If you’ve seen headlines lately, you might think you need a whopping $5 million to retire comfortably in 2025. It’s a number that grabs attention and sparks a lot of anxiety.
But do you really need $5 million to retire? For most people, the answer is no.
Sure, having $5 million can make retirement easier, especially if you want a high-spending lifestyle, to retire early, or leave a legacy for your kids. But in 2025, with higher yields on cash, flexible work opportunities, and smarter spending, you can retire well with far less.
What you actually need depends on you
Instead of chasing $5 million, look at:
- How much you plan to spend each year
- Where you’ll live in retirement
- Your healthcare needs and insurance costs
- Your Social Security and other income streams
If you plan to live modestly in a paid-off home, spend time with family, and travel occasionally, you can often retire comfortably with far less than $5 million.
Higher yields are helping in 2025
One thing helping retirees in 2025: higher yields on high-yield savings accounts and CDs. Some are paying APYs of 4.00% to 5.00%.
That means your cash reserves aren’t just sitting idle — they’re earning meaningful interest, which can reduce how much you need to pull from your investments, especially during market downturns.
If you’re tired of earning next to nothing on your savings, check out our best high-yield savings accounts to start earning up to 10 times the national average on your cash.
Withdrawal strategy matters
Even if you had $5 million, you’d still need a withdrawal plan to make your money last.
Consider:
- A safe withdrawal rate around 3% to 4%
- Using a bucket strategy with cash, bonds, and stocks
- Staying flexible with spending, especially in market downturns
If you think you could use some help getting your retirement organized, this no-cost quiz from our partner, SmartAsset, makes it easier to find a fiduciary financial advisor.
Do you really need $5 million?
You might, if you plan to retire early, travel constantly, and spend freely without worrying about market drops.
But most retirees in 2025 don’t need $5 million to retire well. What matters more is:
- Knowing your annual spending needs
- Factoring in healthcare and inflation
- Using Social Security and other income wisely
- Staying flexible and adjusting as needed
What you should do now
Instead of stressing over a huge number, start by:
- Tracking your current spending
- Checking your Social Security estimate
- Reviewing your cash yields and investment strategy
- Running a retirement budget to see what you truly need
Retirement in 2025 isn’t about hitting $5 million just because it’s trending. It’s about knowing what you need to live the life you want — comfortably, confidently, and without unnecessary stress.
