How Much Monthly Income Will $1 Million Generate?
By Hans Goldstein, EA, founder, Retirement Literacy Foundation · Updated
Admitted to practice before the IRS.
Retirement Literacy Foundation, a 501(c)(3) nonprofit
Four ways to turn $1 million into a paycheck
| Method | Est. monthly income | Touches principal? | Can you outlive it? |
|---|---|---|---|
| Interest only (~4% fixed) | ~$3,333 | No | No, principal stays |
| 4% withdrawal rule | ~$3,333 | Yes, slowly | Possibly, if markets drop early |
| Treasury or CD ladder, spent down over 30 years (~4%) | ~$4,774 | Yes, on a schedule | Yes, it ends at year 30 by design |
| Delay Social Security to 70, spend savings first | Varies | Yes, early on | No, Social Security pays for life, adjusted for inflation |
How these are figured (checked October 10, 2026): interest only = balance x 4% / 12. Spend-down = the level monthly payment that reaches $0 after 30 years at 4% (standard loan math). The 4% rate is an assumption, not a quote. For reference, U.S. Treasury par yields on October 9, 2026 were 5.02% (5-year), 5.24% (10-year) and 5.60% (30-year) (U.S. Treasury, daily par yield curve). A higher rate raises these numbers and a lower rate cuts them. The 4% withdrawal rule comes from William Bengen's 1994 study of 30-year retirements (Journal of Financial Planning, October 1994). Social Security grows 8% a year for each year you wait past full retirement age, up to age 70, if you were born in 1943 or later (SSA, delayed retirement credits). All figures are before tax and inflation. Run your own balance in the calculator above.
Related free tool: run your own numbers.
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Why the same $1,000,000 gives such different answers
The gap comes down to one trade-off: access vs. certainty. Keeping your money liquid (interest or the 4% rule) means you stay flexible and leave a legacy, but you carry the market risk and the risk of living longer than your money. Spending principal down on a schedule pays more each month but leaves less behind, so many retirees answer the "what if I live to 95?" worry by delaying Social Security instead, which pays for life and rises with inflation.
How long will $1 million last in retirement?
It depends almost entirely on how much you take each year and what the money earns. Below, withdrawals are taken at the end of each year, with no inflation increases and no taxes, so treat these as the arithmetic, not a forecast.
| Yearly withdrawal | Monthly | Lasts at 0% return | Lasts at 4% return |
|---|---|---|---|
| $40,000 | $3,333 | 25 years | Indefinitely (interest covers it) |
| $50,000 | $4,167 | 20 years | About 41 years |
| $60,000 | $5,000 | About 16.7 years | About 28 years |
| $80,000 | $6,667 | 12.5 years | About 17.7 years |
| $100,000 | $8,333 | 10 years | About 13 years |
Real life adds inflation, market swings and taxes, all of which shorten these numbers. To test your own plan against thousands of market paths, use the free Monte Carlo retirement calculator, and see sequence of returns risk for why a bad first few years matters most.
The hidden risk most retirees miss
A big market drop in your first few years of retirement does far more damage than the same drop later. This is called sequence-of-returns risk. It's why two retirees with identical $1 million balances can end up in very different places. Keeping two to five years of withdrawals in cash or a short bond or CD ladder, so you never have to sell stocks in a downturn, is how many retirees protect against it.
See what your number actually is
Enter your balance, age, and goals, and our free Retirement Calculator shows how long your savings last at your withdrawal rate.
Run my income number →Frequently asked questions
Will $1 million last through retirement?
At a 4% withdrawal ($40,000/year), it's designed to last ~30 years, but an early market downturn can shorten that. Delaying Social Security, which pays for life, reduces that longevity risk.
Is interest-only or spending down principal better for $1 million?
Interest-only keeps your principal and flexibility but pays less. Spending principal down on a schedule pays more, but leaves less for heirs and can run short if you live past the plan. Many retirees blend both and delay Social Security, which pays for life.
How much income does $500k, $750k, or $2M generate?
Roughly proportional: about half, three-quarters, or double the figures above. See our companion guides, or run your exact balance in the calculator.
Want to run these numbers for your own situation?
The Retirement Literacy Foundation runs free retirement classes across Southern California on Social Security timing, taxes in retirement, and how to turn savings into income. No products are sold at our classes.
The Retirement Literacy Foundation is a 501(c)(3) non-profit. This guide is general financial education, not individualized investment, tax, or insurance advice. Figures are illustrative and change with interest rates and your personal situation. Consider speaking with a licensed professional before making decisions.
Hans Goldstein, EA
Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit
Admitted to practice before the IRS
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The math at three rates
Monthly income from $1,000,000, before tax
| Rate earned | Interest only (principal kept) | Spent down over 25 years | Spent down over 30 years |
|---|---|---|---|
| 3% | $2,500 | $4,742 | $4,216 |
| 4% | $3,333 | $5,278 | $4,774 |
| 5% | $4,167 | $5,846 | $5,368 |
Calculated by the Retirement Literacy Foundation, checked October 3, 2026: interest only = balance x rate / 12; spend-down = level monthly payment that reaches $0 at the end (standard amortization). Rates are assumptions, not quotes. Before tax and inflation.
People also ask
How much monthly income will 1 million generate?
At a 4% rate, $1 million generates about $3,333 a month ($40,000 a year) before tax. At the 5.00% a 5-year Treasury paid on October 14, 2026, interest only is about $4,167 a month, and at 3% it is $2,500. These are rate times balance divided by 12, before tax and inflation (Treasury par yield per the RLF MYGA vs CD Spread Index, October 14, 2026).
$1 million a year is how much a month?
A million dollars a year is $83,333 a month before tax ($1,000,000 divided by 12). If you mean a $1 million balance, it produces about $3,333 a month at a 4% rate. Checked October 15, 2026.
How much does a $1,000,000 annuity pay per month?
There is no single number. It depends on your age, whether payments are for life or a set period, whether a spouse is covered, and the rate in effect when you buy. Compare offers by payout rate, the annual payment divided by the amount paid in, the same test used in our pension lump sum versus annuity guide. The Foundation does not sell annuities.
Can I live off interest of 1 million?
At a 4% rate, $1 million produces about $40,000 a year, or $3,333 a month, before tax, without touching principal. Whether that is enough depends on your spending, Social Security and taxes. Interest rates change, so income from interest alone moves with them.
What income does $1,000,000 generate?
Roughly $2,500 to $4,200 a month from interest alone at 3% to 5%, or about $4,200 to $5,400 a month if you spend the balance down over 30 years at those rates. The 4% withdrawal rule starts near $3,333 a month and adjusts for inflation.
How long will $1 million last in retirement?
Withdrawing $50,000 a year from $1 million earning 4% lasts about 41 years; $60,000 a year lasts about 28 years, and $80,000 a year about 17 to 18 years, before inflation and taxes. Market losses early in retirement can shorten those numbers a lot.
Where the safe part of the $1 million goes is covered in alternatives to CDs.
Related
- How much income does $250k generate?
- When to claim Social Security
- Tax on retirement withdrawals
- Protecting savings from a crash
Sources: SSA delayed retirement credits; Investor.gov compound interest calculator; U.S. Treasury, daily par yield curve (October 9, 2026); Journal of Financial Planning, October 1994 (the 4% rule study). Checked October 10, 2026.