Will $1 Million Be Enough for My Retirement?
Using real BLS spending data for Americans aged 65-74 and the average Social Security benefit, we run the numbers on a $1 million portfolio with a 7% annual return and 3% inflation. The answer might surprise you.
Assumptions: $1M starting portfolio, 7% nominal growth (equity-heavy allocation), 3% inflation, 30-year horizon, pre-tax accounts.
What Does the Average Retiree Spend?
The BLS Consumer Expenditure Survey (2023) reports average annual spending for households headed by someone aged 65–74 at $56,000 per year. Important: the BLS survey does not include federal or state income taxes — those are tracked separately and can add several thousand dollars per year depending on your income sources and state.
| Category | Annual | Notes |
|---|---|---|
| Housing | $18,171 | Mortgage/rent, utilities, maintenance |
| Transportation | $8,055 | Car payments, gas, insurance |
| Healthcare | $7,838 | Premiums, out-of-pocket, dental |
| Food | $7,116 | Groceries and dining out |
| Entertainment | $3,286 | Travel, hobbies, subscriptions |
| Apparel & personal care | $1,872 | Clothing, grooming |
| Other | $9,662 | Gifts, insurance, misc. |
| Income taxes (not in BLS) | $2,000–8,000+ | Federal + state; depends on account type and state. $0 if Roth. |
| BLS subtotal (pre-tax) | $56,000 | Taxes not included in this figure |
Subtract Social Security
The average Social Security retired-worker benefit in 2024 is $1,907 per month ($22,884/year) — averaged across all claiming ages. Two things to note: (1) Medicare Part B premiums (~$175/month) are deducted directly from your SS deposit, so the net check is closer to $1,730/month. (2) This average blends early claimers (62, ~30% less) and delayed claimers (70, ~76% more) — your actual benefit depends heavily on when you claim.
Also: up to 85% of SS benefits are taxable as ordinary income if your combined income exceeds ~$44,000 (married filing jointly). That further increases the portfolio's effective tax burden.
A 3.3% withdrawal rate — well below the commonly cited 4% rule.
30-Year Portfolio Projection
At a flat 7% return, the portfolio grows because withdrawals are modest. In practice, sequence-of-returns risk (a bad first decade) can derail this trajectory even if the long-run average holds. This chart also excludes taxes, which add to the effective annual draw.
Year-by-Year Snapshot
| Year | Portfolio Balance | Net Draw (infl.-adj.) | Withdrawal Rate |
|---|---|---|---|
| Year 1 | $1.04M | $34,109 | 3.3% |
| Year 5 | $1.20M | $38,391 | 3.2% |
| Year 10 | $1.44M | $44,505 | 3.1% |
| Year 15 | $1.73M | $51,594 | 3.0% |
| Year 20 | $2.11M | $59,811 | 2.8% |
| Year 25 | $2.58M | $69,338 | 2.7% |
| Year 30 | $3.19M | $80,381 | 2.5% |
| Final (Yr 30) | $3.19M | ||
Key Takeaways
BLS expenses alone put the withdrawal rate at 3.3% — inside the "safe" zone. But once taxes are added ($2,000–8,000/yr depending on account type), the effective draw is higher.
At a static 7% return the portfolio grows in nominal terms. That 7% assumes an equity-heavy portfolio — a 60/40 allocation returns closer to 5.5–6%, which changes the picture meaningfully.
Social Security reduces portfolio pressure significantly, but timing matters. Delaying from 62 to 70 increases the benefit by up to 76%, which could eliminate most of the portfolio draw entirely.
Sequence-of-returns risk is the real threat here, not the average outcome. A bad first decade (2000–2010 style) can permanently impair a portfolio that looks fine on paper.
Healthcare inflation historically runs 5–7%/yr, not 3%. The $7,838 healthcare line in the BLS data will compound faster than the other categories over a 30-year retirement.
Double the spending — $112K/yr instead of $56K — and the portfolio depletes before year 17 under the exact same assumptions.
Run your own numbers
These are averages. Your SS benefit, actual expenses, and portfolio mix all differ. Beagle lets you model your specific situation with Monte Carlo, Roth conversions, and per-category returns.
A note on taxes: This analysis uses BLS spending figures, which do not include federal or state income taxes. Taxes in retirement depend on your account types (pre-tax 401k/IRA draws are fully taxable; Roth draws are tax-free), your state of residence, your Social Security benefit (up to 85% is taxable), and whether RMDs apply. Beagle's scenario planner models income taxes year by year — applying federal brackets, LTCG rates, per-state rates, RMDs, and Roth conversion tax impact — so your in-app projections include the tax drag that this simplified analysis leaves out.