So you’ve got $4 million sitting in your retirement account, congratulations! But is $4 million enough to retire at 60? Read on to find out.

How Do The Numbers Work Out?

While it may seem like an obvious answer at first glance, it is a good idea to crunch the numbers to ensure that it will be enough for the entire duration of your retirement. 

We do that by first determining how long $4 million can last you. Based on a recent survey, Americans spend an average of $66,000 per year on retirement expenses, which include housing, food, transportation, clothing, health care, etc. 

If you were to spend $66,000 per year during your retirement and you already have $4 million saved up, your current retirement savings can last you for 60 years.

So by these numbers, $4 million is more than enough to retire at the age of 60 as from there, you’ve saved enough to live for another 60 years, at an average level of spending. In fact, you can even retire earlier than 60 with your current savings. 

Although this computation is reassuring, these values can also change depending on your lifestyle. For example, if you want to travel the world during your retirement, you’re looking at higher costs that can potentially deplete your retirement savings if you don’t manage them properly.

Here lies the importance of proper retirement planning. $4 million may be more than enough to cover the essentials of your day-to-day life during retirement.

But if you’re planning to add leisure activities that may be above your budget, you should crunch the numbers to determine how well they would fit in your financial capacity. 

Factors to Consider in Your Retirement Plan 

Using the numbers earlier, it is clear that $4 million is more than enough to cover essential living expenses.

But these are just average values that can change depending on your needs and lifestyle. Remember that there are a lot of expenses that come with turning 60, such as medical care, nursing, etc.

To help you properly allocate your $4 million, here are some things you need to consider. 

Health Expenses

Your health could either be your strong suit or the cause of your demise. As you navigate your 60s, you may come face to face with health issues that can cost you a lot of money.

Part of proper retirement planning is considering the potential health expenses that you might have during your retirement. 

You know well enough that you’re not getting any younger. Past complications may resurface or health risks brought about by your lifestyle or genetic origin may manifest out of nowhere.

So you need to set an allowance for your health care. This is both for long-term and out-of-pocket costs. 

On average, retired married couples can look at $285,000 in minimum for health care expenses. But for those who have other underlying conditions or health concerns, this value can easily double or triple. 

Even though you can’t predict the future, properly computing for healthcare expenses will help you allocate your $4 million properly and find out if it’s truly enough to cover all your expenses, especially the daunting costs of healthcare.

If you have health insurance, make sure to include it in your calculations.


Post-Retirement Goals

Are you planning on being a philanthropist? Do you want to travel the corners of the world? Sure, your age is not a problem, but your money might be.

Life, even at 60, could interest you in new hobbies, adventures, and other personal goals. Not considering these other desires and dreams until it is too late can prove detrimental.

In certain instances, not having the necessary savings can be the reason why you are unable to check off one of your post-retirement goals. Proper budget analysis can alleviate this issue.

Whether you see yourself owning land or starting a goodwill organization, make sure $4 million will be enough to cover your essential expenses, while still giving you enough to pursue these other desires of your heart.

This is the only true way to understand whether $4 million is enough to retire at 60 years old.

If you plan to travel often during your retirement, it’s another expense that you should be adding to your retirement plan.

A lot of people on the planet dream of making time for relaxation, or seeing the beautiful sites of the world during their retirement.

However, a recent study shows that Americans ages 55 and above only bring out a modest $3,000 plus for entertainment — at least according to an average statistic. 

While $4 million is a big value and at first glance, looks more than enough to settle travel expenses, you need to put it side by side with your other essential expenses. Some of these include healthcare, housing, and the like to properly budget your travel expenses and live a comfortable, happy life with $4 million post-retirement. 

Shelter and Dream Home

Many people are only able to buy their dream homes after retirement. If you are planning the same, then you have to recompute your expenses.

The average annual retirement expense of $66,000 does not cover the cost of a mortgage. So if you’re planning to buy your dream home after retirement, you’ll need to crunch the numbers to determine your unique expense. 

Starting a new life on a beautiful island with a standard home structure is ideal as well. If this tickles your fancy, you might want to browse some brochures of available land and property fit to your liking.

This phase will be a big step in your life and should not be left out from the list of factors that you need to think through when planning your retirement. 

Also worth considering is the location where you plan to live. Housing rates differ from one State and area to another. For example, some areas may only require an expense of $5,000 annually for housing, while other cities will demand an amount that’s 5 times that initial value.


Never overlook the impact of your taxes. Doing so is like choosing to be blinded by the factors that can haunt you later in your retirement years.

This usually feels like a burden for other individuals, but facing these taxes and understanding what they could do for your retirement helps you make sure you’re breaking free of future potential hindrances.

For instance, saving $4 million in a pre-tax account under an IRA or 401 (k) plan is different from saving $4 million in a Roth account under a 401 (k) plan or Roth IRA due to the impact of several taxes present during distribution.

