You may be wondering if you have saved enough for retirement, especially if you want to try to retire early. You may be surprised to learn that what you've saved so far could last longer than you think.
Saving $1 million for retirement could be a daunting goal; however, it may be enough when you look at it as a piece of your overall retirement plan.
So before you get discouraged by how much you've saved — or haven't saved — for retirement, here are reasons why $1 million in savings is still a great target.
Steal this billionaire wealth-building technique
The ultra-rich have also been investing in art from big names like Picasso and Bansky for centuries. And it's for a good reason: Contemporary art prices have outpaced the S&P 500 by 136% over the last 27 years.
A new company called Masterworks is now allowing everyday investors to get in on this type of previously-exclusive investment. You can buy a small slice of $1-$30 million paintings from iconic artists, all without needing any art expertise.
If you have at least $10k to invest and are ready to explore diversifying beyond stocks and bonds, see what Masterworks has on offer. (Hurry, they often sell out!)
It's a good supplement to Social Security
/images/2022/11/21/cards-with-social-security-label.jpg)
You've been paying into Social Security during your work life so that you have a steady income when you retire, but you can't depend on Social Security alone.
A million dollars in savings for retirement can be a great way to secure a stress-free retirement and help cover necessary monthly expenses as well as special items like travel.
Want to learn how to build wealth like the 1%? Sign up for Worthy to get ideas and advice delivered to your inbox.
It gives you more options of where to live
/images/2022/12/05/mature_couple_carrying_boxes_on_moving_day.jpg)
If you have $1 million saved, you may not feel as much pressure to immediately pack up and downsize or move to a low-cost area.
But if you're worried about your cash lasting long enough, you'll want to factor in the cost of living when deciding where to live. Consider moving to a lower-cost-of-living state or city to maximize your retirement savings and make it work for you.
It provides a solid base for your budget
/images/2023/02/20/paperwork_and_happy_black_couple_on_sofa.jpg)
It's important to create an estimated retirement budget before you retire to give you a realistic idea of what your expenses will be. A budget will provide a good starting point to set your goals.
If you have $1 million saved already, it's easy to factor that into your estimated budget because it's money you already have and could make you feel more comfortable with your plans for your retirement budget.
If you’re over 50, take advantage of massive discounts and financial resources
Over 50? Join AARP today — because if you’re not a member you could be missing out on huge perks. When you start your membership today, you can get discounts on things like travel, meal deliveries, eyeglasses, prescriptions that aren’t covered by insurance and more.
How to become a member today:
- Go here, select your free gift, and click “Join Today”
- Create your account (important!) by answering a few simple questions
- Start enjoying your discounts and perks!
You’ll also get insider info on social security, job listings, caregiving, and retirement planning. And you’ll get access to AARP’s Fraud Watch Network to help you protect your money, as well as tools to help you plan for retirement.
Important: Start your membership by creating an account here and filling in all of the information (Do not skip this step!) Doing so will allow you to take up 25% off your AARP membership, making it just $15 the first year with auto-renewal.
It can produce nice income
/images/2022/09/01/social_security_benefits_identification_card_with_100_dollar_bills.jpg)
Using the rule of 4%, a retiree may comfortably withdraw 4% from their retirement investments each year without worrying about running out of cash during their retirement years. That will produce an income of $40,000 a year.
Be aware that other factors may affect the income $1 million produces, such as a decline in the stock market, inflation, or an economic downturn.
So while the 4% is good, you also may want to have some extra cash saved or be flexible and cut back on expenses if needed.
It helps you pay down debt
/images/2023/01/24/sad-man-holding-credit-cards.jpeg)
One thing you don't want to take with you into retirement is debt, so it's important to find ways to get that debt off your balance sheet before you retire.
While you're still working, you have an income to cover your debts like a car payment or credit card. The sooner you can crush your debt, the happier you'll be when you retire.
Trending Stories
It can help with medical expenses
/images/2023/02/20/stethoscope_with_clipboard_and_laptop_on_desk.jpg)
The cost of health insurance, whether you pay it or your employer covers it, can be daunting. When you're planning for retirement, you have to figure out what you'll need to cover medical expenses.
