Retiring Early With $1.5 Million May Not Be Enough

Experts say $1.5 million is often a checkpoint rather than a finish line; at a conservative 3% withdrawal that sum would generate roughly $45,000 a year, and average Social Security benefits add about $24,000 annually.

Many people treat $1.5 million as a retirement finish line, but advisors say that number is often a baseline rather than a guarantee of financial freedom. Northwestern Mutual research found Americans in 2025 expected to need about $1.26 million by age 65, down from $1.46 million in 2024. Experts note that longevity, healthcare costs, inflation, taxes, interest rates, and unexpected family expenses all affect how far a nest egg will go. Advisors quoted in the article say early retirement often looks different in practice, with some people continuing to work in some capacity or planning for larger savings. Key points: - Northwestern Mutual reported the average American thought they needed $1.26 million by age 65 in 2025, compared with $1.46 million in 2024. - Assuming a conservative 3% withdrawal or return, a $1.5 million portfolio would generate about $45,000 per year; the reported average Social Security benefit for retired workers in November 2025 was $2,013.32 per month (about $24,000 per year), together roughly $69,000 annually. - Experts quoted include Taylor Kovar (who calls $1.5 million a ‘‘checkpoint’’), Hilary Hendershott (who describes it as a ‘‘moving target’’), Sybil Slade (who says the figure ‘‘isn’t reasonable’’ and links broader concerns to income and policy), and Ryan Greiser (who highlights long-term compounding of costs as a major risk). - Costs that can increase retirement spending include healthcare (medical inflation has historically run about 1.7 percentage points above general inflation), home maintenance, travel, family support, and unexpected one-time expenses. - Geographic differences matter: the article notes that retiring comfortably is not possible on $69,000 a year in 22 states, and gives Hawaii as an example where nearly $130,000 per year is estimated as needed. Summary: The article reports that $1.5 million often functions as a minimum checkpoint, not a universal endpoint, because many variables will change over decades in retirement. Experts say people pursuing early retirement commonly plan for longer time horizons, revisit their retirement calculations regularly, and often continue earning in some form; specific next steps depend on individual circumstances and are undetermined at this time.