Many people believe they need at least $1 million to have a comfortable retirement. But for many Americans, reaching that milestone is unrealistic. The good news? You don’t need a seven-figure portfolio to enjoy a secure and fulfilling retirement.

With strategic planning and smart financial decisions, you can retire comfortably with less than $1 million. These seven steps will help you achieve this objective.

1. Maximize Social Security Benefits

Social Security is a crucial income source for many retirees. To get the most from your benefits:

• Delay claiming: Waiting until age 70 to start collecting increases your monthly benefit significantly compared to claiming at 62.

• Work at least 35 years: Benefits are calculated based on your highest 35 earning years, so ensuring a full career can maximize your payout.

• Coordinate with a spouse: Spousal and survivor benefits can enhance your total Social Security income.

2. Keep Housing Costs Low

Housing is one of the biggest expenses in retirement, so reducing this cost can stretch your savings:

• Pay off your mortgage: Entering retirement without a monthly mortgage payment can significantly reduce financial stress.

• Downsize: Moving to a smaller, more affordable home can free up home equity and lower maintenance costs.

• Consider geo-arbitrage: Moving to a lower-cost state or even a different country with a lower cost of living can make your retirement savings last longer.

3. Optimize Healthcare Costs

Healthcare can be a major expense, but planning ahead can help:

• Use a Health Savings Account (HSA): If you’re still working and have a high-deductible health plan, contribute to an HSA for tax-advantaged medical savings.

• Choose the right Medicare plan: Compare options and choose a plan that balances costs and coverage.

• Take advantage of preventative care: Staying healthy can minimize medical expenses in retirement.

4. Generate Passive Income Streams

A diversified mix of income sources can help supplement your retirement savings:

• Dividend-paying stocks: Reliable dividend stocks can provide steady income.

• Real estate investments: Rental properties or REITs (Real Estate Investment Trusts) can generate passive income.

• Side gigs and hobbies: Consulting, freelance work, or monetizing a hobby can help bring in extra cash.

5. Adopt a Flexible Withdrawal Strategy

Withdrawing too much too soon can deplete your savings, so managing withdrawals wisely is key:

• Follow the 4% rule cautiously: While traditionally recommended, consider adjusting based on market conditions.

• Use a bucket strategy: Keep short-term cash needs in liquid accounts and invest the rest for growth.

• Prioritize tax-efficient withdrawals: Withdraw from taxable accounts first, then tax-deferred accounts like IRAs and 401(k)s to minimize tax burdens.

6. Cut Unnecessary Expenses

Living frugally doesn’t mean sacrificing quality of life. Consider these cost-saving measures:

• Eliminate high-interest debt: Pay off credit cards and personal loans before retiring.

• Utilize senior discounts: Many businesses offer discounts for retirees.

• Cook at home more often: Reducing dining-out expenses can save thousands annually.

7. Consider Alternative Retirement Lifestyles

If traditional retirement seems financially daunting, consider:

• Part-time work: A part-time job can provide income and keep you engaged.

• House hacking: Renting out a portion of your home or co-housing can cut costs.

• Nomadic retirement: Living in an RV or traveling in lower-cost countries can be surprisingly affordable.

Final Thoughts

Retiring comfortably without $1 million is entirely possible with thoughtful planning, careful budgeting, and strategic investments. By maximizing Social Security, reducing housing and healthcare costs, generating passive income, and embracing a flexible lifestyle, you can achieve financial security in retirement—no matter your portfolio size.

The key is to start planning early and adapt as needed. Retirement isn’t about hitting an arbitrary number; it’s about making smart choices that align with your personal goals and financial reality.