Retirement Retirement Planning

10 Reasons Why $1 Million is Still a Good Retirement Savings Goal

A million dollars might not buy what it used to, but it's still a solid retirement target.

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Updated March 19, 2025
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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.

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It's a good supplement to Social Security

JohnKwan/Adobe social security cards

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.

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It gives you more options of where to live

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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

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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.

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It can produce nice income

JJ Gouin/Adobe social security benefits identification card with 100 dollar bills

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

Shisu_ka/Adobe man holding credit cards in hand with calculator and papers in background

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.

It can help with medical expenses

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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

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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

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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

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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.

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You have room to splurge

Yakobchuk Olena/Adobe happy young woman strolling in a street with shopping bags

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

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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.

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