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Most Americans believe they need to be millionaires to retire comfortably. As of 2025, the “magic number” for retirement was $1.26 million, according to a survey of U.S. adults by Northwestern Mutual (1).

But what if you’re approaching retirement with less than half of that amount saved? Does a mere six-figure nest egg doom you to a stressful and anxious retired life? Not necessarily.

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In fact, retirees can in many cases end up with more wealth later in retirement, even if they start off with a relatively modest balance — depending on investment returns, spending patterns and longevity.

Someone with just $600,000, for instance, could potentially end up with $1.5 million by the end of their retirement, assuming strong market returns and moderate withdrawals.

To understand why it’s possible, and how to do it, here’s a closer look at three critical factors that shape your life and personal finances after you leave work.

It’s easy to imagine retired life as a period of free spending and expensive hobbies — after all, it’s the culmination of a lifetime of work. But in reality, most retirees tend to reduce their spending over time.

Research published in 2025 by David Blanchett and Michael Finke in Financial Planning Review revealed that 65-year-old couples holding retirement assets of $100,000 or more draw down only 2.1% annually (2). For unmarried retirees in the same category, the withdrawal rate is even lower at approximately 1.9%.

That’s significantly lower than the so-called 4% rule that many financial planners use as a starting point for retirement withdrawal strategies (3).

Aside from the numbers, though, it’s easy to see why spending may decline in retirement. After all, you no longer need to cover commuting costs, work attire or daily office meals. You may also qualify for senior discounts on some products and services, and once you turn 65, Medicare helps cover many — though not all — health care expenses.

However, while retirement can come with reduced expenses, it’s important to remember that it also means the end of a regular paycheck. Without that financial safety net, it’s especially important to keep a close eye on how much you’re withdrawing from your nest egg.

With Monarch Money, there’s an easy way for you to create a custom budget to track where your money is going at all times, whether you’re still saving up for retirement or have already taken the plunge.

Monarch Money puts all your finances under one roof, from your banking statements to your investments. That way, you can track not only your expenses but also how your retirement savings are doing. You can even add separate or joint accounts to your dashboard, which can be great for couples looking to do their retirement planning together.

The app is also well reviewed. Forbes ranked Monarch Money as their best budgeting app for 2025, as did The Wall Street Journal.

Plus, if you want to see if it’s right for you, Monarch Money offers a seven-day free trial to test out the platform. If you like what you see, you can snag 50% off for your first year with the code WISE50.

Read More: Taxes are changing under Trump’s ‘big beautiful bill’ — 4 reasons why retirees can’t afford to waste time

The key reason why many retirees withdraw less from their nest egg in the first place is that they have a steady source of income from Social Security benefits.

Despite mounting fears about its insolvency as early as 2032 (4), Social Security is a nearly universal and relatively generous program. About 94% of workers are covered under Social Security, and as of January 2026, the average monthly benefit check is $2,071 (5).

That monthly check, it’s worth pointing out, makes up more than half (57%) of the average retiree’s income, while it’s the sole source of income for nearly a quarter (22%) of retirees, according to a 2026 study by Clever Real Estate (6).

It can make a big difference.

For instance, a retired couple with $600,000 in combined savings would receive roughly $38,500 per year from Social Security — based on the projected average monthly benefit ($3,208) for an older couple in January 2026 (7) — and would need to withdraw from their savings to cover any remaining expenses.

If their annual expenses are $60,000, for example, Social Security would cover about $38,500, leaving a gap of roughly $21,500 per year to withdraw from their portfolio. That amounts to a withdrawal rate of about 3.6% on $600,000 in savings.

Even if they withdrew closer to 4% annually, there is still a good possibility that their portfolio could maintain stability or grow over time, depending on investment returns and market conditions.

Although the 4% rule is still the gold standard in the financial planning industry, it was developed in the 1990s and was based on historical market data from the prior decades (8). In other words, it may not perfectly reflect today’s market environment.

In fact, even its creator, William Bengen, has recently suggested a higher sustainable withdrawal rate of about 4.7% under certain conditions.

Simply put, the traditional 4% rule may be too conservative. That’s reflected in the recent capital market performance.

As of April 9, 2026, the 20-year U.S. Treasury bond yield is about 4.88% (9). Meanwhile, Vanguard’s S&P 500 ETF has delivered an impressive 14.12% annualized return over the past 10 years, as of March 31, 2026 (10).

In other words, stocks and bonds have both recently outperformed the 4% withdrawal benchmark. Even if you assume more moderate future returns, portfolios can still experience asset appreciation over the long term.

That also means your nest egg can keep growing during retirement.

Even if you’re no longer making large contributions, small, consistent investments — including squirreling away spare change from everyday purchases — can still add to your nest egg over time. For instance, investing $30 each week for 20 years can give your nest egg a $93,660 boost, assuming it compounds at 10% annually (11).

So, if you’re looking to keep making small investments to add to your retirement savings, you might want to consider using platforms like Acorns, which gives you a simple and automatic way to turn your spare change from everyday purchases into an investment opportunity.

It works like this: Once you link all your cards, Acorns will automatically round up all expenses to the nearest dollar and invest the difference into a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.

For instance, when you buy your morning coffee for $4.25, Acorns deducts $5 from your account and invests the difference, making that purchase a 75-cent investment into your future.

If you sign up today with a monthly contribution, you can get a $20 bonus investment.

Even when you’re withdrawing from your nest egg in retirement, a solid portfolio can still compound.

Let’s take an example. A retired couple has $600,000 in net personal assets, 60% in stocks and 40% in bonds — the classic 60/40 split. They assume a 10% annualized return on stocks and a 4% annualized yield on bonds.

The expected annual return of this 60/40 portfolio is 7.6%. This is calculated using a weighted average:

60% × 10% = 6.0% (stocks)

40% × 4% = 1.6% (bonds)

Total = 7.6%

If the couple withdraws 4% annually, the portfolio’s net growth rate would be approximately 3.6% per year. At that rate — assuming consistent returns and withdrawals — their $600,000 portfolio could potentially grow to roughly $1.45 million over 25 years, based on compound growth at 3.6%.

But reaching those kinds of returns often comes down to picking the right mix of stocks and bonds — something many investors find challenging. That’s where platforms like Moby can help.

Moby provides expert research and recommendations to help you identify strong, long-term investments backed by advice from former hedge fund analysts.

In four years, and across almost 400 stock picks, their recommendations have beaten the S&P 500 by almost 12% on average. They also offer a 30-day money-back guarantee so you can make sure their stock picks align with your appetite for risk.

Moby’s team spends hundreds of hours sifting through financial news and data to provide you with market reports delivered straight to you. Their research keeps you up-to-the-minute on stock shifts and can help you reduce the guesswork behind choosing stocks and ETFs.

Plus, their reports are easy to understand for beginners, so you can become a smarter investor in just five minutes.

At the same time, keeping costs down can make a big difference over time. A discount broker like SoFi, which offers no-commission trading, could help you save thousands in fees over the long run.

Their easy-to-use DIY investing platform lets you buy stocks, ETFs and more with no commission fees and no account minimums.

SoFi is designed for both beginners and seasoned investors, with real-time investing news, curated content and the data you need to make smart decisions about the stocks that matter most to you.

Plus, for a limited time, you can get up to $1,000 in stock when you fund a new account.

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We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

Northwestern Mutual (1), (3); Wiley Online Library (2); Congressional Budget Office (4); Social Security Administration (5), (7); Clever Real Estate (6); U.S. News & World Report (8); U.S. Department of the Treasury (9); Vanguard (10); Acorns (11)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.