You're 62 Years Old With $1 Million Saved: Can You Retire?
The answer depends on several factors. The key is to create a plan that combines all aspects of retirement — income, taxes, health care and legacy planning.


“How much do I need to retire?” People frequently ask me that question, which I addressed in a previous Kiplinger article, How Much Do You Need for a Comfortable Retirement? In that article, I explained that how much you will need in retirement depends on many factors, including how much you will receive in Social Security benefits, whether you have a pension, how much you need to cover day-to-day expenses, etc.
Many people come to the conversation believing that everyone needs $1 million saved before retiring. Whether that’s true or not also depends on several factors.
Let’s look at an example. John and Jane are married. Both are 62 years old, and they have $1 million saved for retirement. Based on his work history, John’s projected monthly Social Security benefit will be about $3,000, while Jane will receive about $1,500 in monthly benefits due to the spousal benefits rule within Social Security. Neither of them has a pension. (The details in this example have been updated.)

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
The couple are ready to retire after 40 years of working. They say they need $6,000 in monthly income to live their desired lifestyle in retirement. If that’s the case, they will need to withdraw an additional $1,500 per month from their retirement accounts.
Looking ahead
During our analysis, we also see that John and Jane will likely have an excess amount of retirement savings when they pass away. They may want to consider either spending more money now or putting together a legacy plan indicating where the money should go when they’re gone. They will likely also want to consider other factors — such as future health care or long-term care needs, when deciding how much to take from their accounts each month.
Now, let’s use a similar scenario in which John and Jane say they need $10,000 per month in income. That same $1 million likely won’t stretch as far, and we may have to explore other options for the couple. They may need to work longer, work part-time in retirement, or live on less in retirement to accomplish their goals. When we work with families like John and Jane, we examine all scenarios to determine which options will help them avoid running out of money in their later years.
Investors with more than $1 million saved may want additional strategies to pay less in taxes and mitigate risk within their portfolio. One area we look at is required minimum distributions (RMDs). These are annual withdrawals the IRS says you must take from your qualified retirement accounts when you turn 73 or 75 (depending on your year of birth).
RMDs could push you into a higher tax bracket
Since RMDs are counted as ordinary income, they are taxable and could force you into a higher tax bracket. This, in turn, could result in up to 85% of your Social Security benefits becoming taxable as well. The higher income could also force you to pay higher Medicare premiums. This means diligent savers may end up paying more for medical care in retirement than those who haven’t saved as much (however, just because you pay more doesn’t mean you get more or better care!). We typically start by looking at our client’s total taxable retirement income and deploying strategies to reduce their tax bill.
The key to making these strategies work is to proactively create a plan that combines all aspects of your retirement — income, taxes, health care, and legacy planning — together. Maybe you already have $1 million saved, and you’re wondering if you can retire now. Or maybe you’ve waited to start planning for retirement and want to ensure you’ll have enough. Whatever your scenario, making decisions now can set you up for success later.
The appearances in Kiplinger were obtained through a PR program. The columnist received assistance from a public relations firm in preparing this piece for submission to Kiplinger.com. Kiplinger was not compensated in any way.
Related Content
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

As Founder and CEO of Peak Retirement Planning, Inc., Joe Schmitz Jr. has built a comprehensive retirement planning company focused on helping clients grow and preserve their wealth. Under Joe’s leadership, a team of experienced financial advisers use tax-efficient strategies, investment management, income planning and proactive health care planning to help clients feel confident in their financial future — and the legacy they leave behind. Joe has also written two books, I Hate Taxes (request a free copy) and Midwestern Millionaire (request a free copy). You can find Joe on YouTube by clicking here, where he creates educational videos for those in or near retirement with $1M or more saved.
-
Baby Boomers vs Gen X: Who Spends More?
Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
Retire in Finland and Live the Nordic Dream
Here's how to retire in Finland as a US retiree. It's ideal for those who value natural beauty, low crime and good healthcare.
-
Baby Boomers vs Gen X: Who Spends More?
Baby Boomers and Gen X are guilty of spending a lot of money. Here's a look at where their money goes.
-
You're Close to Retirement and Cashed Out: How Do You Get Back In?
If you've been scared into an all-cash position, it's wise to consider reinvesting your money in the markets. Here's how a financial planner recommends you can get back in the saddle.
-
After the Disaster: An Expert's Guide to Deciding Whether to Rebuild or Relocate
Homeowners hit by disaster must weigh the emotional desire to rebuild against the financial realities of insurance coverage, unexpected costs and future risk.
-
A Financial Expert's Tips for Lending Money to Family and Friends
What starts as a lifeline can turn into a minefield if the borrower ghosts the lender. Following these three steps can help you avoid family feuds over funds.
-
Stock Market Today: Good Feelings and Solid Data Lift Stocks
Resilience and de-escalation defined another generally positive day for financial markets.
-
Should You Ditch Your Medicare Advantage Plan? Most People Do
If you want to switch your Medicare Advantage plan or enroll in original Medicare, you're not alone. Here's when it's a good idea and how to go about it.
-
The 401(k) Mistake That Could Cost You Millions in Retirement Savings
Thinking about reducing your 401(K) contributions in the current market? Here are six reasons why you may want to reconsider.
-
What the HECM? Combine It With a QLAC and See What Happens
Combining a reverse mortgage known as a HECM with a QLAC (qualifying longevity annuity contract) can provide longevity protection, tax savings and liquidity for unplanned expenses.