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Retirement: What $250K vs. $500K vs. $1M vs. $2M in Savings Looks Like in Yearly Spending

October 11, 2025

3 min Read

Written by Andrew Lisa

Edited by Levi Leidy

A happy retired couple stands in their kitchen as the husband give his wife a kiss on the cheek.

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The popular 4% rule allows retirees to withdraw 4% of their nest egg in their first year of retirement, and then adjust for inflation each subsequent year to make their savings last for 30 years.

It’s important to note that this formula is a general guideline, not a defined strategy. It does not account for taxes, investment fees, market fluctuations, changes in spending, required minimum distributions (RMDs) or the potential for an extended lifespan.

However, the 4% rule can provide a helpful blueprint for gauging how long a nest egg is likely to last. The following analysis uses the 4% rule to estimate annual spending allowances with four common retirement savings goals — $250,000, $500,000, $1 million and $2 million — over 20-, 25- and 30-year spans, assuming a steady inflation rate of 2.9%, which is the current rate, according to the most recent data from the Consumer Price Index.

$250,000

Here’s what your annual spending would look like with a quarter-million-dollar nest egg.

20-Year Retirement

First year: $10,000
Year 10: $12,934
Final year: $17,214

25-Year Retirement

First year: $10,000
Year 10: $12,934
Final year: $19,860

30-Year Retirement

First year: $10,000
Year 10: $12,934
Final year: $22,911

$500,000

Those who save half a million dollars could live more comfortably.

20-Year Retirement

First year: $20,000
Year 10: $25,868
Final year: $34,429

25-Year Retirement

First year: $20,000
Year 10: $25,868
Final year: $39,719

30-Year Retirement

First year: $20,000
Year 10: $25,868
Final year: $45,822

$1 Million

A seven-figure nest egg buys you much more breathing room.

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20-Year Retirement

First year: $40,000
Year 10: $51,737
Final year: $68,858

25-Year Retirement

First year: $40,000
Year 10: $51,737
Final year: $79,438

30-Year Retirement

First year: $40,000
Year 10: $51,737
Final year: $91,645

$2 Million

Multimillionaires move to six-figure annual spending after a decade of retirement.

20-Year Retirement

First year: $80,000
Year 10: $103,474
Final year: $137,717

25-Year Retirement

First year: $80,000
Year 10: $103,474
Final year: $158,877

30-Year Retirement

First year: $80,000
Year 10: $103,474
Final year: $183,291

What If You Include Social Security?

Luckily, most retirees don’t have to rely only on their savings. According to the Social Security Administration, the average monthly Social Security benefit as of August is $1,955.48. That’s $23,465.76 per year.

Here’s how much each retiree could tack on to their yearly spending allotment from the previous calculations across all four savings categories, presuming an annual cost-of-living adjustment (COLA) of 2.5%, which was the adjustment in 2025 and roughly matches the historical average.