What it Really Takes to Retire with $2 Million

Greetings! 

This week, I ran some numbers on what it really takes to retire with $2 million—and whether you can safely pull 6% a year without running out of money. Here’s what I found: 

1. Retiring in the Worst-Case Scenario 

Just to emphasize my point, I ran a scenario where I retired in the year 2000, right before three straight down years in the market. I assumed the following:

• A 6% annual withdrawal rate An additional 2.5% adjustment for inflation

• A 7% real return on the total stock market

• Even after pulling 6% for 25 years and adjusting for cost of living, I still had just under $1 million left at the beginning of 2025. 

2. The Real Risk Isn’t the Percentage—It’s the Amount 

People obsess over whether the 4% rule, 6% rule, or some other formula is “safe.” But here’s the problem: Regardless of what % you use, odds are, as should be clear enough from my ONE worst-case trial above, you would most likely NOT “run out of money”. 

But in the scenario above, by 2010, I found my fictional self living not on the original 6% (adjusted for inflation), but on HALF of that. So, yes, it was still technically 6%, and no, I wasn’t running of money, but YES, my annual purchasing power would have been considerably reduced. Instead of chasing some magic percentage, you should be quantifying what you actually need each year. e.g., “I need $100,000/year (readjusted annually for inflation), regardless of what % of my portfolio it represents.” 

3. Forget the Percentages—Know Your Number 

Retirement isn’t about hitting a percentage—it’s about knowing your spending needs and making sure your portfolio supports them. If you’re just following a formula without crunching real numbers, you’re flying blind. 

Bottom line: Don’t rely on inherited rules and assumptions. Always run your own numbers. 

Hope this proves somewhat thought-provoking, 

Tyler