When it comes to retirement planning, there are a lot of questions that people have. For example, how much money do you need to retire comfortably? How long will your money last? And, perhaps the most critical question is, can you retire with $4 million? This guide will explore these questions and give tips on how to make your money last in retirement.
- Can I Retire Comfortably On $4 Million?
- How Long Will $4 Million Last In Retirement?
- How To Make $4 Million Last A Lifetime In Retirement?
- Social Security
- How To Retire On 4 Million Dollars Immediately
- How To Retire On 4 Million Dollars In 5 Years
- How To Retire On 4 Million Dollars In 20 Years
- How To Retire On $4 Million By Age
- Why Use An Annuity?
- Keeping Up With Inflation
- Things To Consider When Retiring
- Next Steps
- Frequently Asked Questions
- Retirement Income Guides
- Request A Quote
Can I Retire Comfortably On $4 Million?
The simple answer is yes. You can retire with $4 million. However, it is essential to note that your lifestyle will significantly affect how long your money will last. For example, four million dollars may not be enough if you like to travel and live a luxurious lifestyle. On the other hand, if you are content with a more modest lifestyle, then $4,000,000 could last you decades in retirement.
How Long Will $4 Million Last In Retirement?
This question is problematic because it depends on various factors, including age, health, and lifestyle. However, we can give you a rough estimate. For example, if you live a modest lifestyle and have no significant health problems, your $4,000,000 could last 20-30 years in retirement.
How To Make $4 Million Last A Lifetime In Retirement?
The only way to guarantee you don’t run out of money in retirement is to purchase an annuity with a lifetime income rider. This guarantees you receive a certain amount of money each month for the rest of your life, no matter how long you live.
For example, if a 55-year-old person purchases a $4,000,000 annuity with a lifetime income rider and wants to retire in 10 years at age 65, they would receive roughly $571,261 per year for the rest of their life. If you live for 30 years in retirement, you will receive over $17 million in payments. When the annuity owner dies, the remaining balance is passed down to beneficiaries in a lump sum.
Social Security
The average monthly Social Security income in 2021 is $1,543 per person. In the tables below, we’ll use an annuity with a lifetime income rider coupled with SSI to better understand the income you could receive off $4,000,000 in savings. The data will be based on:
- Social Security Benefits will be based on couples at $3,086 total.
- Deferred annuity with an income rider providing a monthly income for life.
- The starting point will be age 62 since this is the earliest age to collect SSI.
How To Retire On 4 Million Dollars Immediately
The table below illustrates how much monthly income can be generated immediately with annuity payments and Social Security Income (SSI).
ADDITIONAL READING: How Much Does A $1,000,000 Annuity Pay?
If you retire on a $4,000,000 annuity, starting immediately, your monthly income for life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $25,167 | $28,253 |
| 65 | $3,086 | $26,433 | $29,529 |
| 70 | $3,086 | $28,500 | $31,586 |
How To Retire On 4 Million Dollars In 5 Years
The table below illustrates how much monthly income can be generated in 5 years with a combination of annuity payments and Social Security Income (SSI). The “Age” column is the purchase date. If you retire in 5 years on a $4,000,000 annuity, your monthly income for life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $38,271 | $41,357 |
| 65 | $3,086 | $39,640 | $42,726 |
| 70 | $3,086 | $42,433 | $45,519 |
How To Retire On 4 Million Dollars In 20 Years
The table below illustrates how much monthly income can be generated in 5 years with a combination of annuity payments and Social Security Income (SSI). If you retire in 20 years on $4,000,000, your monthly income for life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 40 | $3,086 | $52,609 | $55,695 |
| 45 | $3,086 | $58,473 | $61,559 |
| 50 | $3,086 | $64,418 | $67,504 |
How To Retire On $4 Million By Age
The following guaranteed income amounts are annual and do not include Social Security Benefits.
Retire At Age 55 With $4 Million.
The following table estimates the guaranteed annual income a 55-year-old can retire with $4 million. This does not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At 55 |
|---|---|
| Age 40 | $546,543 |
| Age 45 | $481,016 |
| Age 50 | $352,800 |
| Age 55 | $260,000 |
Retire At Age 60 With $4 Million.
