How Much Can I Withdraw from $1 Million in Retirement?

$39,000 a year. That's the short answer to "how much can I withdraw from $1 million in retirement?" if you want strong odds that the money lasts 30 years. It comes from Morningstar's latest research, which puts the safe starting withdrawal rate at 3.9%. That works out to roughly $3,250 a month before taxes, with yearly raises for inflation.

The more useful part is what sits behind that number. 3.9% isn't a promise. It's the rate that kept money in the account in 90% of simulated futures. So the real question is how much you can withdraw at odds you're comfortable with, given your age, your spending and how long you might live.

Let's work through it.

How much can you withdraw from $1 million in retirement? The numbers side by side

Most articles stop at "$40,000 a year." Here's how the main research-backed rates turn into dollars on a $1 million portfolio:

A few notes so you read the table correctly:

• These are starting amounts. Under the 4% rule and Morningstar's method, you take the first-year dollar figure and then raise it each year for inflation. You don't recalculate 4% of whatever's left.
• They're pre-tax. More on that below.
• They don't include Social Security or pensions. Those come on top.

The Motley Fool sets out the same starting point: $40,000 a year at 4%, or $30,000 at 3% if you want a bigger margin.

Where the 3.9% figure comes from

Morningstar's annual State of Retirement Income report looks at how much a retiree can withdraw, adjust for inflation, and still have money left after 30 years. Its finding: a 3.9% starting rate leaves money in the account in 90% of simulated outcomes, assuming a portfolio of 30% to 50% stocks. That's up from 3.7% the year before.

Source: Morningstar, The State of Retirement Income for 2026 (published December 2025); see also What's a Safe Retirement Withdrawal Rate for 2026?

The method is the important part. Morningstar doesn't ask what an average year of returns would support. It asks how often the money survives across many possible market paths. That's a Monte Carlo test: run thousands of plausible futures, some good, some bad and some terrible, and count how many end with money left.

"90% success" also means about 1 in 10 of those futures ran short. That's not a reason to panic. It's a reason to keep watching your plan rather than set it once and forget it.

Why the experts disagree: 3.9% vs. 4.7%

In July 2026, Bill Bengen, the financial planner who created the 4% rule, said his updated research supports a worst-case historical rate of 4.7%. On $1 million, that's $8,000 a year more than Morningstar's figure. (WTOP, July 2026)

They're both serious researchers, so why don't they agree? Mostly because they measure different things:

• History vs. projections. Bengen looks back at historical data going to 1926 and finds the highest rate that survived the worst stretch on record. Morningstar models a range of possible futures based on its expectations for markets today.
• Different portfolios. Bengen uses a broader mix of assets. Morningstar's 3.9% assumes a fairly conservative 30–50% stock allocation. (The Daily Upside)
• Different definitions of "safe." "Survived every historical period" and "survived 90% of simulated futures" are different tests.

Neither number is wrong. Each answers a slightly different question. Your own numbers will differ from both, which is why it's worth testing them directly.

Five things that change your number

1. How long your retirement lasts

The 3.9% figure assumes 30 years. If you retire at 60 and live to 95, that's 35 years, and longer horizons push the safe rate down. Each extra year is another year the portfolio has to fund.

This is a bigger risk than many people expect. The Social Security Administration estimates that about one out of every three 65-year-olds may live to at least 90. A plan that ends at 85 is quietly betting you won't be one of them. (Source: Social Security Administration, Retirement Information for Medicare Beneficiaries, 2026)

That's why the plan you build at Monte Climb runs to age 95 by default, and you can push it further.

2. The order your returns arrive in

This is sequence-of-returns risk, and averages hide it.

Picture two retirees, each with $1 million, each withdrawing the same amount, each earning the same average return over 30 years. One gets a bad market in years one through three. The other gets it in years 25 through 27. The first retiree sells investments at low prices early on, while the portfolio is at its largest, and those losses never fully recover. The second has years of growth behind them by the time the bad patch arrives.

