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

Is a $10 million net worth the right target for retirement? A post in the Fat FIRE subreddit generated significant engagement around exactly that question. The Redditor references a Financial Samurai blog post by Sam Dogen, who argues that $10 million is the ideal net worth for retirement.

That figure sounds enormous to most Americans, and yet the Fat FIRE community debates it regularly. Whether it is sufficient depends almost entirely on personal circumstances. Speaking with a financial advisor is always a wise first step before drawing any conclusions for yourself.

Location and Lifestyle Matter

A dollar stretches very differently depending on where you live, and geography does a great deal to shape how much you actually need to retire. Sam Dogen, the creator of Financial Samurai, lives in San Francisco, one of the most expensive cities in the world. That context explains why his retirement target sits higher than what most people would require. He estimates that $10 million invested in income-producing assets can generate roughly $350,000 to $500,000 per year in low-risk income, a figure that makes sense for a high-cost city but far exceeds what most households need.

Someone living in a low-cost-of-living rural area faces a very different calculation. Retiring on $1 million or $2 million is genuinely achievable in the right location, particularly for someone who has reached traditional retirement age and does not need the money to last 40 or 50 years. For those chasing a high-end lifestyle, however, spending on luxury goods and private healthcare tends to grow faster than general inflation, which is part of why some in the Fat FIRE community argue that $10 million is the new $5 million.

Continuing to Work After a $10 Million Net Worth

Crossing the $10 million threshold does not automatically mean someone will retire. Many people continue working well past that point, a pattern sometimes called “One More Year Syndrome.” The psychological pull to keep earning is rarely about the math. It is usually rooted in a fear of losing a professional identity or the comfort of a predictable paycheck, not an actual financial need.

The Redditor whose post sparked the discussion holds a net worth of $12 million, made up of $10 million in stocks and ETFs and $2 million in home equity. Despite sitting well above any conventional retirement threshold, this person has stayed in the workforce because the job is low-stress and provides steady income. That choice illustrates how personal fulfillment and financial inertia often override a purely numerical decision to retire.

How Much Do You Need at Retirement?

The most practical starting point is calculating monthly expenses and applying the 4% withdrawal rule. The rule states that a retiree can withdraw 4% of their portfolio annually with a reasonable expectation that the money will last 30 years. Someone spending $10,000 per month runs $120,000 in annual expenses, which implies a required portfolio of $3 million at a 4% withdrawal rate.

Those who want more breathing room can apply a 3% withdrawal rate instead, which pushes the required portfolio to $4 million for the same $120,000 in annual spending. Neither figure is anywhere close to $10 million for a household with typical expenses, which shows just how location- and lifestyle-specific any retirement number really is. High-net-worth individuals sometimes pursue a “Yield Shield” approach, building a portfolio heavy in dividend-growth stocks or options income so that living expenses are covered without ever touching principal.

The SECURE 2.0 Act has also given large tax-deferred portfolios more room to grow. Required Minimum Distributions now begin at age 73, up from 72 under the original SECURE Act, and are scheduled to rise again to age 75 starting in 2033 for those born in 1960 or later. That extended tax-deferral window allows a substantial portfolio to compound longer before mandatory withdrawals begin, a meaningful advantage for early retirees who stop working in their 40s or 50s.

Age at retirement matters enormously in this calculation. Someone in their 60s needs a smaller cushion because the money has fewer decades to outlast. Someone aiming to retire in their 30s or 40s faces a 50-year or longer horizon, where compounding inflation and rising healthcare costs weigh far more heavily. For that group, a higher portfolio target is not an indulgence; it is a practical necessity.

The bottom line is that $10 million comfortably covers retirement for most people in most scenarios, but it is neither a universal floor nor a universal ceiling. Personal expenses, location, age, and risk tolerance all matter far more than any single target number.

Editor’s note: This update adds Financial Samurai’s estimated annual income range of $350,000 to $500,000 from a $10 million invested portfolio, and expands the SECURE 2.0 RMD discussion to reflect the law’s scheduled increase of the RMD start age to 75 for those born in 1960 or later, effective 2033.