Approaching retirement with $2 million in savings puts many couples in a strong financial position. But is $2 million enough for you and your spouse to retire comfortably? That answer depends on lifestyle, health, income needs and how long you expect retirement to last. While $2 million covers retirement for some couples, it may not be enough for those with higher expenses or early retirement plans.
Is $2 Million Enough for a Couple to Retire?
To determine whether $2 million is enough for a couple to retire, it helps to start with some common retirement planning benchmarks.
The 80% Rule
A widely accepted guideline suggests that retirees need approximately 80% of their pre-retirement income to maintain their standard of living. For example, if you and your spouse earned a combined $150,000 annually before retiring, you’d aim to replace about $120,000 per year in retirement through portfolio withdrawals, Social Security, pensions and other sources.
Now let’s see how $2 million holds up to this benchmark.
The 4% Rule
The 4% rule is a general guideline that suggests retirees can withdraw 4% of their portfolio in the first year of retirement, and then increase their annual withdrawals for inflation. Using this rule, you and your spouse could withdraw $80,000 from a $2 million portfolio in your first year of retirement.
This approach is designed to ensure savings last for a 30-year retirement. However, it doesn’t guarantee success and doesn’t factor in other income sources like Social Security or pensions. Market performance, inflation and personal spending patterns can all affect how sustainable this withdrawal rate truly is.
Adding in Social Security
For a couple, Social Security can contribute significantly to annual income in retirement. If both you and your spouse receive the average retirement benefit—$1,997 per month, as of March 2025—that’s $47,928 in combined annual Social Security income.
Combined with portfolio withdrawals, your total income would be $127,928 in year one—exceeding the 80% replacement guideline. This is likely sufficient for a moderate-to-comfortable lifestyle, assuming expenses don’t significantly increase due to health or long-term care needs.
Sample Asset Allocation for a $2 Million Retirement Portfolio
Your investment choices affect how long your retirement portfolio lasts and how much income it generates. Here’s a sample moderate allocation for a retired couple with $2 million:
- 40% in U.S. and international stocks = $800,000
- 40% in bonds and fixed income = $800,000
- 10% in cash or money market funds = $200,000
- 10% in real estate investment trusts (REITs) or dividend-paying ETFs = $200,000
Annual Income and Growth Potential
Assuming a 4–5% average annual return across the full portfolio, here’s a simplified income projection:
- $2,000,000 × 4.5% = $90,000 in potential annual return
This return could be reinvested for growth or used as income, depending on your withdrawal needs. Holding some assets in cash or short-term bonds adds liquidity and protects against volatility.
A diversified portfolio can also help hedge against inflation, generate dividend income and preserve capital over a long retirement horizon.
Sample Retirement Budget for a $2 Million Retirement Portfolio
A critical step in determining whether $2 million is enough is to estimate your retirement spending. Your expenses will vary depending on location, lifestyle and health.
Sample Monthly Budget
| Category | Estimated Monthly Cost |
|---|---|
| Housing (property tax, insurance, maintenance) | $2,175 |
| Utilities & Internet | $300 |
| Groceries | $700 |
| Transportation (fuel, insurance, maintenance) | $400 |
| Healthcare (Medicare premiums, copays, prescriptions) | $800 |
| Travel & Entertainment | $600 |
| Dining Out | $300 |
| Insurance (life, long-term care) | $200 |
| Miscellaneous & Gifts | $300 |
| Total Monthly | $5,775 |
| Total Annual | $69,300 |
This budget leaves ample room under the projected $127,928 in annual income we calculated earlier, giving the couple flexibility for travel, emergencies and estate planning.
Factors That Can Affect Your Budget
Your savings matter, but location, lifestyle and healthcare needs also shape your retirement budget. Even with strong savings, these factors can limit how far your money stretches. As you plan for the years ahead, it’s important to think about the big-picture factors that could raise or lower your annual expenses. Below are some of the most common elements that can influence a couple’s retirement costs.
- Location: Retiring in a high-cost urban area like San Francisco or New York may require significantly more annual income while living in a low-cost state like Tennessee or Arizona could reduce costs.
- Healthcare: Even with Medicare, out-of-pocket costs can rise with age. A couple that retired in 2024 at 65 may spend approximately $330,000 on healthcare (not including long-term care) throughout retirement, according to Fidelity.
- Lifestyle: Frequent travel, expensive hobbies, or ongoing support for children or grandchildren can significantly increase your spending.
Bottom Line
Is $2 million enough for a couple to retire? For many couples, the answer is yes, especially when paired with Social Security and a moderate lifestyle. A $2 million investment portfolio can generate around $80,000 in your first year of retirement under the 4% rule. With Social Security, the combined income could reach nearly $130,000 per year.
Retirement Planning Tips
- A financial advisor can help you project how long your savings will last and how much income your assets will generate. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- SmartAsset’s retirement calculator can help model your financial future based on your age, savings and income needs. This free tool allows you to run different scenarios and see how long your money might last under various assumptions.
Photo credit: ©iStock.com/Vadym Pastukh, ©iStock.com/Jacob Wackerhausen, ©iStock.com/PeopleImages
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