This table estimates the guaranteed annual income a 60-year-old can retire with $4 million. This table does not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At 60 |
|---|---|
| Age 40 | $631,309 |
| Age 45 | $620,258 |
| Age 50 | $555,200 |
| Age 55 | $386,772 |
Retire At Age 65 With $4 Million.
The following table estimates the guaranteed annual income a 65-year-old can retire with a $4 million annuity. This table does not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At 65 |
|---|---|
| Age 40 | $730,839 |
| Age 45 | $701,672 |
| Age 50 | $695,026 |
| Age 55 | $575,615 |
Why Use An Annuity?
Why use an annuity? Annuities are the only retirement plan in the United States that provides a guaranteed income for a lifetime, even if the plan runs out of money. The annuity is a money management tool in retirement, taking all the guesswork in budgeting your day-to-day expenses. By utilizing this financial plan, a retiree will never have to worry about running out of money, and you’ll be able to earn interest along the way!
Annuity Basics
Understanding Lifetime Income Riders
Keeping Up With Inflation
Some annuities offer a guaranteed lifetime income that can increase regularly to keep up with inflation. Once the income increases, the payment amount is locked in and can never go backward from that point forward.
Things To Consider When Retiring
- If you can’t afford to lose money, invest your savings without the risk.
- Inflation is rising whether you like it or not. So, plan accordingly or decrease your lifestyle.
- Per the U.S. Department of Health and Human Services, you have a 70% chance of entering a Nursing Home, Assisted Living Facility, or Home Health Care. So buy long-term care insurance now.
- There is a 100% chance you will die, so buy life insurance or, at the minimum, burial insurance for funeral expenses.
Next Steps
If you want to retire with $4 million, it is vital to start planning now. Begin by estimating your expenses and creating a budget. Then, start saving as much money as possible and investing for the future. Lastly, be sure to purchase an annuity with a lifetime income rider to guarantee a steady income stream in retirement. Contact us today for a free quote on how much money you will need to save each month to reach your goal! We can help you get there sooner rather than later.
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Frequently Asked Questions
Is $4 million enough to retire at 50?
Yes, you can retire at 50 with four million dollars. At age 50, an annuity will provide a guaranteed level income of $215,000 annually starting immediately for the rest of the insured’s lifetime. The income will stay the same and never decrease. If the annuitant selected the increasing income option, they would receive $168,000 annually initially, with the income amount increasing over time to keep up with inflation. Either lifetime income option will continue to pay the annuitant even after the annuity has run out of money. At the time of the annuitant’s death, the designated beneficiary will inherit the remainder of the annuity.
Is $4 million enough to retire at 55?
You can retire at 55 with four million dollars. Opting for an annuity at this age, you’ll receive a fixed yearly income of $225,000 for life. Alternatively, starting with $186,000 annually, you can choose an increasing income option that adjusts for inflation. Both options ensure continuous payment even if the annuity funds are depleted, and any remaining amount will be passed on to a designated beneficiary upon the annuitant’s death.
Is $4 million enough to retire at 60?
At age 60, with four million dollars, you can retire and opt for an annuity, guaranteeing a lifetime income of $244,000 annually without any decrease. Alternatively, you can begin with $208,000 yearly, which will increase over time to offset inflation. Regardless of the chosen option, payments continue even if the annuity funds are exhausted, and any remaining balance is inherited by a designated beneficiary upon the annuitant’s demise.
Is $4 million enough to retire at 65?
Suppose you retire at 65 with four million dollars. In that case, an annuity can offer a stable yearly income of $269,200 or, if you prefer an inflation-adjusted approach, start at $230,800 with increments over time. Either way, payments persist even if the annuity’s funds deplete, and upon the annuitant’s passing, the leftover amount is passed to a chosen beneficiary. The cited rates, influenced by immediate payout decisions, can increase if the annuitant delays, though they may differ by state.
Retirement Income Guides
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- Use Our Retirement Savings Calculator To Determine How You Should Be Savings Each Month.