A $1 million retirement portfolio can provide $4,000 a month at age 65, but the answer to “How long will it last?” depends on what happens between the first withdrawal and the last. At $4,000 per month, the portfolio faces $48,000 in annual withdrawals before considering taxes or inflation.
The simplest calculation looks almost reassuring. Divide $1 million by $48,000, and the money lasts about 20 years and 10 months with zero investment growth. That gets the retiree to roughly age 86. Real retirement portfolios, however, do not sit quietly in a vault waiting for monthly withdrawals.
