For decades, the goal was obvious: save, invest, and watch your accounts grow. Then one day you look at your statement and see a balance near $2 million. It’s a real accomplishment, and it can feel like the finish line.
It isn’t. A large balance tells you how well you saved. It doesn’t tell you how well that money will hold up once you start living on it.
Saving and spending are two different jobs
While you were working, your paycheck covered your bills, and your portfolio had one job: grow. Market drops were uncomfortable, but you had time to wait them out and kept adding money along the way.
Retirement turns that around. The portfolio now has to replace your paycheck, every month, for as long as you live, no matter what the markets are doing. A strategy built for growth is not automatically built for steady income. Many people hit $2 million and don’t think to change the approach that got them there, without asking whether it fits their next chapter.
What $2 million actually pays you
A common rule of thumb says you can withdraw about 4% a year. On $2 million, that’s roughly $80,000 a year, before taxes.
That’s a good income. But for a household used to a higher salary, with travel plans, helping children or grandchildren, and a home to maintain, $80,000 before taxes may not cover the retirement they pictured. The question isn’t “Is $2 million a lot?” It’s “Does $2 million produce the income my life requires?”
Taxes: not all of that money is yours
For many affluent retirees, most of their savings sit in traditional IRAs and 401(k)s. Every dollar you withdraw is taxed as ordinary income. A $2 million IRA might be worth noticeably less after taxes, depending on your bracket and when you withdraw the money.
Required Minimum Distributions add another layer. Once they begin, the IRS decides the minimum you must withdraw each year, whether you need it or not. Those forced withdrawals can push you into a higher bracket and raise your Medicare premium. In 2026, higher Medicare premiums (called IRMAA) begin at $109,000 of income for individuals and $218,000 for couples filing jointly, and those premiums are based on your income from two years earlier. Without a plan, it’s easy to cross that line without realizing it.
Market risk doesn’t retire when you do
Markets will fall again; that much is certain. What’s uncertain is when. During your working years, a downturn was mostly a paper loss. In retirement, you may be forced to sell investments while they’re down just to pay your bills, locking in losses you can never recover.
Sequence of returns: the timing of bad years matters
Consider two hypothetical retirees. Each starts with $2 million, withdraws $100,000 a year, and earns the same returns over ten years, averaging 6.5%. The only difference is the order.
- Retiree A has the two bad years first (–18% and –12%), followed by good ones. After ten years, they have about $1.68 million.
- Retiree B gets the same returns in reverse, with the bad years at the end. After ten years, they have about $2.43 million.
Same returns. Same withdrawals. A difference of roughly $750,000, purely because of timing. This is sequence-of-returns risk, and the years right before and after retirement do the most damage. You can’t control the order of returns, but you can structure your income so a bad early stretch doesn’t force you to sell at the worst time.
Longevity: plan for a long life
Many people plan for retirement to last into their mid-80s. The odds suggest planning for longer. According to Social Security, about a quarter of today’s 65-year-olds will live past 90, and 10% will live past 95. For couples, the odds rise further: the Society of Actuaries estimates a 51.8% chance that at least one spouse will reach age 90.
That means your money may need to last 30 years or more, through several market cycles and decades of rising prices.
Healthcare: the expense people underestimate
Healthcare is one of the highest costs in retirement. Fidelity estimates that a 65-year-old retiring in 2026 can expect to spend an average of $185,500 on health care and medical expenses throughout retirement, and that figure is for one person. Its research also found that 54% of pre-retirees wrongly believe Medicare will cover all of their health care costs. It won’t. Premiums, deductibles, prescriptions, and other out-of-pocket costs add up, and that’s before any long-term care.
Withdrawal strategy: which dollars, when, and from where
Two retirees with the same balance can have very different outcomes based on how they draw it down. Which accounts do you tap first: taxable, tax-deferred, or Roth? When do you claim Social Security? How much of your income should come from sources that don’t depend on the market? Should you convert or reposition some money before RMDs begin?
None of these questions has a one-size-fits-all answer, but each affects how long your money lasts and how much you keep.
From a number to a paycheck
Reaching $2 million proves you did the hard part. Turning it into a dependable retirement paycheck is a different job, and it calls for a different plan: one that accounts for taxes, protects your income from bear markets, prepares for a long life and rising healthcare costs, and draws down your savings in a deliberate order.
So the question isn’t whether you have enough. It’s whether what you have is set up to support the retirement you want.
If you’re not sure, that’s worth finding out now, while you still have time to make changes. Our team at RGA is happy to sit down with you, review how your portfolio is structured, and help you see whether it’s built to deliver the income, protection, and peace of mind you’re counting on.
The sequence-of-returns example is hypothetical and for illustration only. It does not represent a specific investment and is not a guarantee of future results.
