Can I retire with 4 million dollars? This guide will show you how to retire on 4 million dollars step-by-step. In addition, we’ll provide estimates on your retirement income at different age brackets.
If you are close to transitioning to retirement, check our Retirement Planning Guide.
If you are not close to transitioning to retirement, check out our Guaranteed Retirement Income Guide.
Use an annuity calculator to get a better idea of the retirement income generated.
This guide will answer the following commonly asked questions:
- Can I retire on $4 million?
- Can I retire at 55 with $4 million?
How to Retire on 4 Million Dollars
The average monthly Social Security Income check 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 | $17,280 | $20,366 |
| 65 | $3,086 | $18,884 | $21,970 |
| 70 | $3,086 | $20,532 | $23,618 |
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). 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 | $25,492 | $28,578 |
| 65 | $3,086 | $27,000 | $30,086 |
| 70 | $3,086 | $30,088 | $33,174 |
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 | $35,124 | $38,210 |
| 45 | $3,086 | $39,524 | $42,610 |
| 50 | $3,086 | $44,400 | $47,486 |
How To Retire On $4 Million By Age
The following guaranteed income amounts are on an annual basis and do not include Social Security Benefits.
Retire At Age 55 With $4 Million.
| Annuity Purchase Date | Annual Income At 55 |
|---|---|
| Age 40 | $328,908 |
| Age 45 | $326,312 |
| Age 50 | $244,996 |
| Age 55 | $188,000 |
Retire At Age 60 With $4 Million.
| Annuity Purchase Date | Annual Income At 60 |
|---|---|
| Age 40 | $421,520 |
| Age 45 | $379,976 |
| Age 50 | $360,760 |
| Age 55 | $264,128 |
Retire At Age 65 With $4 Million.
The following guaranteed income amounts are on an annual basis and do not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At 65 |
|---|---|
| Age 40 | $516,732 |
| Age 45 | $474,320 |
| Age 50 | $438,060 |
| Age 55 | $400,848 |
Why Use An Annuity?
Why use an annuity? Currently, 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 basically 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, ever.
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.
Example
A 40-year-old purchases a $1,000,000 annuity with a lifetime income rider to retire at age 60. At age 60, the lifetime income amount may be guaranteed $105,380 initially but hypothetically increases to $288,439 by age 67. Once the income has increased to $288,439 annually, this payment is locked in and can never go below $288,439 in the future.
On the other hand, a performance-based annuity may hypothetically generate an income of $381,349 a year for life starting at age 60, increasing to $636,610 a year by age 70. Once the income has increased to $636,610 annually, this payment is locked in and can never go below $636,610 in the future.
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. 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. 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.
Find Out How Much Income Your $4 Million Will Provide In Retirement
Retirement Income Guides
- Is 5 Million Enough To Retire at 60?
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- Can You Retire on 2 Million Dollars?
- Can I Retire at 60 with $1.5 Million?
- How to Retire on $1 Million.
- Can I Retire at 60 with $500K?
- How to Retire on $200K.
- How much would a $250,000 annuity pay?
- How Much Should Be Saved For Retirement At Age 40?
- Is $800,000 Enough To Retire on?
- Can I Retire at 60 with $750k?
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 $145,200 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 $124,200 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 $158,400 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 $129,600 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 $189,200 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 $160,000 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 $206,400 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 $180,000 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.
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.
I’m a licensed financial professional. I’ve sold annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.
My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you.