How Long Does $2.5 Million Last in Retirement?

If you have $2.5 million saved, you’re well ahead of most Americans.

But how long that money lasts may depend less on the balance itself—and more on the decisions you make with it.

Here’s a look at how long $2.5 million could potentially last under common models, and what risks and strategies may alter the outcome.

Wondering how long your savings might last? Speaking with a fiduciary financial advisor could be a good first step to answering that question and planning strategies that may help preserve your wealth and pass it on to the next generation.

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The Baseline: A 4% Withdrawal Rule

Many planners may use the 4% rule as a benchmark.

Under this model, you’d hypothetically withdraw about $100,000 in the first year (4% of $2.5 M), increasing slightly each year for inflation.

Here’s an example, if inflation is 2%, the next year’s withdrawal would be $102,000, then $104,040, and so on. These figures are purely hypothetical and actual inflation and withdrawals may vary.

If returns are average and inflation stays moderate, your savings could potentially last 30 years or more, enough to fund retirement into your 90s.

Social Security or a pension may also help further extend that timeline.

However, there may be potential downsides to the 4% rule, and it may not be the right strategy for your portfolio.

Some downsides may include:

• It’s based on outdated market assumptions from the 1990s.
• It doesn’t consider taxes
• It requires strict adherence. Fluctuating spending patterns could potentially impact effectiveness

A fiduciary financial advisor may be able to help you determine if the 4% rule makes sense for your drawdown plan and help you explore additional strategies.

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What Can Reduce That Timeline

If not properly planned for, the following may impact your savings longevity:

• Healthcare costs: Medicare helps, but the national annual median assisted living facility cost in 2024 was nearly $71,000, up 10% from 2023.¹ This cost may also vary by state.
• Inflation: When prices rise faster than your investments, each withdrawal could potentially buy less.
• Market volatility: Withdrawals made during market declines may lock in potential losses. Even if markets later recover, a smaller portfolio may have less capital to rebound, potentially shortening how long your savings might last
• Longevity: According to the Centers for Disease Control and Prevention (CDC), in 2023 the U.S. average remaining life expectancy at age 65 was 19.5 years across sexes.²
• Estate goals: Leaving a legacy or gifting wealth early may also shorten your portfolio’s lifespan if not planned tax-efficiently.

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What Can Help Make $2.5 Million Stretch Further

Strategic planning can help your wealth support both your lifestyle and long-term goals:

• Spend strategically: Consider starting with a conservative withdrawal rate; adjust upward only when returns allow.
• Diversify wisely: A mix of equities, fixed income, and cash buffers may reduce the need to sell during market dips.
• Plan for healthcare: Consider including rising medical and long-term care costs in your budget.
• Stay tax-efficient: Managing withdrawals from different account types may help minimize lifetime taxes.
• Revisit your plan annually: Life expectancy, market shifts, and tax laws may change, and your strategy may need to shift, as well.

These decisions will likely depend on your specific goals, family dynamics, and long-term strategy.

This could be why many investors may work with a fiduciary financial advisor or wealth manager to help personalize and continually update their broader wealth planning strategy.

Advisors may be able to help coordinate with estate attorneys, plan for tax efficiency, and ensure your plan supports your retirement, investment and legacy goals.

SmartAsset’s latest proprietary model reveals that working with a financial advisor could potentially add from 36% to 212% more dollar value to investors’ portfolios over a lifetime, depending on multiple unique, individual factors.³

If you’re concerned about how long your wealth will last, now may be the right time to speak with a fiduciary financial advisor.

That’s why we created a free tool to help match you with vetted financial advisors who serve your area, each legally bound to work in your best interest.

It's never too late to plan to work toward a comfortable retirement. Get your financial advisor matches today.

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This is a hypothetical example and is not representative of any specific security. Actual results when working with a financial advisor will vary.

This scenario is for illustrative purposes only and does not represent an actual client. Results may vary.

This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). Past performance is not a guarantee of future results. There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.

SmartAsset.com is not intended to provide legal advice, tax advice, accounting advice or financial advice (Other than referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States). The article and opinions in this publication are for general information only and are not intended to provide specific advice or recommendations for any individual. We suggest that you consult your accountant, tax, or legal advisor with regard to your individual situation.

SmartAsset Advisors, LLC ("SmartAsset"), a wholly owned subsidiary of Financial Insight Technology, is registered with the U.S. Securities and Exchange Commission as an investment adviser. SmartAsset’s services are limited to referring users to third party advisers registered or chartered as fiduciaries ("Adviser(s)") with a regulatory body in the United States that have elected to participate in our matching platform based on information gathered from users through our online questionnaire. SmartAsset receives compensation from Advisers for our services. SmartAsset does not review the ongoing performance of any Adviser, participate in the management of any user’s account by an Adviser or provide advice regarding specific investments.

We do not manage client funds or hold custody of assets, we help users connect with relevant financial advisors.

Sources:

1. “Calculate the cost of long-term care near you.” CareCost (2025)
2. “Mortality in the United States,” 2023 (CDC)
3. “The Value of a Financial Advisor: What’s It Really Worth?” SmartAsset (Nov. 2024)