On Monday, Maryalene LaPonsie asked in US News, “Can You Retire on $1 Million?”

She quoted a New York City advisor, Brent Lipschultz at accounting and advisory firm EisnerAmper, saying $1M would last about 20 years. Drawing on data from the Bureau of Labor Statistics, which shows that people age 65 and older have annual expenses of about $50,000, he “assumed inflation would be 2.9%, investments would earn 4% each year, and a person’s state and federal tax rates would be 30% combined.”

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SmartAsset makes plain in an interactive map that location matters. The site tallies average expenses for housing, food, health care, utilities, and transportation to estimate how long a $1M retirement fund will last. Samples, in round numbers:

Number of Years a
$1M Retirement Fund Will Last
–  –  –  –  –  –  –  –  –  –  –  –  –  –  –
32 in McAllen, TX
29 in Statesboro, GA
25 in Orlando, FL
21 in Denver, CO
19 in Chicago, IL
17 in Portland, OR
16 in Los Angeles, CA
14 in Seattle, WA
12 in San Fransisco, CA
10 in New York, NY

Lipschultz estimates that a retiree needs to save an additional $765,000 to fully fund a 35-year retirement.

Two endeavors to improve your odds:

1. Grow your nest egg as much as possible.

2. Derive as much retirement income from it as possible.

With enough income generated and reinvested, your retirement stash could avoid a steady decrease from withdrawals, providing you with peace of mind for the duration.

My core Signal plans—3Sig, 6Sig, and 9Sig—are superb growth systems for pre-retirement investing. They’ve made many millionaires already and are in the process of making more. To complete the Sig journey from cradle to grave, an Income Sig plan is needed to provide income and inflation-beating growth. Although I’m still researching the plan, early signs are promising.

I wrote in last Sunday’s Kelly Letter that investing $800K in Omega Healthcare Investors (OHI $36 -1.4% YTD) at its current yield of 7.5% would produce an annual income of $60K. Upping the $800K to the $1M of LaPonsie’s story would up OHI’s annual income to $75K. That’s 50% more than the $50K the BLS estimates as annual expenses for people age 65 and older. The extra could go back into OHI or other income vehicle(s) to maintain growth. With a Signal plan, it would go in price opportunistically.

While we can do better than simply owning OHI or using it alone in a Sig plan, even considering it solo suggests it’s possible to retire comfortably on $1M. According to Morningstar, OHI averaged a total return of 10.8% annually over the past 10 years. The following are its recent total yields:

OHI Recent Total Yields (%)
–  –  –  –  –  –  –  –  –  –  –  –  –  –  –
9.2 in 2017
7.5 in 2018
6.3 in 2019
7.4 in 2020

This reveals that, even in this era of low yields and interest rates, enough yield exists to provide a comfortable retirement. I hope to devise an Income Sig plan that provides a boost on top of it.

Conclusion: Yes, you can retire on $1M.