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 important 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
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 is a difficult question to answer because it depends on various factors, including your 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, then your $4,000,000 could last you 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 will guarantee that 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, that person would receive roughly $485,826 per year for the rest of their life. If you live for 30 years in retirement, you will receive over $14 million in payments. When the annuity owner dies, the remaining balance passes 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 provide you a better idea of the income you could receive off a $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 a combination of 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 | $21,167 | $24,253 |
| 65 | $3,086 | $22,433 | $25,519 |
| 70 | $3,086 | $24,500 | $27,586 |
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 | $32,042 | $35,128 |
| 65 | $3,086 | $33,835 | $36,921 |
| 70 | $3,086 | $36,620 | $39,706 |
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 | $44,628 | $47,714 |
| 45 | $3,086 | $49,352 | $52,438 |
| 50 | $3,086 | $54,645 | $57,731 |
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 | $472,661 |
| Age 45 | $428,104 |
| Age 50 | $302,395 |
| Age 55 | $225,000 |
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 | $535,538 |
| Age 45 | $485,053 |
| Age 50 | $439,328 |
| Age 55 | $334,674 |
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 | $618,662 |
| Age 45 | $592,219 |
| Age 50 | $591,050 |
| Age 55 | $485,826 |
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.
Annuity Basics
Understanding Lifetime Income Riders
Keeping Up With Inflation
Some annuities offer a guaranteed lifetime income with the ability to 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 going into 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, 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 that you have a steady stream of income in retirement.
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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?
Yes, you can retire at 55 with four million dollars. At age 55, an annuity will provide a guaranteed level income of $225,000 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 $186,000 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 60?
Yes, you can retire at 60 with four million dollars. At age 60, an annuity will provide a guaranteed level income of $244,000 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 $208,000 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 65?
Yes, you can retire at 65 with four million dollars. At age 65, an annuity will provide a guaranteed level income of $269,200 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 $230,800 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.
These rates are based on an immediate payout. The longer the annuitant waits after purchasing an annuity, the higher the income amounts will be. Rates can change and vary by state.
Retirement Income Guides
- Is 5 Million Enough To Retire at 60?
- How to Retire With $3 Million?
- Can I Retire On 2 Million Dollars?
- Can I Retire At 60 On $1.5 Million?
- How to Retire Comfortably On $1 Million.
- Can I Retire At 60 On $500K?
- Is $800,000 Enough To Retire On?
- Can I Retire at 60 with $750k?
- How Much Money Do You Need To Retire With $300,000 a Year In Income?