Can you retire on 1.5 million?

If you’ve reached this page asking yourself if you can retire on 1.5 Million Dollars, and you happen to live in the US, or, realistically, any country of the world, let me answer this question right away: the answer is yes, most likely.

Many people reach this site asking themselves if they have enough money to retire. The truth is, the answer depends a lot on your own situation, and your spending habits. However, there’s some significant data that indicates that 1.5 million is more than enough to retire.

Retire on 1.5 million, a definite possibility, according to data

Not so long ago, I wrote an article entitled “If you have more than a million dollars, you can probably retire already“. That article was based on a survey on popular financial blog “Mr Money Mustache”. At the time, the survey had received 160 answers. Today, with approximately 100 more answers (256 total answers at the time of this writing), I can confirm that 1 million dollars + a house is in general enough for the majority of people to retire.

1.5 million is, at this point, almost a guarantee you’re ready to pull the plug: at the time of this writing, more than 60% of the respondents had 1.5 Million dollars or less when they decided to retire early.

retire on 1.5 million, a definite possibility

The vast majority of the respondents live in the US, a country that I believe is more expensive than many other places in the world. Bottom line is, if you have enough money to retire in the US, you probably have enough money to retire everywhere else in the world as well.

How to retire early on 1.5 million

There’s no magic trick involved in retiring early. You just need to understand how much you spend every year and multiply that number by 25 (that’s the famous 4% rule) to understand how big your investment money needs to be. 1.5 million dollars lets you live on $60’000 a year (and that number will be adjusted with inflation). That’s more than the median US income. If your number is bigger than 1.5 million, depending on your situation there are lots of things you can do to reduce your yearly expenses, without impacting your lifestyle.

If you don’t have 1.5 million yet, you can of course ask yourself how to reach that number. In all cases, the key to early retirement is a combination of reducing your expenses and making more money.

  • The first thing you have to do is discuss your plans with your significant other, and get them on board
  • Secondly, you should track your expenses, have a budget, understand where you spend your money each month. Many financial bloggers recommend the free tools from personal capital to track all your accounts.
  • Start cutting on the big money tickets, strive to save a larger share of your take-home money every month (some details here)
  • Put the money you save in indexed funds or ETFs. Worry-free (long term) investments with an average of 7% return is where you want to go. Despite popular belief, the stock market (+bonds) is where this happens. Follow the boggleheads philosophy. Track your portfolio performance with a centralized tool. Some people do it on a google spreadsheet, here again others recommend the free services from personal capital.
  • (optional but a great accelerator) look for ways to generate side income

We summarize more key points here.

Disclaimer: links to personal capital in this article are affiliate links. You don’t pay anything extra but if you like their service and subscribed through my links, I get a commission.

  1. Bryan @ Just One More Year
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