Navigating Retirement at 65 with $1 Million in Savings

Retiring at 65 with $1 million saved is a dream for many Americans. While inflation has eroded the value of a million dollars, it can still provide a comfortable lifestyle, depending on various factors. The lifestyle one can achieve with $1 million in retirement savings is contingent on living expenses, debts, location, number of dependents, and how the money is managed and invested.

“The most important variable to factor into your retirement lifestyle is your estimated living expenses,” says Patrick Marcinko, an associate financial advisor at Bogart Wealth. If living expenses are low, $1 million can be more than enough for a comfortable lifestyle. Conversely, if living expenses are high, $1 million may not suffice, necessitating a reevaluation of retirement plans. 

Location is also a crucial factor that impacts the retirement lifestyle. “One million will not go nearly as far in a higher cost of living city such as New York City compared to a lower cost of living city like Wichita (Kansas),” says Matt Mondoux, a senior financial advisor at Blue Chip Partners. Moreover, being debt-free enhances retirement prospects. “Your debt load could weigh heavily on what a healthy retirement looks like,” Marcinko adds. 

Furthermore, the number of dependents a retiree supports can significantly impact their lifestyle. “Retirement lifestyle is greatly affected by how many people the savings are supposed to support,” Marcinko says. Lastly, how the $1 million is managed and invested is critical. Peter Casciotta, owner of Asset Management & Advisory Services of Lee County, suggests that if appropriately managed, a 5% annual distribution is possible, which can significantly enhance one’s retirement lifestyle.

While a million-dollar retirement may seem like a dream, it requires careful planning, budgeting, and wise investment decisions to ensure a comfortable and fulfilling lifestyle. Remember that unforeseen medical expenses can also erode savings, so it is essential to have a comprehensive financial plan that considers all these variables.