A report by Fidelity found that a couple will spend $315,000 on medical expenses during retirement.
But remember that when you retire, you'll be able to rely on Medicare to help you cover medical expenses beginning at 65 years old. So factor in any reduction in out-of-pocket expenses that you'll be able to make when you hit your Medicare milestone birthday.
It gives you options to diversify
/images/2022/09/19/candle_stick_graph_chart.jpg)
No matter what stage of life you're in, it's good to have a diversified portfolio. When you retire, you definitely need to reduce the risk so that you can weather a stormy stock market. With $1 million in savings, you'll be able to make flexible retirement investments.
Remember that you'll want to reduce your risk as you get older and think about moving some of your investments and assets into safer investments. You may want to try these must-have investing apps to help you adjust your investment strategy as you prepare for retirement.
It's a tangible goal
/images/2023/02/20/house_model_with_growth_plant_on_stack_of_coins.jpg)
Setting a specific goal when you're trying to save for retirement may make it more tangible, and $1 million is a great place to start.
Establishing your target now can help you form a plan to reach that concrete goal, give you something to look forward to, and give you a solid perspective of where you want to be before you hand in that resignation letter.
It's a good start
/images/2022/12/08/woman_using_smartphone_with_cryptocurrency.jpg)
You may not be able to retire with just $1 million, but it's a good start to help you achieve your retirement goals.
You may not feel the same pressure to save as your peers do because you've already been saving to get to your $1 million goal. And you won't have to find ways to catch up or invest more now to get to that $1 million level.
In 2023 Americans lost over $10 billion to identity theft and fraud
That's right. According to the FTC, Americans lost over $10 Billion to fraud and identity theft in 2023.
But you can safeguard your data with all-in-one identity theft protection services from Aura which comes with $1,000,000.00 in identity theft insurance1 <p>Identity Theft Insurance underwritten by insurance company subsidiaries or affiliates of American International Group‚ Inc. The description herein is a summary and intended for informational purposes only and does not include all terms‚ conditions and exclusions of the policies described. Please refer to the actual policies for terms‚ conditions‚ and exclusions of coverage. Coverage may not be available in all jurisdictions.</p> per adult, to cover you should you have eligible identity theft-related losses.
An individual plan starts at $9 per month, and you can choose a family plan that outmatches most others - includes Dark Web monitoring to scour data breaches and leaks for your sensitive personal data — such as Social Security numbers (SSN), Medicare information, and phone numbers.
Before you make your next online purchase, protect what you’ve built for a fraction of what it could cost you if your data were compromised.
You have room to splurge
/images/2022/11/28/happy-woman-holding-shopping-bags-and-coffee.jpeg)
Reaching that $1 million mark could help you do all those things you've dreamed of doing in retirement instead of simply paying necessary bills.
Perhaps you want to add a line for travel on your estimated retirement budget or you'd like to go out to dinner more often. These splurges can be fun additions to your retired life because you have saved enough to retire in the first place.
Bottom line
/images/2022/12/08/active_seniors_riding_bike.jpg)
You can reach a major retirement milestone like $1 million in your bank account. Remember to set realistic savings goals to get you to that first million and find ways to supplement your income so you'll be ready to retire.
In addition to creating your retirement budget, make a plan for what you want to do when you retire. Those dreams of traveling, playing golf, or trying that hot new restaurant can motivate you to save for the day when you're no longer working.
FinanceBuzz writers and editors score products and companies on a number of objective features as well as our expert editorial assessment. Our partners do not influence our ratings.
Earn 1% cash back on up to $3,000 in debit card purchases each month.2 <p>See website for details.</p> No minimum deposit or balance. FDIC Insured.
Become a member and enjoy discounts on things like travel, meal deliveries, eyeglasses, and more.
Helps to identify and prevent fraud in real-time with 24/7 U.S.-based support.
Subscribe Today
Unlock the Best Banking Deals and Bonuses
From high-yield savings accounts to cashback checking and sign-up bonuses, we bring you the best banking offers to grow your money smarter.