Can I Retire on a Million Dollars?

Can you retire on 1 million dollars? See how this depends on your current age because of inflation effects over time, and how a retirement calculator can help you set your savings goals.
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portrait of a happy elderly couple relaxing together

How much money do you need to retire?

According to Transamerica’s annual retirement survey, the average American has about $50,000 saved for retirement, yet 29% of workers have taken a loan or early withdrawal from their retirement accounts.

Considering the average 65-year-old can expect to live about another 20 years — and roughly half live even longer — the average retirement nest egg may not stretch out far over retirement, even when supplemented by social security.

So how much do you need to retire? Can you retire on $1 million?

While a million dollars has traditionally been the benchmark for wealth in this country, the effects of inflation can diminish the average retirement nest egg significantly. The purchasing power of a million dollars by the time you retire depends a great deal on how old you are now.

A look at what a million dollars might be worth in today’s money for different age groups may be an eye-opener for those wondering, “How much do I need to save for retirement?”

Compare savings account rates

How Much Do You Need to Retire?

So back to the question of whether $1 million could be enough to fund your retirement.

Based on the average annual rate of inflation over the past 50 years, the following is what $1 million would be worth in today’s dollars for people at the following ages by the time they reach age 65:

Current Age

$1 Million at Retirement Is Worth This Amount Today









Retirement Savings by Age

To look at the problem from another angle, given the impact of inflation over time, how much would you have to save if you wanted to retire with the equivalent of $1 million in today’s dollars?

Once again, because inflation generally has a greater effect over longer periods of time, the amount you would need depends on your age.

Based on the average annual inflation rate over the past 50 years, here is how much different age groups would need to save in order to retire at age 65 with a fund that would have the equivalent purchasing power of $1 million in today’s dollars:

Current Age

Amount to Save by Age 65

for $1 Million Purchasing Power in Retirement









Retirement savings calculator

Working Toward Average Retirement Savings Goals

Retirement saving involves several unknowns, making it challenging to answer, “Can I retire on a million dollars?”

For example, inflation rates over the past 50 calendar years have ranged from a low of 0.7% to a high of 13.3%. All of the above calculations about the effects of inflation were based on the average rate of inflation over the past 50 years. This is a reasonable method to use for long-term planning; but as you save for retirement over the years, you may need to adjust your sights depending on how inflation has impacted your savings so far.

Your savings goals depend on what kind of lifestyle you want in retirement, and how much you have to save to reach those goals depends on how much you’ve accumulated already and how many years you have to retirement. You can use a retirement calculator to run some numbers specific to your goals and situation.

Most likely, the numbers will underscore that saving for retirement is a big job. Starting early, saving more each year and working longer are all options for making your retirement savings goals more attainable.

About Author
Richard Barrington has been a Senior Financial Analyst for MoneyRates. He has appeared on Fox Business News and NPR, and has been quoted by the Wall Street Journal, the New York Times, USA Today, CNBC and many other publications. Richard has over 30 years of experience in financial services. He has earned the Chartered Financial Analyst (CFA) designation from the Association of Investment Management and Research (now the “CFA Institute”).