Can You Retire on 4 Million?

• You need roughly 4 million to retire comfortably.
• This may seem quite intimidating, but it's a lot easier to accumulate than you think.
• If you make $50,000 annually and save 20% of your income, you'll be a millionaire in 14 years.

You need roughly 4 million to retire comfortably. This may seem quite intimidating, but it's a lot easier to accumulate than you think. If you make $50,000 annually and save 20% of your income, you'll be a millionaire in 14 years. That sum will only grow to over 4 million over the next 40 years or so.

A 4 Million Retirement Plan

Let's assume that you're 45 years old and have $4 million in your portfolio. Although this may sound like a lot of money, there are inherent issues here as well.
First, it's entirely possible that you may not get 4% annual real returns, and inflation could be significantly higher. Also, you're assuming you'll be able to fund your retirement plans for 30 years. This may not be possible depending on a number of factors.

How Much Money Is Needed to Retire?

Retirees can live on somewhere between $30,000 and $50,000 a year. This estimate is based on assuming $50,000 in annual expenses, including health care expenses. For a retiree, health care expenses can vary widely depending on their lifestyle.
The $30,000 to $50,000 annual estimate assumes a retiree wants to maintain a lifestyle similar to that during their working years. Of course, other requirements like health care expenses, travel, and food (for some) will increase that estimate.

How Much Will You Need in Retirement?

Here's one more important question: How soon do you expect to retire?
The answer to this question will help determine how much you'll need to have saved to fund your golden years.
According to the 2018 Retirement Confidence Survey by The Employee Benefit Research Institute (EBRI), 34% of workers expect to retire between the ages of 65 and 69, while 26% of workers plan to retire between the ages of 70 and 74.

How Much Will a 4 Million Retirement Plan Cost?

For a variety of reasons, it's often difficult to retire solely on the amount of money one has accumulated in 401(k) plans, IRAs, and mutual funds.
It's often necessary to draw down social security early, or supplement retirement income with a part-time job.
To provide a clearer picture of what a 4 million retirement looks like, let's take a closer look at how a couple, living in a major metropolitan area, plans to spend their retirement.

How Much Will a 4 Million Retirement Plan Provide?

If you retire in your 60s and live to an average age, you'll likely live about 30 more years. If you invest $100,000 a year from age 60 to 90, assuming an annual real return of 6%, you'll have a total nest egg of $4.4 million.