For years, headlines have warned Americans that they’ll need over a million dollars to retire. But Kevin O’Leary says the magic number might be much lower.
The Shark Tank star was asked in a 2023 YouTube short how much money someone needs to feel wealthy or at least comfortable. His answer: it depends entirely on lifestyle.
“You can live off $500,000 in the bank and do nothing else to make money,” O’Leary said. “At 5% fixed income, you’re making money with very little risk. Or, if you’re willing to ride the volatility, you can make 8.5 to 9% in equities.”
That adds up to $25,000 to $45,000 a year in passive income without touching the original $500,000. It won’t buy a Manhattan penthouse, but for someone with low expenses and a paid-off home, it could mean financial freedom.
The catch, O’Leary warned, is discipline. “Do not invest in your brother’s restaurant or a bowling alley or a bar or all that other crap,” he said. “You’ll lose your money.” His point: $500,000 only works if you avoid emotional decisions and risky ventures.
For investors looking to grow wealth without becoming landlords or betting everything on the stock market, platforms like Arrived allow people to buy shares of rental homes and collect income passively. O’Leary’s advice echoes a simple rule: don’t gamble your nest egg on someone else’s untested business idea.
Still, his $500,000 benchmark is far below what most Americans think they’ll need. The 2025 Northwestern Mutual Planning & Progress Study found the average American believes $1.26 million is necessary for a comfortable retirement.
Yet many households aren’t close to either number. Federal Reserve data shows median retirement savings for households aged 55 to 64 is just $185,000. For those 65 to 74, it’s $200,000. Younger generations are even further behind, with those under 35 averaging under $19,000.