Can You Retire Comfortably On Only Two Million Dollars?

Are wondering if you can retire comfortably on only two million dollars? It's possible, but it's becoming more difficult due to low interest rates, a shaky stock market, and high inflation eating away at your purchasing power. It now takes a lot more capital to generate the same amount of risk-adjusted income.

If you want to live the millionaire lifestyle, $3 million is the new $1 million due to inflation. Therefore, two million dollars is like having only $500,000 in real buying power from the past.

However, retiring on two million dollars is completely doable, especially if you retire later in life. If you are able to start withdrawing from your 401k penalty free at 59.5, have a pension, and/or can also start receiving Social Security as early as 62, two million dollars is more than enough to live a comfortable retirement life.

To make your dollar go farther, you can relocate to a lower-cost area of the country. Two million dollars isn't going to get you very far in Honolulu, San Francisco, or New York City. But it will in the Midwest or South.

Market Conditions Impact Your Retirement

In addition to your location's affordability, market conditions can also greatly impact if $2 million will provide you with a comfortable retirement. Let's look at some numbers to understand this further.

The amount of risk-free income you can generate on $2,000,000 largely depends on current rates and where they are headed. When the 10-year bond yield dropped down to 0.6% during the pandemic, you could only generate $12,000 a year. By early 2022, a 1.7% yield could generate about $34,000 annually. With the 10-year bond yield close to 5.0% at the end of 2023, however, you could generate $100,000 risk-free on $2 million. What a difference higher yields can make.

10-Year Bond Yield

Determining if you can retire comfortably on $2 million will thus depend on how you invest, economic conditions, and the outlook for interest rates.

In a high valuation and low interest rate environment, a proper safe withdrawal rate should initially be lower than 4%. If rates are high and predicted to stay high, however, you may be comfortable withdrawing at a higher rate since you can earn more passively.

Familiarize yourself with the current and predicted economic climate and interest rates conditions. This can help you determine the best draw down strategy on your retirement savings.

Retiring Comfortably On $2 Million

Once you’ve won the game, there’s no need to keep trying to amass a lot more wealth. Hit singles and stop worrying about money ever again! You can retire comfortably on only two million dollars for sure if you remain responsible.

Here's how much a $2 million portfolio can generate based on various withdrawal rates:

  • At a 2% withdrawal rate, that's $40,000 a year in income
  • A 3% withdrawal rate is $60,000 a year in income.
  • And a 4% withdrawal rate is $80,000 a year in income.

Not bad! If you add on any supplemental retirement income through freelance work, then you've really got a good income stream. You can also receive up to $4,555 in maximum social security benefit in 2023.

If you have adult kids who are financially independent and debt free, you should be able to easily afford retirement on two million dollars.

I Retired With $3 Million

In 2012, I decided to retire early with a $3 million net worth and $2 million in investable assets. The $2 million was able to generate $80,000 a year in passive income from rental properties, dividend stocks, bond interest, and more. As my investments grew, so did my passive income.

Also, one of the great things about retirement is that you DON’T need to save for retirement. A lot of people forget this important point once they retire because they’ve been so used to saving money.

I saved 50% – 80% of my after tax-income from 1999 – 2012 before I left the workplace for good. Yet, I STILL continued to save about 20% of my passive income for retirement my first couple of years out.

Now I’m back to saving and investing 80% of my income because my passion project in retirement, Financial Samurai, took off. Financial Samurai generates a healthy amount of supplemental retirement income which I reinvest in stocks, real estate, and alternatives.

I haven’t been employed since 2012, live in San Francisco, and have no financial fear anymore. If hard times come, then I will simply adjust my spending accordingly or draw from savings.

Before you go ahead and negotiate a severance from that job you hate, just know there are plenty of people who make $200,000 – $500,000 a year who feel like they are still scraping by!

Retiring Comfortably Off $200,000 In Investment Income

Here’s a real budget from a household with one child making $200,000 a year. This budget is a dime a dozen budget in the Bay Area or New York City with two people making about $100,000 a year or one spouse making $200,000 a year. The big difference is they have a mortgage and childcare, and you do not.

Therefore, if you can retire in a lower cost area of America or the world, your retirement budget will go a much longer way. And if you can pay off your house in full and have health insurance, living won't be very costly at all.

