4 Signs $1M Won’t Be Enough for Your Retirement
Decades ago, $1 million seemed like a lot of money. It definitely would have been enough to retire with. These days, that’s not always the case. According to Citizens Bank, you should have between 10 and 12 times your final annual salary saved for retirement.
According to this metric, if you make $85,000 or more during your final year of work, you should have more than $1 million saved at least.
Here are the signs that you’ll need more in retirement.
1. Your Annual Spending Will Be More Than $60,000
Dawid Siuda, a finance expert with Omni Calculator, said that though knowing how much you earn is important, you want to pay just as much attention to how much you’re spending during your final year of employment. According to Siuda, if you’re spending over $60,000 a year, you’ll need more than $1 million in retirement.
If you retired at 65 and spent $60,000 a year, you’d only have 18 years’ worth of expenses covered. You should be able to live for at least 20 years’ worth of expenses.
“In places like New York City, San Francisco, or LA, $1 million can evaporate shockingly fast once housing, healthcare, and taxes compound, and that’s before you factor in long-term care. If your city sits high on cost-of-living rankings, that alone is a red flag,” said Siuda.
Read More: Major 401(k) Change Coming in 2026 — High Earners Must Act Now
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2. Health Expenses Are Projected To Be Over 20%
It’s well-known that healthcare gets more expensive as you age. If your projected healthcare expenses over the next 20 years are looking like they’ll be over 20% of what you’ve saved, this could mean you’ll go through your savings quicker than you’d like, according to Nick Manfredi, the CEO of As-Is Housebuyers.
For a $1 million retirement fund, this figure would be $200,000. That’s $10,000 a year for 20 years. “Consider your health bills-premiums, co-pays and long-term care that is likely to come,” Manfredi said. “Research indicates that once medical expenses reach that [20% or more] threshold, then there is a 60% probability that your finances will be depleted before you are.”
3. You Have a Mortgage
Having a mortgage is doable with $1 million, but you have to calculate how long you’ll be paying it and how much it will cost you before you retire.
“The first red flag is having a mortgage, high property taxes or a home that is costly to maintain when you are going into retirement,” said Chase Baxter, the owner of Spokane Cash Home Buyers. “Your savings can be washed away in such instances sooner than you anticipated.”
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