Retiring at 60 with $1 million is possible for some people, but the outcome depends on how long the money needs to last, how much is withdrawn each year and what other income sources are available. A portfolio of that size may support annual withdrawals of roughly $40,000 to $50,000, before taxes and inflation adjustments. Social Security benefits, part-time work or a pension can supplement withdrawals and reduce pressure on savings. Housing costs, healthcare expenses and lifestyle choices also shape whether $1 million provides enough income over a multi-decade retirement.
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How Much Income Can $1 Million Generate at Age 60?
The income a $1 million portfolio can generate at age 60 depends largely on how conservatively withdrawals are structured and how long the money is expected to last. Because retiring at 60 often means planning for 30 years or more of spending, many retirees lean toward lower withdrawal rates than someone retiring later in life.
Using an updated version of the 4% rule (which suggests that 4.7% is a safe withdrawal rate for retirees), a $1 million portfolio could support annual withdrawals of about $47,000 before taxes. 1 This framework assumes a diversified mix of stocks and bonds and is intended to provide a reasonable balance between spending and portfolio longevity.
More cautious guidance produces lower income estimates. Morningstar’s projected safe withdrawal rate for 2026 suggests withdrawals closer to $39,000 per year. 2 That lower figure reflects expectations for more modest long-term investment returns and a greater emphasis on minimizing the risk of depleting assets too early.
However, Morningstar’s research also suggests that retirees who adopt a more flexible spending strategy may be able to start closer to a 5.7% withdrawal rate. Examples of such flexibility include reducing or pausing inflation adjustments after poor market years, setting spending “guardrails” that trigger modest cuts when a portfolio declines or temporarily trimming discretionary expenses during downturns.
Under this model, a $1 million portfolio could initially support withdrawals closer to $57,000 per year, with the understanding that spending may fluctuate over time. The potential downside is less predictability in annual income. The upside is having potentially higher lifetime spending without materially increasing the risk of running out of money.
Factoring in Social Security
Someone retiring at 60 cannot begin collecting Social Security retirement benefits until age 62. That creates a two-year gap during which income must come entirely from personal savings, taxable investments or other sources, such as part-time work or a pension. For many retirees, this means drawing more heavily from their portfolio early in retirement.
The timing of when benefits start also affects monthly payments. Claiming at 62 results in permanently reduced benefits, while delaying benefits beyond full retirement age increases monthly income. For example, a person whose full retirement age is 67 would see their lifetime benefits reduced by 30% if they claim early at 62. Conversely, delaying Social Security until age 70 would increase their benefits by 24%.
Coordinating Social Security timing with portfolio withdrawals can shape how long savings last and how much flexibility a retiree has in later years.
Planning for Expenses
Retiring at 60 shifts the focus from saving to managing a wide range of ongoing and future expenses. One of the largest near-term costs is healthcare, since Medicare coverage does not begin until age 65. That leaves roughly five years where retirees must rely on employer coverage through a spouse, COBRA or individual marketplace plans, often paired with deductibles and out-of-pocket costs that can fluctuate from year to year.
Housing is another major variable. Some retirees enter retirement with a paid-off mortgage, while others still carry loan balances or plan to move. Property taxes, insurance, maintenance and potential renovation costs can add up, even without a monthly mortgage payment.
Further, everyday living expenses, such as food, utilities, transportation and insurance, will continue in retirement. Meanwhile, discretionary spending on travel, hobbies and entertainment often rises during early retirement. Taxes should also be factored in, particularly if withdrawals come from a mix of taxable, tax-deferred and Roth accounts. Building a detailed spending estimate can help determine whether projected income aligns with anticipated costs.
Retiring at 60 With $1 Million: Running the Numbers
Looking at sample cash-flow scenarios helps translate withdrawal rates into real-world tradeoffs. Assume a retiree targets $60,000 in annual spending at age 60. If they follow Morningstar’s baseline safe withdrawal rate and draw $39,000 a year from their portfolio, the remaining $21,000 would need to come from other sources, such as part-time work, a small pension or reduced spending. Without outside income, that spending target may be difficult to sustain.
Using an updated 4% framework and withdrawing about $47,000 narrows the gap. In this case, the retiree would still need to cover roughly $13,000 through other income or lower expenses. A flexible strategy starting closer to $57,000 could cover most of the $60,000 goal. However, in that scenario, spending might need to be trimmed in years when markets perform poorly.
Now factor in timing shifts. If Social Security begins at 62 and provides $18,000 per year, portfolio withdrawals could drop by that amount. A retiree withdrawing $47,000 at age 61 might only need to withdraw $29,000 at age 62. This would reduce long-term pressure on savings and improve the chances that $1 million lasts across a multi-decade retirement.
Bottom Line
Retiring at 60 with $1 million sits at the intersection of spending discipline, flexible withdrawals and thoughtful income coordination. For some households, the numbers can work with realistic expectations and periodic adjustments. For others, delaying retirement, saving more or supplementing income may create a more comfortable margin. Evaluating different scenarios and stress-testing assumptions can clarify which path best aligns with personal goals and financial realities.
Photo credit: ©iStock.com/Jacob Wackerhausen, ©iStock.com/Jacob Wackerhausen, ©iStock.com/Dilok Klaisataporn
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