Can You Retire Comfortably on $1 Million in Savings?

By Selena Maranjian – Feb 28, 2026 at 5:02AM ESTKey PointsA big portion of your million dollars invested in dividend payers can generate significant income.Don't forget Social Security -- it might deliver $25,000 or more annually.Much will depend on your expenses, though.Many of us are saving and investing for retirement, aiming to retire with a million dollars. But is that the right goal? Can you retire comfortably on $1 million in savings? There's no right answer to this, as each of us is in different circumstances. Still, here's a look at the question. Image source: Getty Images. What does a million dollars get you? First, let's assume that you'll be receiving Social Security benefits. The average monthly benefit for retirees was just $2,075 as of January, which is nearly $25,000 annually. If you earned more than average, you can expect higher-than-average benefits -- and vice versa. If you apply the flawed-but-still-instructive 4% rule, you might withdraw 4% of your nest egg in your first year of retirement and then adjust subsequent annual withdrawals for inflation. (There are other retirement withdrawal strategies to consider, as well.) The 4% rule would get you 4% of $1 million, or $40,000, as your first-year withdrawal. Add that to perhaps, say, $30,000 from Social Security, and you're up to $70,000 in annual income. Meanwhile, let's say that half of the portfolio, $500,000, is in great dividend-paying stocks. If so, you'll be collecting income from that, too. If your overall average dividend yield is, say, 3%, that's $15,000 in annual income. Plus, healthy and growing dividend payers tend to increase their payouts, often annually. So $15,000 could become $19,000 by year five and maybe $24,000 by year 10. (I applied a 5% annual growth rate there.) If you have enough money in dividend-paying stocks, you might not need to be selling many shares, which can help your nest egg last longer. For diversification, you might have a portion of your portfolio in interest-bearing investments, which would deliver even more income. Alternatively, you might spend some of your money on a fixed annuity, which would deliver fairly reliable income, too. Considerations to take into account So it's clear that you could have substantial income if you retire with a million dollars. But whether it's enough depends on lots of factors, such as: Where you live and the cost of living there Your spending habits Your health and the cost of your healthcare Whether you're carrying any debt, such as a mortgage Your taxes and other fixed expenses What can you do if you're behind? So -- what can you do, especially if you're behind in your retirement savings? Here are some ideas: Save more aggressively and invest more effectively -- such as in an S&P 500 index fund. Consider working a few more years, if you can, to build up your nest egg more. This also lets it have to support you for fewer years. Consider delaying claiming Social Security until age 70, if you can. For most people, 70 is the best age at which to claim your benefits to maximize them. Perhaps take on a part-time job for your first few years of retirement. You might downsize, moving to a smaller home and perhaps shedding one of your household's cars. You might even relocate to a region with a lower cost of living. Whatever you do, be sure to have a solid retirement plan in place, and act on it.Read NextFeb 28, 2026 •By Christy BieberNew Study Reveals Unexpected Threat to Social SecurityFeb 28, 2026 •By Christy BieberMedicare Paid $12.3 Billion for These Services in 2024 & Now It's Limiting CoverageFeb 28, 2026 •By Maurie BackmanWorking After Claiming Social Security?

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These Cities Make It Easier Than You Think.About the AuthorSelena Maranjian is a contributing personal finance and investing expert at The Motley Fool. Selena has produced The Motley Fool’s nationally syndicated newspaper feature since 1997. She is the author of The Motley Fool Money Guide and Investment Clubs: How to Start and Run One the Motley Fool Way, and the co-author of The Motley Fool Investment Guide for Teens and several editions of The Motley Fool Investment Tax Guide. Prior to The Motley Fool, she worked as a high school teacher and public opinion analyst. She holds a master’s degree in teaching from Brown University and a master’s degree in finance from the Wharton School of the University of Pennsylvania.TMFSelena