How to retire with $4 million

what is the percentage of 4 million dollars a year

what is the percentage of 4 million dollars a year

Putting $4 million into retirement is a big achievement. However, you are probably wondering how many percent earn $4 million a year. Predicting how much interest your stash will earn will help you decide if it’s enough to support your lifestyle. But the interest earned will vary depending on the type of investment you choose. Here are some common investments to give you an idea of ​​the amount of interest you can earn on $4 million. For more specific questions related to your own financial goals, consider talking to a financial advisor.

$4 million annual percentage by type of investment

Where you choose to store and invest your money will determine the amount of interest you earn. For example, if you choose high-yield savings with a modest interest rate, you can expect modest returns compared to higher risk investments such as stocks. However, choosing investment with less risk may not generate significant returns, but you may not have to worry about losing a significant portion of your investment when the market is down.

Here is a general indicator of what you can earn $4 million for each type of popular investment:

High Yield Savings Account

Typically, high-yielding savings accounts earn around 0.80%, which is a significant increase over the traditional savings account, which averages 0.06%. So, if you choose a high-yielding savings account, you could be earning around $32,000 a year. If you choose a traditional savings account, you can earn $10,000 a year. In some banks, you can even earn 1.25%. You can usually open this type of account online or in person, depending on which financial institution you choose to use.

Certificate deposits

Another option that usually offers a higher interest rate than a savings account is the CD. However, unlike a savings account, you usually have to keep your money in the account for a set period of time, which you can choose when you open the account. Terms usually vary from 30 days to several years.

The national average interest rate on CDs is 0.26%. However, some offer interest rates up to 2.25% if you invest for a longer period of time. So, if you choose to invest in a CD for five years or more, you can expect an annual return of around $90,000 or more.


In the investment world, investors consider bonds a low-risk investment. This means that when there is a lot of turbulence in the market, bonds seem to stay afloat as long as you work with a reputable issuer. If you are not dealing with a reputable issuer, bonds may carry more risk.

Interest rates on bonds typically range from 2% to 5% per annum. So with $4 million, you could be making between $80,000 and $200,000 a year.

Real estate

When it comes to investing in real estate, you have many options such as investing in rental properties or real estate investment trusts (REITs). So the interest you earn can vary greatly depending on the investment you choose. REITs, for example, bring from 3% to 10% per annum. So you can earn between $120,000 and $400,000.


Investors are offered a new source of income with dividend stocks. Along with the new income, the underlying value of the shares may also increase. You can expect to receive between 2% and 5% dividends every year. So if you have a $4 million portfolio, you will be earning between $80,000 and $200,000 a year.

Factors that can affect retirement income

what is the percentage of 4 million dollars a year

what is the percentage of 4 million dollars a year

There are many factors that affect your retirement income. The amount of money you set aside to invest is only one. Another important factor that can negatively affect your overall income is the amount of fees you will have to pay. There are other important factors to keep in mind:

  • Investment complex: Your investment mix or the diversification of your portfolio will have a significant impact on the rate of return you earn each year. As stated above, you can see that all investments come with different levels of risk. Therefore, if you invest all your pennies only in a high-risk asset, you risk losing everything in the event of a market downturn. On the other hand, if you invest in several different asset classes, you can reduce your losses as all investments react differently to market conditions.

  • Inflation: Unfortunately, inflation affects your purchasing power. Thus, as inflation rises, your savings will become less valuable.

  • Taxes: Uncle Sam wants some of your stash too. While some taxes are unavoidable, you can reduce your tax burden by working with a tax professional and financial advisor. Both professionals can help you lower your taxes so you can keep more of your savings.

Sustained output speed

Once you reach retirement, you will need to pinpoint a sustainable withdrawal rate. The withdrawal rate is the portion of your savings that you spend each year to maintain your lifestyle in your golden years without drastically reducing your investment. Professionals usually recommend a withdrawal percentage of 4% to 5%. So, if you have a $4 million portfolio, withdrawing 4% per year will give you about $160,000 per year to live on. Of course, this figure does not take into account taxes or inflation rates.

When determining a sustainable recovery rate, it is also useful to consider other factors, such as:

  • time horizon

  • Market conditions

  • Investment mix

  • taxes

  • Management fee

Keep in mind that you may need to adjust your withdrawal rate as you retire. What worked in the past may not work in the future. You must make the appropriate adjustments. A financial advisor can help you assess your needs and determine an appropriate withdrawal rate that won’t drain your retirement savings.


what is the percentage of 4 million dollars a year

what is the percentage of 4 million dollars a year

The amount of interest you earn on $4 million will depend on the type of investment in your portfolio. Whether you are investing in real estate, CDs, bonds, or other destinations, weighing the pros and cons of each investment option is critical. While the amount of interest earned on an investment is an important factor, you need to consider other aspects of your investment decision, such as exposure to risk.

Retirement Planning Tips

  • The best way to determine how much you can earn in retirement is probably to speak with an expert who can help you figure out your personal financial situation. Finding a qualified financial advisor is not difficult. The free SmartAsset tool matches you with up to three financial advisors who serve your area, and you can interview your advisors for free to decide which one is right for you. If you’re ready to find a consultant to help you reach your financial goals, start now.

  • It is important to assess your risk tolerance because not all investments are created with the same risk. Assess your risk tolerance with the free SmartAsset Asset Allocation Calculator.

  • Predicting the growth of your savings is important because the money you save will earn interest. If exacerbated over time, these interest savings can add up quickly. See how much your savings will grow with the free SmartAsset Savings Calculator.

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