Is $1 million enough to retire in 2026?

$1M funds $39,000 to $47,000 a year depending on whose rate you use — before tax and health care. Here is what is actually left to spend.

Every article on this question gives you a withdrawal number and stops. That is the easy half, and it is the half that does not decide anything.

What decides it is what is left after the IRS and the health-insurance company have been paid. Nobody shows you that, so this page does.

This spoke sits under the Retirement hub.

What $1 million actually pays in year one

There is no single answer, and the reason is not vagueness — it is a genuine, live disagreement between two credible sources.

• Morningstar puts the safe starting rate at 3.9%. On $1,000,000 that is $39,000. It is a forward-looking figure: a 30-year horizon, a 90% success target, and a 30-50% equity portfolio, given today's valuations and yields.
• Bengen, who invented the 4% rule, has revised his own historical worst case up to 4.7%. On $1,000,000 that is $47,000. It is the rate that would have survived the single worst 30-year period in the US record, on a more diversified portfolio.

They are not the ends of a confidence interval. They are answers to two different questions, and averaging them produces an answer to neither. The 4% rule in 2026 sets out exactly how the two methods differ.

For everything below, the example household is a single 67-year-old with $1,000,000, all of it in a traditional IRA, claiming the average Social Security benefit of $2,071 a month. It is an illustration, not a recommendation.

What is left after tax and health care

This is the table nobody publishes.

Roughly 11% of the money disappears before it becomes spending. That is the number that should change your plan, and it is not in anyone else's headline.

How the tax line was computed, so you can check it. Part of the Social Security benefit becomes taxable once combined income crosses $25,000 for a single filer — a threshold that has never been indexed and was not changed by the 2025 tax law. Against that we apply the $16,100 standard deduction plus the $6,000 senior deduction for being 65 or over. What remains lands in the 10% and 12% brackets.

Four caveats, all of which matter:

• Federal only. State income tax is on top. Some states exempt Social Security and some tax IRA withdrawals in full.
• All pre-tax. If part of the $1M is Roth or in a taxable brokerage account, the tax line falls sharply — possibly to near zero. Account mix is worth as much here as balance.
• The senior deduction expires. It is scheduled to end after 2028. "No tax on Social Security" was never true; a deduction is not an exemption, and the benefit-taxation thresholds are untouched.
• The Medicare line is a floor, not a budget. It is the Part B premium ($202.90 a month) and the Part B deductible ($283). It contains no Part D premium, no Medigap, no dental, vision or hearing, and no actual medical care.

Is it enough? The one-line test

$1 million is enough if your annual spending gap — what you spend, minus Social Security and any pension — comes in under $39,000 to $47,000, in pre-tax terms.

Spend $70,000 a year with average Social Security, and your gap is about $45,000. That fits inside Bengen's number and not inside Morningstar's. You are exactly on the seam, which means the honest answer to "is $1M enough" for that household is it depends on which methodology is right, and nobody knows. Work the general model on how much is enough, or run your own figures through the checkup.

How long does $1 million last?

Strip out every forecast. Assume markets exactly keep pace with inflation and do nothing more — a zero real return. Then the arithmetic is pure division:

This is the floor, and it is worth sitting with, because it shows what the whole safe-withdrawal literature is really arguing about. Morningstar's 25.6× multiple is 25.6× years at zero real return. Bengen's 21.3× multiple is 21.3× years. Everything past 30 years has to be produced by investment returns — which is precisely the part that a bad first decade takes away from you.

That is sequence of returns risk, and it is the real threat to a $1M retirement. Not the size of the number. The order of the returns. Stress-test it.

Retiring before 65 changes the answer

Two things get worse at once, and they compound.

The horizon lengthens, which lowers the sustainable rate — both published figures assume 30 years, and a retirement starting at 60 is not a 30-year problem.

And health insurance becomes a line item. The 2026 national-average unsubsidized premium for a 60-year-old is about $11,625 a year for the lowest-cost bronze plan and $15,914 for the benchmark silver plan. Premium tax credits cut that, but the enhanced subsidies expired at the end of 2025 and the 400%-of-poverty cliff is back: for a single person it sits at $62,600 of MAGI, and one dollar over it forfeits the entire credit.

Here is the part that catches $1M retirees specifically. Drawing $39,000 to $47,000 from a portfolio, with no Social Security yet, puts your MAGI comfortably below that cliff — you probably qualify for a credit. Then you do a Roth conversion, or realise a capital gain, or take one extra distribution, and the credit vanishes in full. The withdrawal decision and the insurance decision are the same decision. Model it in the ACA bridge tool and read health care before Medicare.

There is a floor as well as a cliff. Push MAGI below 100% of the poverty line — $15,650 for one person — and you generally get no marketplace subsidy at all. It is possible to duck the cliff and land in the ditch.

What part-time work is really worth

You will see this claim everywhere, including in an earlier version of this page: earning $15,000 part-time is "worth $375,000 in portfolio terms", because 25 × $15,000 = $375,000.

That is wrong, and it is worth being precise about why.

A portfolio funds spending indefinitely. A part-time job funds it until you stop, and you will stop. Five years of $15,000 earnings means $75,000 of withdrawals you did not have to take — not $375,000 of capital you no longer need. Capitalising temporary income at a perpetual multiple overstates the lever by a factor of five or more, and it is the kind of arithmetic that talks someone into retiring two years early.

The directional point survives, and it is a real one: earned income reduces the portfolio you have to draw on. But its true value is about when, not how much. Those first five years are exactly where sequence risk lives, and every dollar you do not sell in a down market is a dollar left to recover. That is a genuine and underrated benefit. It is just not a $375,000 one.

One trap: if you claim Social Security before your full retirement age of 67, the earnings test withholds $1 of benefit for every $2 you earn above $24,480. Only earned income counts — portfolio withdrawals, pensions and capital gains do not. See part-time work in retirement.

Key takeaways

• $1 million supports $39,000 (Morningstar) or $47,000 (Bengen) in year one. Two methods, two questions — not a range to average.
• After federal tax and the Medicare floor, a single 67-year-old with average Social Security keeps roughly $57,000 to $63,900 of it. Roughly 11% never becomes spending.
• The test is whether your annual spending gap fits under those withdrawal figures. Your spending, not the round number, decides.
• At zero real return $1M lasts 25 years at $40,000 a year. Everything past that is investment return — which is what a bad first decade takes from you.
• Part-time income is a bridge, not capital. $15,000 a year for five years is $75,000 of withdrawals avoided, not $375,000 of portfolio.

Next: find your own target on how much is enough, or understand the rate itself on the 4% rule in 2026.

Educational only — not financial or tax advice.