Can I Retire at 50 With $1 Million?

Early retirement can offer unparalleled freedom, but successfully funding several decades without additional income requires careful financial planning. For example, retiring at age 50 with $1 million in savings is an ambitious goal, but is it realistic? A $1 million nest egg might seem like a secure sum, but it can diminish quickly depending on your lifestyle, inflation rates, healthcare expenses and longevity. While retiring early is achievable, it requires you to make strategic financial decisions and ongoing adjustments as conditions change.

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.

A financial advisor can help you assess your lifestyle preferences, expected lifespan and comfort with financial risk.

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.

One crucial consideration in retiring at 50 is the gap before Social Security and Medicare eligibility kicks in. Social Security benefits can be claimed as early as 62, but full Medicare eligibility doesn’t start until 65. Until then, you’re fully responsible for healthcare insurance, which can be costly.

Your Social Security benefit amount depends on multiple factors, including your career earnings and the age at which you claim benefits. For instance, if you were born in 1985, earned about $60,000 annually, and decided to claim benefits at the earliest possible age (62), you’d receive approximately $30,574 per year, assuming average inflation rates.

If you could delay your claim until age 65, your annual benefits would increase to approximately $37,984. This is why deciding when you plan to draw Social Security can significantly impact your retirement lifestyle.

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 is achievable, but it demands meticulous planning, realistic budgeting and disciplined management. Factors such as lifestyle, location, inflation, healthcare and longevity significantly influence the sustainability of your retirement savings. A carefully structured portfolio, possibly incorporating stable income sources like annuities, can greatly enhance your financial security. Although early retirement can offer incredible benefits, thoughtfully delaying retirement by even five to 10 additional years can dramatically strengthen your financial stability and future comfort.

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. SmartAsset’s free tool matches you with 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.
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