What Kind of Retirement Can a $1 Million Nest Egg Buy You?

Core Insights - The article discusses the adequacy of a $1 million retirement savings goal, suggesting that individuals should evaluate their personal financial needs rather than adhering to a fixed target [1][7]. Withdrawal Rates - A $1 million nest egg can provide an annual income ranging from $30,000 to $50,000 depending on the chosen withdrawal rate, with a common guideline suggesting a 3% to 5% withdrawal rate [3][5]. - Using the 4% rule, a $1 million investment yields approximately $40,000 annually, while a conservative approach at 3% results in $30,000 [3][5]. - For those with a stock-heavy portfolio, a 5% withdrawal rate could provide $50,000 per year [4][5]. Additional Income Sources - Many retirees supplement their income with Social Security, which averages about $2,071 monthly, translating to roughly $25,000 annually [6]. - Other income sources, such as part-time work, should also be considered when planning retirement finances [6]. Personal Financial Planning - The article emphasizes the importance of personalizing retirement savings goals based on individual lifestyle expectations and spending needs [9]. - It suggests that a $1 million savings target may be suitable for some, but not necessary for others who plan to live frugally [7].