Q:

Is two million dollars enough to retire on?

A:

Quick Answer

For most people, two million dollars in savings is more than enough to guarantee a comfortable retirement. The majority of people are able to retire after having saved eight times their ending salaries, according to Fidelity.

Know More

Full Answer

Every retirement situation is unique. While some retirees prefer a quiet life in a small town, others wish to travel the world and enjoy a pampered life of luxury. Saving enough for more ambitious goals is possible with careful planning and financial discipline. While two million dollars seems like a lot of money to save, compound interest and time both make it a more achievable goal. The earlier retirement savings begin, the less money needs to be set aside each year to meet ambitious goals.

To ensure two million dollars lasts through a healthy retirement, savings must be diversified and optimized for growth. Ideally, withdrawals come from the annual growth of investments and not the principal balance. This helps ensure a retirement account survives regardless of the longevity of an individual. Saving two million dollars for retirement ensures the returns on the investments keep the income coming for as long as the retiree is alive while saving the lump sum to cover end-of-life medical expenses and still leave plenty of money to family or charity.

Learn more about Financial Planning
Sources:

Related Questions

  • Q:

    What is a thrift savings plan or TSP?

    A:

    A thrift savings plan, or TSP, is a retirement savings plan established in 1986 for federal civil service employees, according to Investopedia. The Federal Employee's Retirement System Act of 1986 established this defined-contribution plan to allow federal employees the same sort of savings potential that private sector employees have through 401(k) plans.

    Full Answer >
    Filed Under:
  • Q:

    What are some tips through MassMutual RetireSmart?

    A:

    MassMutual RetireSMART offers a variety of tips and resources for financial planning, including tips on investments, college planning, family planning, retirement savings and building finances, as described on the official RetireSMART website. Resources include videos, seminars, articles, games and financial calculators.

    Full Answer >
    Filed Under:
  • Q:

    What is a 457 retirement plan?

    A:

    A 457 retirement plan is a retirement savings account offered to government employees and some employees of nonprofit organizations, states CNN Money. Advantages over other retirement plans include no penalties for early withdrawals and enhanced catch-up contribution options, reports Kiplinger.

    Full Answer >
    Filed Under:
  • Q:

    What goes in a revocable trust?

    A:

    Personal assets that can go into a revocable living trust include checking and savings accounts, brokerage accounts not for retirement, stocks and bonds, real estate, small business holdings, patents, copyrights, and rights to natural resources, reports About.com. Retirement accounts and medical savings accounts should not go into the trust.

    Full Answer >
    Filed Under:

Explore