A million dollars sounds like a lot of money and is often used as a mythical retirement goal. Here in Iowa and across the Midwest, it carries a certain weight. But when it comes to retirement planning, the real question isn't whether a million dollars sounds like enough. It's whether the math actually works for your life.
Where Do Most People Actually Stand?
Before we can answer whether $1 million is enough, it helps to get a realistic picture of where most Americans are when they reach retirement age. Spoiler: the numbers might surprise you.
The average retirement savings for households between ages 65 and 74 sits around $609,230, according to the Federal Reserve Survey of Consumer Finances. But averages can be misleading, pulled upward by a relatively small number of very wealthy households. The median, which reflects what a more typical family has actually saved, is closer to $200,000 for that same age group, according to NerdWallet's analysis of Federal Reserve data.1
Here's where it gets interesting. Despite those real-world balances, Americans believe they need almost $1.5 million saved to retire comfortably in 2026, according to Kiplinger.2 That's a significant gap between perception and reality, and it's where unnecessary anxiety takes root. The families we work with who feel most confident about retirement aren't always the ones with the largest portfolios. They're the ones who understand their situation, have developed a strategy and understand their unique needs.
Are You Asking the Right Questions?
Most people frame retirement planning as a savings problem. Get to a certain number and you're done. But that framing is part of what makes retirement feel so out of reach for so many families.
A better question is this: how much income do I actually need each month to live the life I want? Once you start there, the math becomes more manageable.
According to the Bureau of Labor Statistics, the average household led by someone 65 or older spent about $61,000 in 2024.3 That's a national benchmark, though many Midwest families spend meaningfully less, and we'll get to why that matters shortly. Take that annual spending need, subtract any guaranteed income you'll receive, and what's left is the gap your savings actually need to fill. For most people, that gap is significantly smaller than they realize.
How Far Does Social Security Actually Go?
This is one of the most underestimated parts of the retirement income picture. Social Security isn't a small supplement. For many Midwest families, it can cover a substantial portion of what they need.
The average monthly Social Security check for a retired worker reached $2,079 in early 2026, according to the Social Security Administration.For a married couple where both spouses receive benefits, that combined figure reaches roughly $3,200 per month, or about $38,500 per year.4 In our $60,000 spending example, that's nearly two-thirds of the income need covered before your portfolio contributes a single dollar.
The remaining gap of roughly $21,500 per year is what your savings needs to generate. Using the 4% rule, a widely used guideline suggesting you can withdraw 4% of your portfolio annually with a strong historical likelihood of not outliving your money, that works out to needing approximately $537,500 saved. Not $1.5 million. For many Midwest couples with solid habits and a thoughtful Social Security strategy, that number is within reach.
What Does the 4% Rule Actually Mean?
Since we're talking about it, it's worth explaining what the 4% rule actually is and what it isn't.
Many people assume it means your money runs out in 25 years. That's not the intent. The 4% guideline is designed to make your money last approximately 30 years in retirement, based on historical market performance. In strong years, your portfolio may actually grow despite withdrawals. In weaker years, you draw down some principal. Over a long retirement the historical data has consistently supported this approach for most retirees.5
That said, it's a guideline, not a guarantee. How it applies to you depends on your spending flexibility, your investment mix, your health, and a handful of other factors we'd want to talk through together.
Does Living in the Midwest Actually Help?
More than most people give it credit for. Homes are generally more affordable in the Midwest than in the Northeast or on the West Coast, and lower housing costs tend to bring down overall living expenses across the board, from taxes to food to daily life.6
For families who own their home outright by the time they retire, the impact on monthly income needs is significant. A couple without a mortgage payment may live very comfortably on $50,000 to $55,000 per year rather than $65,000 or more. Run that difference through the 4% formula and the required portfolio shrinks by $250,000 or more. That's not a small amount.
Debt works against you in the same way. Every monthly obligation you carry into retirement, whether it's a car payment, a credit card balance, or a home equity line, is income your savings has to cover before it gets to support the life you actually want. Families who enter retirement with limited debt have considerably more breathing room than those who don’t.
What About Taxes?
For Iowa residents, this is one of the most underappreciated advantages in the region. Iowa exempts all Social Security benefits from state income taxes, and residents age 55 and older pay no state taxes on retirement income from 401(k)s, IRAs, pensions, or annuities. The state also moved to a flat income tax rate of 3.9% for 2026 and eliminated its inheritance tax for tax years 2025 and later.
The practical effect is real. A couple withdrawing $40,000 from their IRA each year pays zero Iowa state income tax on that income. Over a 25-year retirement, that adds up to meaningful dollars staying in your pocket rather than going to Des Moines.
