Retire With Less Than One Million Dollars? Sure

From the archives. First published three years ago, these thoughts continue to be appropriate as 10,000 people a day retire.

According to many retirement advice experts, $1,000,000 is the minimum you need in your investments accounts to have a satisfying retirement. Others say you need something north of $2 million to rest easy.

As regular readers know, I tend to push back against such generalizations. How someone can draw a line in the sand and tell you what you must have or must do without knowing you and your situation is poppycock (I love that word!).  I offer suggestions and advice based on my experiences and feedback from readers, but I hope I am never guilty of telling you "my way or doom."

That being said let me offer some thoughts on how the non-millionaires among us can still retire and enjoy a fulfilling and stimulating life. Again, I will say these are thoughts from me. They may not work for you, or you may have even better ideas which I sincerely hope you will leave as comments below.

In the interest of full disclosure I will state that with all my assets, minus my almost non-existent debt, Betty and I are technically millionaires. But, I have never thought of myself that way, and honestly, I live my life denying that fact. I live my retirement years on a nest egg that I see as several hundred thousand dollars below that figure. Why? To give me a safety net if everything starts to fall apart and to keep me from making the mistakes that I see too many others making: living for wants and instead of a balance of needs and wants.

How to retire without a million dollars is really quite simple: adjust your lifestyle to what you have to work with. That includes any 401(k) or IRA accounts, any other investment accounts, Social Security, the value of your home or other real estate, projected inheritance (if any), and part time or full time income.

Specifically:

1) The vast majority of us can substantially lower our everyday expenses after retirement. My book, Living a Satisfying Retirement, includes a section on this very topic. The average of those surveyed  is much closer to folks living on 50% of their pre-retirement income. Betty and I are closer to 40%, even though we live well and are much happier than when my salary was into six figures. Possessions and things don't motivate us nearly as much.

2) For unexpected emergencies and expenses set aside enough to live for 6 months, or pay for a large emergency. Remember, even if you have insurance for whatever the problem, you will probably have to fight for that money and/or wait months or years to be reimbursed. The worst scenario is to max out credit cards or a home equity loan.

3) Simplicity and retirement can often go together. Most of the retirees I come into contact with, both in real life and through the blog, have downsized both possessions and desires. Less really is more: more time, freedom, and flexibility. Keeping up with the Joneses becomes very unimportant.

4) Adjust your expenses based on two things: changes in your investments and changes in your lifestyle. This is rather obvious. When my investments were earning 8-10% my income and spending options were different than they are with something closer to 3%. And, Betty and I are very happy with simple meals, simple pleasures, and simple living.

5) Accept that the condo on Maui and the world cruise are out. Rejoice in all you can do. With a nest egg of less than $1,000,000 and upwards of 30 years left to live, your ability to live the large life is not likely. So, rejoice with what you do have and what you can do. Even if you live almost solely on Social Security and must count every penny, remember you are still better off than at least 80% of the rest of the people on this planet. We have so many opportunities and blessings we can lose sight of how good we really do have it.

6) Aggressively protect your health. As I age I realize how incredibly crucial this is to the rest of my satisfying retirement. Taking shortcuts now in terms of foods I eat, exercising, and regular health checkups will cost me later, and I don't just mean monetarily. I mean in my mobility and freedom to do what pleases me. I mean in how much of a burden I place on loved ones.


It is hard for me to express, just in words, how much more fulfilling and satisfying my lifestyle is today on 60% less money than I once earned. As soon as I adjusted my mindset to living and not spending a load was lifted and my life took on a whole new depth and sweetness.

How much do you need to achieve this same state? I have no idea and I'm not going to give you a figure. That is for you to determine. But, I will tell you the experts are wrong: you can be happy and productive without achieving whatever is the latest magic number they are promoting.