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If you’re strategizing about how to spend your $1 million nest egg when you end your career at 50, congratulations. You’ve reached two goals that many set but few achieve: Early retirement and seven-figure savings. 

A million bucks is a lot of money, but you’ll need it to last for a long, long time — and it just might, depending on how you manage it.

$1 Million Means Different Things to Different People in Different Places

The following factors will play a big role in determining how long a 50-year-old retiree can stretch $1 million.

Social Security: Retiring at 50 will deprive you of at least 12 years’ worth of Social Security contributions. Additionally, if money gets tight and you have to claim benefits when you become eligible at 62, the Social Security Administration cautions that you’ll forfeit 30% of your monthly check. Those who can hold out until 70 will get 24% more.
Location: According to Forbes, average living expenses in states like Mississippi and Arkansas are less than $2,700 per month. In places like Hawaii, the median monthly mortgage payment alone exceeds $5,000.
Lifestyle: Same as during your working years, the more of your money you spend, the less of it you’ll have.
Taxes: Forbes reports that in Massachusetts, New York and Hawaii, average annual income taxes are more than $7,000. Other states levy no income tax at all.
Investment returns: With modest withdrawals and high returns, $1 million can last for decades since gains offset expenditures. The timeline narrows substantially if that formula reverses. 

Early 60s or Late 80s? Your Spending and Gains Will Make That Decision

The following calculations outline how long $1 million will last a 50-year-old retiree in different financial circumstances. Each scenario presumes annual withdrawal increases of 2.4% to match the current inflation rate, a 22% federal tax rate, and omits Social Security and state taxes.

With the right formula, a $1 million nest egg could outlive most 50-year-old retirees.

Annual rate of return before taxes: 6%
Monthly withdrawals: $7,000
Your money will last: 14 years (64 years old)
Annual rate of return before taxes: 10%
Monthly withdrawals: $7,000
Your money will last: 19 years (69 years old)
Annual rate of return before taxes: 6%
Monthly withdrawals: $5,000
Your money will last: 21 years (71 years old)
Annual rate of return before taxes: 10%
Monthly withdrawals: $5,000
Your money will last: More than 30 years (80+)
Annual rate of return before taxes: 6%
Monthly withdrawals: $3,000
Your money will last: More than 30 years (80+)
Annual rate of return before taxes: 10%
Monthly withdrawals: $3,000
Your money will last: More than 30 years (80+)