$200,000 Income And Still Not Feeling Rich - Can You Retire Comfortably On Only Two Million Dollars?
A family of four making $200,000 will see a tax hike of almost $4,000 a year under Trump's plan

Please find something you enjoy doing with your one and only life. If you’ve got a paid off house and $2 million, I say that’s good enough to retire comfortably. Just make sure you manage your risk exposure properly.

You don’t have to retire completely. You can do freelance work or work on your own business ideas. There’s nothing more rewarding than creating something from nothing and doing what you enjoy! Earning supplemental retirement income with two million dollars is a nice combination to retire comfortably.

However, the ideal retirement net worth to shoot for is about $10 million. Once you get to $10 million, you can really live it up in retirement.

If you have some passive investment income, no debt, and can collect social security, you should be able to retire no problem on two million dollars. If you are able to earn supplemental retirement income by consulting or doing some part-time work, then even better!

Recommendation To Manage Your Wealth

Sign up for Empower, the web’s #1 free wealth management tool to get a better handle on your finances. In addition to better money oversight, run your investments through their award-winning Investment Checkup tool to see exactly how much you are paying in fees. I was paying $1,700 a year in fees I had no idea I was paying.

After you link all your accounts, use their Retirement Planning calculator that pulls your real data to give you as pure an estimation of your financial future as possible using Monte Carlo simulation algorithms. Definitely run your numbers to see how you’re doing. 

I’ve been using Empower since 2012 and have seen my net worth skyrocket during this time thanks to better money management.

Empower Retirement Planner Free Tool
Empower's Free Retirement Planner

Build Build Retirement Income Through Real Estate

In addition to investing in stocks and bonds for retirement, invest in real estate to retire comfortably. Real estate is a core asset class that has proven to build long-term wealth for Americans. Real estate is a tangible asset that provides utility and a steady stream of income if you own rental properties.

Given interest rates have come way down, the value of rental income has gone way up. The reason why is because it now takes a lot more capital to generate the same amount of risk-adjusted income. Yet, real estate prices have not reflected this reality yet, hence the opportunity. 

I've personally invested $953,000 in real estate crowdfunding across 18+ projects to take advantage of lower valuations in the heartland of America. My real estate investments account for roughly 50% of my current passive income of ~$300,000 so my wife and I can stay retired and take care of our two children.

Take a look at my two favorite real estate crowdfunding platforms:

Fundrise: A way for accredited and non-accredited investors to diversify into real estate through private eFunds. Fundrise has been around since 2012 and has consistently generated steady returns, no matter what the stock market is doing. For most investors, investing in a diversified real estate fund is the easiest way to go.

CrowdStreet: A way for accredited investors to invest in individual real estate opportunities mostly in 18-hour cities. 18-hour cities are secondary cities with lower valuations, higher rental yields, and potentially higher growth due to job growth and demographic trends. If you have more capital and a real estate enthusiast, you can build your own select real estate fund with CrowdStreet.

Both platforms are free to sign up and explore. 

Read The Best Selling Personal Finance Book

If you want to dramatically improve your chances of retiring comfortably, purchase a hard copy of my new book, Buy This, Not That: How To Spend Your Way To Wealth And Freedom. The book is jam packed with unique strategies to help you build your fortune while living your best life. 

Buy This, Not That is a #1 new release and #1 best seller on Amazon. By the time you finish BTNT you will gain at least 100X more value than its cost. After spending 30 years working in finance, writing about finance, and studying finance, I'm certain you will love Buy This, Not That. Thanks for your support!

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About the Author: 

Sam began investing his own money ever since he opened an online brokerage account in 1995. Sam loved investing so much that he decided to make a career out of investing. He spent the next 13 years after college working in investment banking. During this time, Sam received his MBA from UC Berkeley with a focus on finance and real estate. In 2012, Sam was able to retire at the age of 34 largely due to his investments. He spends time playing tennis and hanging out with family. was started in 2009 and is one of the most trusted personal finance sites today with over 1.5 million organic pageviews a month. Financial Samurai has been featured in top publications such as the LA Times, The Chicago Tribune, Bloomberg and The Wall Street Journal. 

You can retire comfortably off two million dollars if you want to. You just have to manage your expenses and invest conservatively.