Can I Retire Comfortably With $1.5 Million at 45?

It is possible to retire comfortably at 45 if you have $1.5 million. However, it’s not guaranteed to work. And whether it will for you depends on a number of variables, only some of which you can control. Having to wait 17 years for Social Security benefits and 20 years for Medicare coverage are important factors to consider when you retire this early. Your lifestyle, location, health and lifespan also will have a considerable impact on this plan’s viability.

A financial advisor can help you decide when you can comfortably retire.

Is $1.5 Million Enough to Retire at 45?

Whether $1.5 million is enough to retire at 45 depends on how much you plan to spend each year, and how disciplined you are about maintaining that budget for decades. The traditional 4% rule suggests withdrawing 4% of your portfolio in the first year of retirement, adjusting for inflation thereafter. In this case, you’d start with an annual income of about $60,000.

If you’re aiming for a more conservative plan to ensure your portfolio lasts 40-plus years, withdrawing only 3% annually would provide $45,000 per year. On the other hand, taking a 6% withdrawal rate could give you $90,000 annually. However, you’d also have a higher risk of outliving your savings.

The success of your plan will largely hinge on factors like investment returns, your healthcare costs and whether you’re willing to make lifestyle adjustments along the way.

Other Factors Affecting Retirement at 45 With $1.5 Million

Many variables can impact whether retiring at 45 with $1.5 million will be sustainable. Here’s what to consider.

Retirement Portfolio Basics and Taxes

Accessing retirement funds before 59.5 can be tricky. If you rely heavily on traditional IRAs or 401(k)s, early withdrawals could trigger a 10% penalty plus income taxes. Strategies like a Roth IRA conversion ladder or using taxable brokerage accounts can help bridge the gap penalty-free.

You’ll also want to consider capital gains taxes. For instance, if you withdraw $50,000 annually and $20,000 represents gains taxed at the long-term capital gains rate (typically 15% for middle-income retirees), you could owe around $3,000 in taxes each year. That’s a meaningful amount that must be factored into your budget.

Location and Lifestyle

Where you choose to retire matters. Moving to a low-cost state or country can stretch your $1.5 million far further than staying in a major metro area with high housing, healthcare and tax costs.

States like Florida, Tennessee and Texas offer lower living costs and no state income tax, making them attractive destinations for early retirees.

You can use our free cost of living calculator to compare different locations.

Inflation

Over a 40- to 50-year retirement, inflation can significantly erode purchasing power. Even modest inflation of 2–3% per year can double the cost of goods and services over your retirement. Keeping a portion of your portfolio invested in assets that historically outpace inflation, like equities, is critical.

Health and Longevity

Without employer-sponsored coverage or Medicare, healthcare will be one of your largest expenses until age 65. Premiums for private insurance, coupled with out-of-pocket costs, could easily run $10,000 or more per year (according to estimates from SmartFinancial). Plus, living into your 80s or 90s is increasingly common, making it essential that your financial plan anticipates a very long retirement horizon.

Retiring at 45 With $1.5 Million – Social Security and Medicare

A woman calculates if she can retire with $1.5 million at 45.

When you retire at 45, you face a substantial wait before accessing government benefits. The earliest you can claim Social Security is age 62, but early claiming results in permanently reduced benefits. Waiting until full retirement age (67) or even 70 increases your benefit significantly.

Here’s how it breaks down according to 2025 data from the Social Security Administration:

Age 62 (Early Retirement): Maximum monthly benefit of $2,831
Full Retirement Age: Maximum monthly benefit of $4,018
Age 70 (Delayed Retirement): Maximum monthly benefit of $5,108

Medicare eligibility, meanwhile, begins at 65. Until then, you’ll need to purchase private insurance or obtain coverage through a health insurance marketplace plan, which can be expensive and subject to annual increases. Planning how to bridge these gaps is essential for early retirees to maintain financial security.

Create a Retirement Budget

Here’s a sample annual retirement budget for a 45-year-old with a $1.5 million portfolio using a 4% withdrawal strategy ($60,000/year):

Housing (Rent/Mortgage, Property Taxes, Insurance): $18,000 (which provides some cushion above the $16,800 average according to LendingTree)
Utilities and Household Expenses: $4,800
Groceries and Dining Out: $8,400
Healthcare Premiums and Out-of-Pocket Costs: $10,000
Transportation (Car, Gas, Insurance): $5,000
Travel and Entertainment: $7,500
Miscellaneous (Clothing, Gifts, Emergency Fund): $6,300

Total Annual Expenses: $60,000

Your individual needs could differ dramatically based on your lifestyle choices and where you choose to live, so building a personalized budget is critical.

Managing a $1.5 Million Portfolio at 45

At 45, your retirement portfolio still needs meaningful growth to combat inflation and fund a long retirement. A common strategy might involve 60% equities for growth potential, 30% bonds for stability and income, and 10% cash or liquid reserves for flexibility.

You’ll also want to stay tax-efficient. This means focusing on long-term investments, using tax-loss harvesting and being strategic about asset placement. This involves keeping tax-efficient investments in taxable accounts and more heavily taxed assets in tax-advantaged accounts.

Annuities

Adding an annuity could help guarantee a portion of your retirement income. For example, purchasing a deferred income annuity could provide guaranteed payments starting at age 65, helping to supplement Social Security and reduce longevity risk. However, it’s important to weigh annuity fees, payout structures and inflation protection options before committing.

Bottom Line

A group discuss whether someone can retire comfortably with $1.5 million at 45.

Retiring at 45 with $1.5 million is an exciting goal, but it comes with complexities and risks that demand careful planning. Your financial success depends heavily on factors like where you live, how much you spend, how your portfolio performs and how you prepare for healthcare and taxes. With smart budgeting, thoughtful asset management and ongoing flexibility, early retirement can be a rewarding and sustainable reality.

Tips to Help You Save for Retirement

A financial advisor can help you build a long-term strategy for reaching retirement. 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. And 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.
Social Security benefits alone won’t be able to support your current lifestyle. However, they can certainly help with your living expenses in retirement. Try our Social Security calculator to see how much of a benefit you can expect.
While you’re at it, check out our retirement calculator to see if your savings are on pace; and try our cost of living calculator to get a better idea of your income needs.