If your retirement savings are on taxable accounts, then you’re looking at potential decreases in the $4 million you have saved up.

Every withdrawal from your retirement savings will cost you a hefty percentage of money to pay for taxes. So it’s important that you never underestimate the losses you may face after-tax deduction. 

Based on recent data, the average deductions for taxpayers above 65 are the following:

  • Single taxpayers – $14,250 total tax deduction
  • Married filing jointly and widows – $26,250 to $27,800 total tax deduction
  • Married filing separately – $12,550 to $13,900
  • Head of households – $18,800 to $20,500

It’s advisable to consult the help of a tax expert, especially one who has experience with retirement accounts and savings.

They can give you advice on how much you should withdraw annually to cover your retirement expenses and the best strategies to help you avoid or minimize tax on your $4 million. 

Existing Debts

Debt is one of the common aspects of savings and earnings that could hinder your retirement plan. Most people still have debts to settle after their retirement. So this is one expense that you’ll need to deduct from your allocated $4 million. 

If you have any outstanding mortgage, debt, or loan, it’s best to do your best to settle them before even thinking about retiring. But if you’re well in your 50s and your goal to retire at 60 is non-negotiable, the total value of your debts should be included in your retirement plan. 

Crunch the numbers and determine if $4 million will be enough to cover your daily expenses, tax deductions, health care expenses, as well as debts. It is imperative to determine how long $4 million will last you when considering these unique expenses.

Your goal is to make your $4 million in savings last you at least 30 to 40 years, which is not a difficult goal to attain with the value of retirement savings you currently have. 


Grandparents just love to spoil their grandkids. In fact, an average retiree spends over $2,000 annually for their grandchildren, whether it be for gifts, monetary donations, food, etc. If you have grandkids, this can also be another expense that you should consider. 

Also worth noting here is saving up after retirement for the legacy you will be leaving. If you have a family, you would want to make sure that you have assets to leave them after you pass. Ideally, set aside at least $295,000 as an inheritance allocation. 

Other Unexpected Expenses

While having a thorough retirement plan is a good thing to help you budget your $4 million to last you several years, you can’t control everything.

Life is unexpected and you never know what kind of curveballs will be thrown at you. So you should make sure that you’re not allocating funds in your retirement plan to the point that it leaves you with zero.

Inflation is also something to look out for. The value of your $4 million can significantly decrease over the years, depending on economic trends. Further, the cost of goods you need for your daily living may rise with inflation.

Make sure you are prepared for this by also inflating your estimates. Never compute based on exact amounts and give your values wiggle space to give way for inflation and other economic impacts that are beyond your control. 

Set aside a hefty sum of money annually for unexpected expenses. This should cover anything from sudden hospital bills, lending money to a loved one, inflation, etc.

The advisable allocation for unexpected expenses is 4% of your retirement savings. Since you have $4 million saved, you should set aside $160,000 for this purpose. 

A Computation of Your Retirement Expenses

The above factors may be a lot to take in, so let’s crunch the numbers to help you get started on your retirement plan. These cost values are based on the average expenses of retirees. Starting at your total savings of $4 million, let’s take a look at your potential retirement expenses. 

Retirement Bills and Annual Costs

Housing – $6,000 – $7,000 annually
Health care – $295,000 after tax annually 
Taxes – $14,240 to $20,5000 annually
Food – $6,599
Emergency expenses – $160,000 annually
Entertainment – $3,800 annually
Travel – $11,077 annually
Grandchildren – $2,562 annually 
Inheritance allocations – at least $295,000

It’s worth noting that these cannot reflect values that are 100% accurate for your unique financial situation. Different people have different goals, preferences, and lifestyles, which means that the expenses for every individual would also differ.

Although this gives you a good idea of what to expect, you should still make a separate computation based on your own values to come up with a more accurate estimate. 

$4 Million Doesn’t Seem Like Enough, What Should I Do?

After you’ve made a thorough computation of your expenses after retirement and you feel like $4 million is not enough to cover your unique expenses, you can conduct the following methods to save more money. 

  • Increase your contributions for your retirement savings in the remaining years before you turn 60.
  • Work during retirement or start a side hustle 
  • Delay your retirement to the age of 70. At this age, you can claim more monthly benefits from your Social Security. 


$4 million is a lot of money. And based on average retirement costs, you may be well on your way to comfortable retirement life.

As mentioned, $4 million is more than enough for your retirement and can last you up to 60 years. However, it’s important to remember that these numbers are only based on essential expenses. 

No two people have the same retirement costs. Depending on your health situation, post-retirement goals, housing preferences, etc., you’re in a position to either maximize or deplete your retirement savings.

Hence, you should undertake proper retirement planning to best allocate your $4 million throughout the duration of your retirement. 

Josiah Brown is a 20-year-old Entrepreneur and writer who is on a life-long journey of experiencing and learning.