Can I Retire With $1.5 Million? What It Pays and What It Costs in Taxes

At $1.5 million, running out of money is rarely the problem. Paying more tax than you need to is.

The short answer

For most people, yes. $1.5 million pays about $49,500–$60,000 a year before taxes, on top of Social Security. The planning question shifts from "will it last?" to "how much will the IRS take?"

The paycheck

Using the 3.3%–4% range, $1.5 million produces $49,500 to $60,000 in the first year, about $4,125 to $5,000 a month.

Add the average couple's 2027 Social Security of about $40,260 a year and you're near $100,260 before taxes. That's a comfortable retirement in most of New Jersey.

The tax problem nobody shows you

If most of it sits in a traditional IRA or 401(k), every dollar out is taxable income. At 73, the IRS forces withdrawals whether you need them or not. On $1.5 million, the first required withdrawal is about $56,604, and the balance may well be bigger by then.

Stack that on Social Security and a pension, and you can cross the Medicare surcharge line (in 2026, IRMAA starts when a couple's income from two years earlier tops $218,000) or lose New Jersey's pension exclusion, which disappears completely above $150,000 of income.

The window to fix it

The years between retiring and 73 are usually your lowest-tax years. That's when partial Roth conversions or planned IRA withdrawals can shrink future RMDs.

Done carelessly, conversions can trigger the same surcharges you're trying to avoid. It's a few-years plan, not a one-time move.

Try it with $1.5 million

We filled in $1.5 million and an average couple's 2027 Social Security. Change anything to match your life.

Your result

Your savings run short at age 92.

Most you could spend each year to age 95: $94,100; in today's dollars, about $7,842/month
First-year withdrawal rate: 7.4%; Above the 3.3%–4% range most research calls sustainable.

Savings shown in today's dollars. This uses steady average returns, which real markets never deliver, so treat it as a starting point, not a promise. Before Social Security starts, your savings cover all of your spending.

Quick answers

Can I retire at 60 with $1.5 million?

Many people can. Budget for health insurance until Medicare at 65, and keep your income in mind if you're buying marketplace coverage. The calculator above shows how retiring earlier changes the picture.

How much can I spend with $1.5 million?

A first-year withdrawal of 3.3%–4% is $49,500–$60,000. Add Social Security and subtract taxes for your real number.

What is the RMD on $1.5 million?

At age 73 the IRS divisor is 26.5, so about $56,604 in the first year. Try the RMD calculator to see the next 10 years.

What to do with your number

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Withdrawals, taxes, Social Security and Medicare for 2027, explained in plain English.

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Social Security figures: SSA 2027 COLA fact sheet (average benefits after the 3.6% COLA), checked October 26, 2026. Withdrawal ranges and RMD figures are illustrations. General education, not individual advice.