The picture looks a little different for neighbors across the border. Wisconsin taxes most retirement income, though Social Security is exempt, and taxpayers 65 and older won't pay tax on income from federal or state retirement plans. Minnesota taxes retirement income more broadly, which is worth factoring in for families near the state line who have some flexibility about where they land in retirement.
When Should You Claim Social Security?
Timing your Social Security claim is one of the highest-impact decisions you will make for your retirement, and it has nothing to do with your investment portfolio. Claiming at 62 versus waiting until 70 can increase your monthly benefit significantly. For a married couple where both spouses qualify for the maximum benefit and delay claiming until age 70, combined benefits could reach $10,362 per month in 2026. Most families won't approach that ceiling, but the underlying principle holds across the board. Waiting pays off significantly for those who can afford to do so.
For the higher-earning spouse, delaying also increases the survivor benefit, which matters a great deal if one partner lives considerably longer than the other. The right answer depends on your health, your other income sources, and your overall plan. It's a conversation worth having before you're ready to retire.
What About Healthcare?
Healthcare is the retirement expense that carries the most uncertainty and the most potential to disrupt an otherwise solid plan. Medicare starts at 65, but it isn't free, and it isn't complete coverage. Premiums, deductibles, supplemental coverage, and out-of-pocket costs all need their own place in your budget.
For families still working with access to a Health Savings Account, maximizing those contributions before retirement creates a dedicated fund with triple tax advantages. Contributions are deductible, growth is tax-free, and withdrawals for qualified medical expenses are also tax-free. It's one of the most efficient tools available to pre-retirees and one of the most underused. Midwest states also tend to offer more affordable senior living and long-term care options than the Northeast and West Coast, which is a meaningful advantage for families planning to age in place.7
So, Is $1 Million Enough?
For many Midwest families, yes. But the honest answer is that the number alone tells you very little. What actually determines retirement security is what you’ve built around it.
Consider two families. One has $900,000 saved, owns their home outright, carries no consumer debt, has a combined Social Security income near the average, and has worked with an advisor on a tax-efficient withdrawal strategy. Their portfolio needs to generate roughly $22,000 per year. At 4%, that requires about $550,000. They are in excellent shape.
Another family has $1.2 million saved but carries significant debt, hasn't thought through Social Security timing, holds most of their savings in taxable accounts, and faces high healthcare costs. Despite the larger balance, their retirement feels uncertain and fragile.
The goal was never the number. It's the plan behind it. When your income sources, spending, taxes, and savings all work together, the question of whether $1 million is enough becomes a much easier one to answer.
Frequently Asked Questions
What if I retire before Social Security kicks in? How do I bridge that gap? This is one of the most common planning challenges we work through with clients. If you retire at 62 but want to delay Social Security until 67 or 70 to maximize your benefit, your portfolio needs to carry more of the income load during those early years. The good news is that this is manageable with the right withdrawal strategy. Some retirees draw more heavily from Roth accounts in those early years to manage their tax bracket, while others use a combination of taxable investment accounts and cash reserves. The key is planning for the bridge period well before you get there, not the week before you hand in your notice.
Does the 4% rule still hold up given today's market environment and inflation concerns? It's a fair question and one worth asking. The 4% guideline was developed using historical market data going back decades and has held up across a variety of market conditions, including periods of high inflation. Some financial planners suggest retirees with longer time horizons or more conservative portfolios should consider a slightly lower initial withdrawal rate, closer to 3.5%, to build in additional cushion. Others point out that retirees with flexible spending habits, those who can dial back discretionary spending in down years, can safely stay at 4% or a bit above. No withdrawal rate works in isolation. It works in combination with your overall income picture, your spending flexibility, and how your portfolio is invested.
Ready to Work Through Your Number?
At RetireRight, we work with families across Iowa and the Midwest who are trying to answer exactly this question. Not with a generic rule of thumb, but with a plan built around their actual income needs, tax situation, Social Security strategy, and retirement timeline. If you've been wondering whether you're on track, let's have that conversation.
1 What Is the Average Retirement Savings by Age?, NerdWallet
2 The Average Retirement Savings by Age, Kiplinger
3 Retirement Cost of Living: What You Need to Know Before You Retire, Western Southern
4 The Average Monthly Social Security Check: March 2026, Kiplinger
5 Average & Median Retirement Savings by Age, Savvywealth
6 Is not planning ruining your plans?, Edelman Financial Engines
7 Senior Living Costs by State, Where You Live Matters