,000 in January 2000 had equivalent buying power to roughly $74,820 in April 2025, underscoring the long-term impact of inflation.

Even recent inflation can drastically affect spending power. For example, $40,000 in January 2020 had the same buying power as $49,781 by April 2025.

Diversifying income streams and investments can help mitigate the risks posed by inflation, providing protection if one source of income diminishes due to inflationary pressures.

Health and Longevity

Early retirees will also need to account for potentially decades of healthcare expenses. Without employer-sponsored insurance or Medicare (which begins at age 65), private insurance premiums and out-of-pocket healthcare costs can significantly affect your budget.

Longevity should also factor into your planning. People routinely live into their 80s and 90s, which could mean funding a retirement lasting 30 to 40 years, or even more. Ensuring your savings account for prolonged healthcare and general living costs can help you avoid outliving your resources.

Retiring at 50 With $1 Million – Social Security and Medicare

A couple enjoying their retirement at 50 with $1 million.

Retiring at 50 with $1 million may sound achievable, but it requires careful coordination of income, healthcare and long-term planning. Two of the biggest factors to consider are Social Security and Medicare, since both play a major role in traditional retirement timelines. Leaving the workforce 15 to 20 years early changes how and when you can rely on these benefits.

If you retire at 50, you generally won’t be eligible to claim Social Security retirement benefits until at least age 62. That means your $1 million portfolio may need to fully cover your expenses for 12 years or more. Even once benefits begin, claiming early reduces your monthly payment permanently compared to waiting until full retirement age or 70.

Social Security benefits are calculated based on your highest 35 years of earnings. Retiring at 50 may result in lower lifetime earnings on record, which could reduce your benefit amount. If you have fewer than 35 years of earnings, zeros are factored into the calculation, further lowering your benefit.

Medicare generally begins at age 65, leaving a 15-year gap if you retire at 50. During that time, you’ll need to purchase private health insurance, which can be expensive. Premiums, deductibles and out-of-pocket costs can significantly increase your annual spending needs.

Healthcare expenses often rise as you age, even after Medicare begins. Supplemental insurance, prescription drug coverage and potential long-term care costs should be built into your retirement plan. These costs can strain a $1 million portfolio over several decades.

Sample Retirement Budget

Here’s what a realistic annual retirement budget might look like for a 50-year-old living on a $1 million portfolio, assuming a 4% withdrawal rate and living in a low cost of living area:

Housing (Mortgage/Rent, Taxes, Maintenance): $16,800 (about $1,400 a month, according to LendingTree)
Utilities and Household Expenses: $3,000
Groceries and Dining: $6,000
Healthcare Premiums and Out-of-Pocket Costs: $6,000
Transportation (Car, Gas, Insurance): $3,000
Leisure and Travel: $4,000
Miscellaneous and Emergency Fund: $6,000

Total Estimated Annual Expenses: $44,800

If you anticipate higher medical costs, support dependents or maintain an expensive lifestyle, you may need to adjust your withdrawals, or explore additional income sources.

How to Manage a $1 Million Portfolio When Retiring at 50

Retiring at 50 with $1 million means you’ll need to be strategic with your asset allocation. Balancing growth potential and risk becomes vital, as your portfolio must generate income and keep pace with inflation while providing stability.

Typically, someone retiring at 50 might consider a balanced portfolio of roughly 50% equities for growth, 40% bonds for stability and income, and 10% in cash or equivalents for liquidity and emergency expenses. Investing in dividend-paying stocks, real estate investment trusts (REITs) or bond funds can create reliable income streams without forcing you to liquidate your principal prematurely.

Consistently reviewing your asset allocation, rebalancing when necessary and adjusting your strategy based on market conditions or personal circumstances will help sustain your portfolio’s longevity.

Annuities

Annuities can provide a dependable income stream, and are especially attractive for early retirees seeking stable payments. A fixed or indexed annuity guarantees income, potentially for life, thereby offering protection against market volatility and longevity risk.

However, annuities often come with fees, restrictions and reduced flexibility. Purchasing annuities at 50 may also involve lower payouts due to longer expected lifespans. Consulting a financial advisor can help evaluate whether annuities align well with your specific retirement objectives.

Bottom Line

A couple discuss if they can retire at 50 with $1 million.

Retiring at 50 with $1 million requires more than hitting a savings target, it demands careful planning around Social Security timing and healthcare coverage. Because benefits won’t begin for years, your portfolio must carry the full weight of living expenses and insurance costs in the meantime. Lower lifetime earnings and early benefit claims can also reduce future Social Security income.

Tips for Retiring Early

Retiring at 50 necessitates multiple income streams, which can complicate your taxes. If you’re lost, you can get help from a financial advisor. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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