Free calculators · Retirement income
How much monthly income does $1 million make?
At a 4 percent withdrawal rate, $1 million produces about $3,333 a month before taxes. Change the balance, the rate, and your assumptions to see the monthly income and how long the money could last.
Monthly income, year one, before taxes
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Hypothetical and educational only. Results are estimates from the figures you enter and the rules cited below. They do not account for every factor in your situation, are not a guarantee of any result, and are not tax, legal, or investment advice. The years-it-lasts figure assumes the same return every year and income raised by inflation every year. Real returns vary and their order matters.
Where the 4 percent figure comes from
The 4 percent rule of thumb comes from historical studies of how much a balanced portfolio could pay out over a 30-year retirement, raised each year for inflation. It is a planning starting point, not a promise, and it says nothing about taxes, fees, or a retirement longer than 30 years.
What changes the answer most
Three things move the result more than the headline rate: how long the money must last, what you pay in fees and taxes, and the order of returns in the first ten years. Two people with the same average return can end up with very different results. See why the order of returns decides how long money lasts and the article how much monthly income $1 million generates.
Questions people ask
- How much monthly income does $1 million generate?
- At a 4 percent withdrawal rate, $1 million produces $40,000 a year, about $3,333 a month, before taxes. At 3 percent it is $2,500 a month; at 5 percent, about $4,167. The rate you can sustain depends on how long the money must last, how it is invested, and the order of returns you actually get.
- Is the 4 percent rule safe?
- It is a starting point, not a promise. It comes from historical studies of balanced portfolios over 30-year retirements. Retirements longer than 30 years, high fees, or poor returns early in retirement can make 4 percent too high. No withdrawal rate is guaranteed.
- Why does the calculator ask about inflation?
- Most people want their income to keep its buying power. The calculator raises the withdrawal each year by the inflation rate you enter, which is why the money runs out sooner than a flat withdrawal would suggest.
- Does this include Social Security?
- No. Enter only the savings you will draw from. Social Security, a pension, or rental income add to the monthly figure shown here.
- Why use a steady return when markets are not steady?
- A steady return keeps the math readable. Real returns arrive in a different order every time, and a bad first few years can shorten how long money lasts even when the average is the same. That is called sequence risk.
What to do with the number
A calculator gives you a number. Here is how to turn it into a decision.
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