A $1 million retirement nest egg used to sound like a golden ticket—and for many Americans, it still represents a major financial milestone.
But retirement has gotten more expensive. Americans now estimate they need $1.46 million to retire comfortably, according to Northwestern Mutual’s 2026 Planning & Progress Study.
At the same time, nearly half (48%) of the study’s respondents worry they’ll outlive their savings.
Whether $1 million can last 30 years often has less to do with someone’s investment portfolio and more to do with their expenses.
And when homeownership can easily be one of your biggest expenses, it can quickly affect how far a $1 million nest egg will stretch.
A $1 million nest egg only generates so much income
Many financial advisors use the 4% rule as a rough starting point for retirement planning. Under this rule, you could theoretically withdraw about $40,000 per year (or 4% of $1 million), adjusted for inflation, without significantly increasing your risk of running out of money in retirement.
“For many people, that may not be enough to support the retirement they imagined, especially if they still have a mortgage, high property taxes, rising insurance premiums, healthcare costs, or other major expenses,” shares Linda Grizely, a certified financial planner and financial wellness speaker. She points out that “a million dollars can sound like a lot, but retirement success is less about the account balance and more about how much income the portfolio needs to produce.”
Considering the average retired worker gets around $2,071 per month in Social Security benefits, that puts your total income with a $1 million nest egg at around $64,852 per year or $5,404 per month.
At first glance, that may sound like plenty. But many retirees are increasingly worried about Social Security cuts in the future—and rightfully so.
A recent analysis from the Committee for a Responsible Federal Budget found that Social Security benefits could face a 24% reduction by 2032 if lawmakers don’t address the program’s projected funding shortfall.
The hidden homeownership costs retirees often forget
The average mortgage payment is around $2,000, which automatically drops your $5,404 monthly income down to $3,404. At first glance, this could seem fairly comfortable. The bigger problem is all the housing costs you could have on top of this.
Average property taxes across the U.S. are $1,889 or $157 per month. Average home insurance is $2,543 per year or $212 per month. It’s expected to pay between 1% and 4% of your home’s value in maintenance costs each year (which is $4,000 to $16,000 per year or $333 to $1,333 per month on a $400,000 home)
Your housing expenses could be different than these averages. But given what the typical person could expect to pay, these housing costs alone would eat up 50% of your $5,404 total monthly income on a $1 million nest egg plus Social Security.
This would leave you with just $2,707 for other expenses, including health care, other loan payments, groceries, utilities, travel, and other hobbies.
Why where you live matters more than ever
A $1 million retirement can look very different depending on your ZIP code.
Take Florida, one of the country’s most popular retirement destinations. While the state has no income tax, the average home insurance costs are $7,136 per year—much higher than the national average. Add property taxes, HOA dues, and routine maintenance, and a retiree could easily spend well over 50% of their monthly income on housing-related expenses.
Arizona presents a different picture. Insurance costs are often lower than in Florida ($2,344 on average per year), but retirees still face rising property taxes, HOA fees in many communities, and the reality of running air conditioning for much of the year. During the hottest months, utility bills alone can become a large budget item.
What does this mean, exactly? Two retirees could both have $1 million saved, receive the same Social Security benefit, and own homes of similar value—yet one may have substantially more disposable income simply because their housing costs are lower.
How to keep your house from draining your retirement savings
The good news is that rising homeownership costs don’t automatically mean you’ll run out of money in retirement. But they do require planning.
Create a separate bucket for home repairs and maintenance
Rather than treating a new roof or HVAC system as an unexpected emergency, treat it as an inevitable expense and save for it accordingly.
Take a fresh look at your living situation
Depending on your situation, downsizing could majorly reduce how much you pay in property taxes, insurance premiums, utility bills, and maintenance costs. You may also find that moving to a lower-cost-of-living area allows your retirement savings to stretch much further.
“Some people may need to consider downsizing or relocating, especially if the costs of staying in their current home would put too much pressure on their retirement income,” Grizely shares. She also says to use main levers if needed, like “working longer, saving more, spending less, or some combination of the three.”
Use home equity with caution
You could also explore tapping into your home equity with a HELOC or reverse mortgage—but be careful. These products aren’t right for everyone, but they can make sense in certain situations when incorporated into a broader retirement plan.
Don’t overlook the simpler opportunities
Reshopping your homeowners insurance every few years, appealing your property tax assessment when appropriate, and reviewing recurring expenses can all help reduce the ongoing cost of homeownership.
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