I'm 62, have $1.2M saved and I'm planning to retire in 2026 — but I can't shake my anxiety over Trump's reforms. Should I just retire, or are my money worries justified?

Is $1.2M enough to retire comfortably?

Before you make a decision, it's important to carefully consider whether $1.2 million in savings can provide the security that you need in retirement, especially if the Trump administration makes changes that affect your finances.

A $1.2-million nest egg would give you about $48,000 per year in annual income — assuming you follow the standard 4% rule, which restricts a retiree to withdrawing just 4% of their retirement savings per year. This long-standing rule is said to be able to stretch one’s retirement finances for 30 years, but experts now recommend annual withdrawals of 3.7%, which would leave you with an income of $44,400 per year.

That is not an inconsequential amount of money, but since you won’t be eligible for Medicare until age 65, you might have to cover your own healthcare costs for a few years and that could eat into your $44K annual budget.

You may be able to rely on Obamacare to cover healthcare costs until you become eligible for Medicare, but the Trump administration is likely to get rid of expanded subsidies that made this coverage more affordable — or perhaps even reform healthcare and eliminate ACA provisions that cap coverage costs at a percentage of income.

And then there’s Social Security. Benefits increase by a certain percentage for every month that you delay your claim beyond full retirement age, which is 67 for most Americans. Retirees can start claiming Social Security at 62, but that would reduce your benefit checks significantly.

It would behoove a retiree such as yourself to delay your Social Security claim for a few years and max out your benefit checks, but doing so means you’d have to solely rely on your savings for the first several years of your retirement.

While President Trump has vowed not to cut Social Security or Medicare — in fact, he’s actually pledged to eliminate taxes on Social Security benefits — the Department of Government Efficiency (DOGE) is investigating what Trump and Elon Musk have described as "shocking levels of incompetence and probable fraud" within the system.

Meanwhile, the Social Security Administration is planning to cut up to 7,000 jobs, and news of the SSA’s trust funds running out of funding in 2035 have been making headlines as well.

With the future of government benefits up in the air, and some experts warning that President Trump's policies could worsen inflation — which has seen record highs in the post-pandemic era — your fears of a stressful retirement with $1.2 million in savings may be justified.

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Navigating retirement during a time of change

Unfortunately, it's hard to get a grasp on how Trump's policies could affect things like Social Security and healthcare in the near future. And until we know what the Trump administration is planning, such uncertainty might encourage you to delay your retirement and continue to build your savings. But you don't necessarily have to go down that route.

As mentioned above, $44K per year is not a small amount of money and, with a few wise money moves, you may be able to alleviate some of the financial worries that have you rethinking your retirement.

Here are a few things that you may want to consider:

• Settle on a safe-withdrawal rate: Experts now suggest a 3.7% annual withdrawal rate on retirement savings but, depending on your expenditures, you may decide to stick with the traditional 4%.
• Create a budget: Make a detailed budget to ensure your income will cover your needs, including healthcare. You may even want to consider a health savings account until you qualify for Medicare.
• Reduce expenses: As part of your budgeting, try to find ways to cut down on spending. Preparing meals at home, taking advantage of public transportation, cutting expensive streaming services and keeping an eye out for free entertainment are all decent ways to keep spending down during retirement.
• Sell items you no longer need: Selling items that no longer serve a purpose to you is a great way to beef up your retirement finances. Things like furniture, exercise equipment, clothing, electronics and jewelry are all items that could fetch a decent return. If you happen to own a house, downsizing to a smaller living space could also add significant funds to your retirement savings.
• Consider a part-time job: According to CNBC’s August 2024 Your Money retirement survey, 53% of would-be retirees plan to work part time in retirement. This could help to supplement your retirement income and may even allow you to scale your safe-withdrawal rate down below the recommended 3.7%.
• Diversify your investment portfolio: Protect yourself against risk by making sure you have the right asset allocation in your investments. As a retiree you can't afford to take too many risks, especially when a lot of changes could be happening. Try to spread your investments out across several asset classes, as this can help balance your expected risks and returns.
• Stay informed: President Trump has created plenty of uncertainty for seniors across the country, so do yourself a favor and keep a close eye on any developments regarding policies that could implicate your retirement finances.

There’s plenty to consider when planning for retirement, and one could easily argue that today’s political landscape adds even more considerations to the process.

But in order to make an informed decision, consider all of the moves mentioned above and figure out if any of them can work for you. If so, you may be able to retire on schedule with a little more peace of mind than you had before.