People Say $10 Million Is Enough to Retire Early, but I Strongly Disagree

Is a $10 million net worth the right amount for you to retire? A post in the Fat FIRE subreddit generated a lot of engagement. The Redditor mentions a Financial Samurai blog post that claims $10 million is the ideal amount for retirement.

While most people would argue that $10 million is sufficient, it’s good to dive into whether it’s possible to retire and live comfortably with under $10 million. I will share my thoughts, but it is good to speak with a financial advisor if you can.

Location and Lifestyle Matter

Money gives you more mileage depending on where you live, and your location can shape your thoughts on how much money you need to retire. Sam Dogen, the man behind Financial Samurai, lives in San Francisco. That’s one of the most expensive cities in the world, so it makes sense that Dogen has a higher net worth goal than most people.

Someone who is living in a LCOL rural area doesn’t need $10 million to retire. It’s possible to retire on $1 million or $2 million if you live in the right area and are old enough. However, for those aiming for a high-end lifestyle, “lifestyle creep” in luxury goods and private healthcare often outpaces standard inflation, justifying why some feel $10 million is the new $5 million.

Continuing to Work After a $10 Million Net Worth

While a $10 million net worth can result in most people retiring, some people continue to work after reaching this figure due to “One More Year Syndrome.” This psychological barrier isn’t about the math but rather the fear of losing a professional identity or the safety of a steady paycheck.

The Redditor has a net worth of $12 million. That includes $10 million in stocks and ETFs, along with $2 million in home equity. However, the individual has not retired yet due to a low-stress job that provides a steady income.

How Much Do You Need at Retirement?

A good way to determine how much you need to retire is to calculate your monthly expenses and use the 4% withdrawal rule. Alternatively, high-net-worth individuals often pivot to a “Yield Shield” strategy, using dividend growth or options income to cover expenses without ever touching the principal.

Here’s how it works in practice. Assume someone spends $10k/mo and wants to know how much they need to retire. $10k/mo in expenses translates into $120k/yr. If you use the 4% withdrawal rule, you will need a $3 million portfolio to retire.

Retirees who want to be more defensive may want to make an annual 3% withdrawal. Furthermore, the SECURE 2.0 Act has pushed back Required Minimum Distributions (RMDs) to age 73, allowing large portfolios more time to grow tax-deferred. This demonstrates that while not everyone needs $10 million, modern legislative and strategic shifts make that capital even more potent for long-term growth.

Older people can retire with lower net worths since they don’t need their money to last as long. Some high-net-worth individuals aim to retire in their 30s and 40s. That goal requires a much larger net worth since the money has to last longer, and it’s likely that products and services continue to get more expensive.

While the majority of people can retire comfortably with $10 million, it’s important to know personal factors like your expenses and location to gauge how much you really need.

Editor’s Note: This article has been updated to include contemporary financial perspectives, such as the psychological impact of “One More Year Syndrome” and the legislative shifts introduced by the SECURE 2.0 Act. We have also added technical insights regarding “Yield Shield” strategies and the specific impact of luxury-sector inflation on high-net-worth retirement planning to provide a more comprehensive view of the $10 million retirement debate.