Can You Retire on $1.5 Million Comfortably? (Is It Enough to Retire at 55?)

Have $1.5 million saved for retirement? Wondering if you can retire at 60 with 1.5 million dollars? You can! And this is just as easy as retiring at 65-70 (when you can collect benefits).

Gauging by the 4% rule, you can withdraw $60,000 a year. And, if you're used to living on $70,000 or less today, this is probably totally doable! The only thing that you'll need to remember is that healthcare won't be covered for a few years.

But, if you can make it work for 5 years, then it's entirely possible to retire early with 1.5 million dollars at 60 years old.

Okay...so it's possible to retire at 60 with 1.5 million dollars, but what about earlier? Can you retire at 55 with 1.5 million dollars? Yes!

This is called early retirement (or FIRE) in most cases, and many people are already doing it. And, to give you some surety here, according to Bankrate's savings withdrawal calculator, if you earn just 4% on your $1.5 million and withdraw $60,000 a year, after 50 years, you'll still have $1.29 million!

Again, if you retire early, remember to have health insurance (or be able to cover emergencies) as well as check to see if you'll have any penalties for taking money out of investments. If you build a passive income portfolio, you may be able to avoid withdrawing money at all (or at least push it out a few years).

So...you can retire at 60 with $1.5 million...and at 55...What about younger? Can you retire at 45 with 1.5 million dollars? This may be pushing early retirement just a bit. But that doesn't mean it can't be done!

However, this will depend on a few factors, like:

• Do you have debt?

• Are there still children in the home?

• Do you live in a high cost of living area?

• Will you be able to cover medical costs for you and/or your family?

• Do you have enough to cover you for 30-50 more years?

If you can't answer those questions and feel confident in being able to make early retirement work, you may want to wait a few years. But, if you can live comfortably on the infamous $60k a year we've been discussing, then you might just pull it off!

Of course, as we mentioned, there are many factors at play here, so you can never say for sure. But, if you had a little side hustle in retirement (very few retirees do absolutely nothing), that might just give you the comfort you need to pull the plug on your day job and give early retirement a go at age 45!

With $2 million (if single), you could easily retire at 45-50 years old. Of course, this all depends on your current lifestyle and there are many factors that come into play. But, if withdrawing at 4% a year, $2 million will last 25 years at $80k a year, or 50 years at $40k a year (and that's with earning absolutely no interest on your money!!).

Related:

What Is The Interest on 2 Million Dollars? (...And Is It Enough??)

For many, a good retirement income per month would be between $4,000 and $5,000 ($48k-$60k a year). This may reduce once you pay off debt, lower your family members in the home, and other cost reductions. But overall, your lifestyle shouldn't (and probably won't) change much during retirement.

When you wonder, "Can I retire with 1.5 million dollars?", the other question that quickly comes to mind is, "How much will my social security check be?"

While many people under 50 shouldn't depend on getting traditional social security during retirement, that doesn't mean it won't happen. The average social security check in 2021 was $1,543 a month. Remember, this is just the average. Yours may be lower or higher depending on new laws, social security as a whole, and what you put into it.

The first thing you'll want to do is get rid of your debt. Retiring with debt obligations can cause stress and worry that no one should have to deal with. Of course, the most important debt to pay off is high-interest or consumer debt (like personal installment loans or credit cards).

After that, you can focus on student loans, your mortgage, and other lower-cost loans.The key is to make sure that your living expenses are as low as they can be. If you have high amounts of debt, you'll have to continue to pay them off with the money you could be enjoying.

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Another important thing to look at is your area's cost of living.

• For example, it's much cheaper to retire in Alabama than it is in California.

• And, rural or suburban areas are usually cheaper than the middle of the city.

Now, this is not to say you CAN'T live in a higher cost of living area. But, the lower your housing and area costs, the longer you can live on your retirement funds. And, certain states and countries offer benefits for retirees, so you could save money that way as well.

When it comes to retirement, the longer you wait, the more you can get. For example, Medicare doesn't kick in until you're 65 years old. And, you'll receive penalties if you withdraw your retirement income before 59 1/2.

When you're thinking about retirement, often times the best thing to do is wait until you're 65 so your benefits will immediately kick in. But, if you want to retire early, you'll need to make sure that you can fund your medical costs, bills, and other needs before you reach that age.

For many people, boredom = spending money. And, retirement has been shown to cause depression, mental decline, and even physical decline. No one wants that! While you won't have to work anymore, focus on staying busy. You can...

• volunteer,

• garden,

• get a part-time job (if you enjoy it),

• pick up some hobbies,

• or spend time with loved ones more.

But it's just important to keep it moving and find a purpose outside of making money.

The question, "Can you retire with 1.5 million dollars?" actually becomes easier if you're okay with investing while you're retired. So, want to keep that money growing, even without you working?

Easy, just re-invest funds. This could be money that you don't end up spending, dividends, or even passive income. This money will continue to sit and collect interest, even if you're not working and saving in traditional routes like 401(k)s.

Or, just don't touch your money unless you need to! For example, if you make passive income from a business like real estate, live off of that money instead of your investment money. That way, that money can continue to grow.