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Many Americans believe they need to be millionaires to retire comfortably. By 2025, the “magic number” for retirement was $1.26 million, according to a survey of American adults by Northwestern Mutual (1).
But what if you’re nearing retirement with less than half the amount saved? Does a mere six-figure nest egg doom you for a stressful and anxious retirement? Not necessarily.
In fact, retirees can end up in many situations more Wealth later in retirement, even if they start with a relatively modest balance – depends on investment returns, spending patterns and longevity.
For example, someone with just $600,000 could potentially reach $1.5 million by the end of their retirement, assuming strong market returns and moderate withdrawals.
To understand why this is possible and how to do it, here’s a closer look at three important factors that will shape your life and personal finances after you leave work.
It’s easy to imagine retirement as a period of free splurges and expensive hobbies—after all, it’s the culmination of a lifetime of work. But in reality, most retirees reduce their spending over time.
Research published in 2025 by David Blanchett and Michael Finke Financial planning review A 65-year-old couple with retirement assets of $100,000 or more declines only 2.1% annually (2). For single retirees in the same category, the withdrawal rate is even lower at around 1.9%.
That’s much lower than the so-called 4% rule that many financial planners use as a starting point for retirement withdrawal strategies (3).
Beyond the numbers, though, it’s easy to see why spending may decline in retirement. After all, you no longer need to cover commuting costs, work clothes or daily office meals. You may also qualify for senior discounts on certain products and services, and once you turn 65, Medicare helps cover many — but not all — health care expenses.
Although retirement may come with fewer expenses, it’s important to remember that it also means the end of regular paychecks. Without that financial safety net, it’s especially important to keep a close eye on how much you’re getting back from your nest egg.
With Monarch Money, there’s an easy way to create a custom budget for you to track where your money is always going, whether you’re still saving for retirement or already dipping into it.
Monarch Money keeps all finances under one roof, from your banking statements to your investments. This way, you can track not only your expenses but also how your retirement savings are doing. You can also add separate or joint accounts to your dashboard, which can be great for couples looking to plan their retirement together.
The app is also well reviewed. Forbes rated Monarch Money as their best budgeting app for 2025, as did The Wall Street Journal.
Also, if you want to see if it’s right for you, Monarch Money offers a seven-day free trial to test the platform. If you like what you see, you can get 50% off your first year with the code WISE50.
Read more: Taxes are changing under Trump’s ‘big beautiful bill’ – 4 reasons retirees can’t afford to waste time
The main reason many retirees withdraw less from their nest egg in the first place is because they have a steady source of income from Social Security benefits.
Despite growing fears about its bankruptcy as of 2032 (4), Social Security is a nearly universal and relatively generous program. About 94% of workers are covered by Social Security, and as of January 2026, the average monthly benefit check is $2,071 (5).
That monthly check, it’s worth pointing out, makes up more than half (57%) of the average retiree’s income, while it’s the sole source of income for nearly a quarter (22%) of retirees, according to a 2026 study by Clever Real Estate (6).
It can make a big difference.
For example, a retired couple with $600,000 in combined savings would receive about $38,500 per year from Social Security – based on the estimated average monthly benefit ($3,208) for an elderly couple in January 2026 (7) – and would need to withdraw from their savings to cover any remaining expenses.
If their annual expenses are $60,000, for example, Social Security will cover about $38,500, leaving a gap of about $21,500 per year to withdraw from their portfolio. That’s a withdrawal rate of about 3.6% on $600,000 in savings.
Even if they return close to 4% annually, there is still a good chance that their portfolio will maintain stability or grow over time, depending on investment returns and market conditions.
Although the 4% rule is still the gold standard in the financial planning industry, it was developed in the 1990s and is based on historical market data from previous decades (8). In other words, it may not fully reflect today’s market environment.
In fact, its creator, William Benzen, has even recently suggested a higher sustainable withdrawal rate of around 4.7% under some circumstances.
Simply put, the traditional 4% rule may be too conservative. It is also reflected in the recent performance of the capital market.
As of April 9, 2026, the 20-year US Treasury bond yield is approximately 4.88% (9). Meanwhile, Vanguard’s S&P 500 ETF has returned an impressive 14.12% annualized over the past 10 years through March 31, 2026 (10).
In other words, stocks and bonds have recently outperformed the benchmark of 4% withdrawals. If you assume more moderate future returns, portfolios can still experience asset appreciation over the long term.
It also means that your nest egg can continue to grow during retirement.
Even if you’re no longer making large contributions, small, consistent investments — including putting away spare change from everyday purchases — can still add to your nest egg over time. For example, investing $30 each week for 20 years could grow your nest egg to $93,660, compounded at 10% annually (11).
So, if you’re looking to make small investments to add to your retirement savings, you might consider using platforms like Acorns, which give you a simple and automated way to turn your spare change from everyday purchases into investment opportunities.
Here’s how it works: Once you’ve linked all your cards, Acorns will automatically round up all expenses to the nearest dollar and invest in a diversified portfolio of ETFs managed by experts at major investment firms like Vanguard and BlackRock.
For example, when you buy your morning coffee for $4.25, Acorns deducts $5 from your account and invests the difference, making the purchase a 75-cent investment in your future.
If you sign up today with a monthly contribution, you can get a $20 bonus investment.
When you withdraw from your nest egg in retirement, a solid portfolio can still be compounded.
Let’s take an example. A retired couple has $600,000 in net personal wealth, 60% in stocks and 40% in bonds—the classic 60/40 split. They assume a 10% annual return on stocks and a 4% annual yield on bonds.
The expected annual return of this 60/40 portfolio is 7.6%. It is calculated using a weighted average:
If the pair withdraws 4% annually, the portfolio’s net growth rate will be approximately 3.6% per year. At that rate—assuming consistent returns and withdrawals—their $600,000 portfolio could potentially grow to about $1.45 million over 25 years, based on compound growth at 3.6%.
But reaching those kinds of returns often comes down to choosing the right mix of stocks and bonds—something many investors find challenging. That’s where platforms like Mobi can help.
Moby provides expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.
Over four years, and over nearly 400 stock picks, their recommendations beat the S&P 500 by about 12% on average. They also offer a 30-day money-back guarantee so you can make sure their stock picks match your appetite for risk.
Mobi’s team spends hundreds of hours sifting through financial news and data to deliver market reports delivered directly to you. Their research keeps you up-to-the-minute on stock shifts and can help you take the guesswork out of picking stocks and ETFs.
Plus, their reports are easy to understand for beginners, so you can become a smart investor in just five minutes.
At the same time, keeping costs down can make a big difference over time. A discount broker like SoFi, which offers no-commission trading, can save you thousands in fees in the long run.
Their easy-to-use DIY investment platform lets you buy stocks, ETFs and more with no commission fees and no account minimums.
SoFi is designed for both beginners and experienced investors, with real-time investment news, curated content and the data you need to make smart decisions about the stocks that matter most.
Plus, for a limited time, you can get up to $1,000 in stock when you fund a new account.
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Northwestern Mutual (1), (3); Wiley Online Library (2); Congressional Budget Office (4); Social Security Administration (5), (7); Clever Real Estate (6); US News & World Report (8); US Treasury Department (9); Vanguard (10); Acorns (11)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
