Can you retire early in the US with $1 million? This question troubles many people with dreams of financial independence.

In recent years, the FIRE movement (Financial Independence, Retire Early) has gained popularity worldwide, especially among young investors. Some ask: if a couple saves up $1 million for retirement, is it really possible to say goodbye to the workforce?

It all depends on the "4% withdrawal rule." According to this classic theory, you can safely withdraw $40,000 annually from a $1 million fund.

If you are already of retirement age to receive government benefits, the situation becomes much easier. For example, if each person receives $20,000 in government pensions, plus $40,000 from your accounts, you have an annual income of $80,000—which is just around the average household income in the US. Enough to support yourself.

But here’s the catch. If you are not yet eligible for government or employer pensions, that $40,000 might feel tight. In this case, if you and your partner each save $1 million (a total of $2 million), applying the 4% rule, you can withdraw $80,000 per year, making life much easier.

So, for the average American, saving $1 million in a retirement account means the goal of financial freedom is actually within reach.

The question then becomes: how long will it take to save up $1 million?

Assuming you invest Y dollars annually into an index fund (like the S&P 500), with an annual return rate of R%, after N years, your assets will be:

Y × ((1 + R)^N - 1) / R

At a 10% annual return:

- Monthly investment of $1,200 (annual investment of $14,900) → 45 years
- Monthly investment of $3,000 (annual investment of $36,900) → 35 years
- Monthly investment of $5,000 (annual investment of $12,204) → 25 years
- Monthly investment of $1,460 (annual investment of $17,500) → 20 years
- Monthly investment of $2,600 (annual investment of $31,000) → only 15 years
- Monthly investment of $5,200 (annual investment of $62,000) → just 10 years

These numbers are not made up. Over the past 20 years, the annualized return of investing in the S&P 500 has been as high as 13.4%, and over the past 30 years, it has maintained above 10.7%.

In short, as long as you are willing to plan ahead and take action early, many American households could become millionaires and achieve their early retirement dreams. The key is not to wait—the earlier you start harnessing the power of compound interest, the more obvious its magic becomes.