Can I retire at 40 with $2 million?

Yes, if you spend about $58,000 to $66,000 a year or less. Retiring at 40 means your money may have to last 50 years, and the 4% rule was built around a 30-year retirement. What $2 million pays each year at 3 withdrawal rates:

• 4%, the classic rule: $80,000 a year
• 3.3%, Morningstar’s estimate for a 40-year retirement: $66,000 a year
• 2.9%, Morningstar’s estimate for a 50-year retirement: $58,000 a year

The Morningstar estimates assume a portfolio of 40% stocks and 60% bonds, spending that rises with inflation, and a 90% chance the money lasts.

For scale, the average U.S. household spent $81,905 in 2025, according to the Bureau of Labor Statistics. Even at the 4% rate, $2 million pays $80,000 a year, a little less than that. At the lower rates it covers a budget well below average.

Earning $20,000 a year from part-time work has the same effect as another $500,000 invested at 4%.

All figures are in today’s dollars. Test your own spending in the FIRE calculator.