Is $2 Million Enough to Retire in Texas?
If you’ve saved $2 million for retirement and you’re thinking about retiring in Texas, you’re in a strong position – but the answer isn’t as simple as “yes” or “no.”
It depends on your lifestyle, your other income sources, and how you manage withdrawals from your portfolio. Let’s break it down.
The Short Answer
For most retirees in Texas, $2 million is more than enough, especially when combined with Social Security.
But the real question isn’t whether you have “enough.” It’s whether you have a plan to make it last.
A Real-World Example: Mark and Susan
Let’s look at a couple we’ll call Mark and Susan. They’re both 65, retired, and live in the Dallas suburbs. Here’s their situation:
Assets:
- $2,000,000 in retirement savings (primarily traditional IRAs and 401(k)s)
Income:
- Mark’s Social Security: $2,400/month ($28,800/year)
- Susan’s Social Security: $1,800/month ($21,600/year)
- Combined Social Security: $50,400/year
(Note: The average Social Security benefit for retirees in 2026 is about $2,070/month. Mark is slightly above average; Susan is slightly below.)
After-tax spending goal: $100,000/year
How Much Do They Need From Their Portfolio?
Here’s where most retirement calculators get it wrong – they forget about taxes.
Mark and Susan want to spend $100,000 per year. But their IRA withdrawals are fully taxable, and up to 85% of their Social Security benefits are taxable at their income level. They need to withdraw enough to cover their spending plus federal taxes.
Let’s do the math:
- After-tax spending goal: $100,000
- Social Security income: $50,400
- Portfolio withdrawal needed (after tax): $49,600
Here’s how their taxable income breaks down:
- Taxable Social Security (85%): ~$42,840
- Taxable IRA withdrawals: ~$62,000
- Total Gross income (taxable): ~$104,840
After the standard deduction for a married couple ($32,300 in 2026), their federal tax bill comes to roughly $9,000-$10,000.
Gross portfolio withdrawal needed: ~$62,000
On a $2 million portfolio, that’s about a 3.1% withdrawal rate, comfortably below the traditional 4% rule.
They’re in great shape.
What If They Want to Spend More?
Let’s say Mark and Susan want to travel more in their early retirement years and spend $150,000 after tax. This adds $50,000/year in discretionary spending to their original $100,000/year goal.
- After-tax spending goal: $150,000
- Social Security income: $50,400
- Portfolio withdrawal needed (after tax): $99,600
- Taxable Social Security (85%): ~$42,840
- Taxable IRA withdrawals: ~$122,000
- Total Gross income (taxable): ~$164,840
After the standard deduction, they’re looking at a federal tax bill of roughly $20,000-$22,000 as the higher income pushes more dollars into the 22% bracket.
Gross portfolio withdrawal needed: ~$122,000
Total gross income: $172,400 ($50,400 Social Security + $122,000 portfolio) Withdrawal rate: ~6.1%
Now we’re above the 4% rule. Is that sustainable?
It can be — with the right strategy. Rather than relying on a static rule of thumb, we use a dynamic approach called guardrails that adjusts spending based on portfolio performance. This allows for higher withdrawals in good years while protecting against running out of money in bad years.
Related: Forget the 4% Rule: How Guardrails Help You Spend More in Retirement →
What About Texas-Specific Factors?
Texas has some real advantages for retirees:
No state income tax. Your Social Security, pension, IRA withdrawals, and 401(k) distributions aren’t taxed at the state level. That’s a meaningful boost compared to states like California or New York. Mark and Susan save thousands each year just by living in Texas instead of a high-tax state.
Lower cost of living. Texas is about 7-8% below the national average for cost of living. Cities like San Antonio, Fort Worth, and El Paso are especially affordable.
But watch out for property taxes. Texas has some of the highest property taxes in the country, averaging around 1.8% of your home’s value. On a $400,000 home, that’s $7,200/year. The good news: homeowners 65+ qualify for exemptions that can reduce this burden and freeze school district taxes.
So, Is $2 Million Enough?
For most Texas retirees? Yes, epecially with Social Security filling in the gap.
But “enough” isn’t really the right question. The better question is: Do you have a plan?
A plan that:
- Coordinates your Social Security claiming strategy
- Sequences withdrawals from the right accounts at the right times
- Adjusts dynamically as your portfolio and your life change
- Minimizes taxes over your lifetime
That’s what retirement income planning is all about — and it’s what we specialize in 7 Saturdays Financial.
Ready to See If You’re on Track?
Our Retirement Roadmap is a complimentary, three-meeting process designed to help you understand where you stand and how you can improve your plan. Our goal is to help you invest smarter, lower your lifetime tax bill, and maximize your retirement income. Get started with a free intro call.
About the author: Allen Mueller, CFA, CFP®, is an “engineer turned finance nerd” and founder of 7 Saturdays Financial, a wealth management firm based in Dallas, Texas.
The core focus of 7 Saturdays Financial is helping high performers retire with confidence and make the most of their 7 Saturdays a week.