Same average, very different outcomes. A single projection at "7% a year" can't show you that. A simulation across many market paths can. (Kiplinger)

3. Whether you can be flexible

If you can cut spending in bad years, you can start higher. Morningstar finds that flexible strategies can support a starting rate of about 5.7%, and close to 6% if you accept spending that rises and falls with the market. (Kiplinger; Morningstar)

One well-known approach is the Guyton-Klinger "guardrails" method. Here's how the rules typically work on $1 million:

• Start: withdraw, say, $50,000 (a 5% rate).
• Cut trigger: if markets fall far enough that your withdrawal is more than 20% above your starting rate (above 6% of the current balance), cut spending by 10%.
• Raise trigger: if markets rise enough that your withdrawal is more than 20% below your starting rate (under 4%), give yourself a 10% raise.

(The Daily Upside)

The trade-off is plain. You get more income up front, and in return you accept that some years' income may be lower.

4. Taxes and which accounts hold the money

$40,000 from a traditional 401(k) or IRA is not $40,000 you can spend. Those withdrawals are taxed as ordinary income. Qualified Roth withdrawals generally aren't. Money in a taxable brokerage account falls in between, depending on gains.

So if your $1 million sits mostly in pre-tax accounts, your spendable income at a 3.9% withdrawal will be noticeably lower than $39,000. Plan in after-tax dollars.

5. Health care

Fidelity estimates that a 65-year-old retiring in 2025 will spend $172,500 on Medicare premiums, deductibles and prescriptions over retirement. That figure doesn't include long-term care. (Source: Fidelity Investments, 2025 Retiree Health Care Cost Estimate, July 2025)

That's a real share of a $1 million portfolio. It also tends to grow as you age, so it isn't a flat cost spread evenly across the years. The Monte Climb engine charges Medicare premiums and income-based surcharges year by year instead of using a single flat guess.

What happens if you withdraw more?

Bigger withdrawals shorten the runway, and the effect speeds up. In one Motley Fool scenario, a $1 million portfolio withdrawing 6% a year runs out in about 25 years. (Motley Fool)

For someone retiring at 65, that means the money could be gone around 90. That's exactly the age a third of 65-year-olds may reach.

Don't confuse safe withdrawals with RMDs

Some people searching this question actually mean the IRS minimum. These are two separate things:

• A safe withdrawal rate is the most you can sensibly spend while keeping good odds that the money lasts.
• A required minimum distribution (RMD) is the least you must withdraw from traditional IRAs and 401(k)s once you reach age 73. (Motley Fool; CBS News)

An RMD tells you what has to come out of the account and get taxed. It doesn't tell you what's safe to spend. If your RMD is more than you need, you can reinvest the extra in a taxable account. You just can't leave it in the tax-deferred account.

So what's your number?

Here's the honest summary for $1 million:

• About $39,000–$40,000 a year is a well-supported starting point for a 30-year retirement with fixed, inflation-adjusted spending.
• Less if you retire early, expect a long life, or hold mostly pre-tax money.
• More if you can cut spending in bad years, or if Social Security and a pension cover a large share of your costs.

The table above is a starting point. Your own plan is the real answer. EBRI's 2025 Retirement Confidence Survey found that 48% of workers have never estimated how much they'll need each month in retirement. (Source: EBRI/Greenwald, Retirement Confidence Survey 2025, Fact Sheet 3) The first step is putting a number down.

Run your own odds

You can enter your age, your savings and your monthly spending, and we'll run them through 1,000 simulated futures to show how many stay funded. It runs in your browser, and nothing is saved until you choose to save it. If you want to dig deeper, ask William, our AI planner, whether you're on track, whether you could retire at 62, or what spending level is sustainable. He shows his work.

It's planning software, not advice. The answer is a probability, not a promise, and that's more useful than a single number that pretends to be certain.

Show my answer → see how your savings hold up across 1,000 futures

Frequently asked questions

How much can I withdraw from $1 million in retirement each year?

About $39,000 to $40,000 in the first year, then adjusted for inflation. Morningstar's research puts the safe starting rate at 3.9%, which kept money in the account in 90% of simulated futures over 30 years. The classic 4% rule gives $40,000.

Is the 4% rule still valid in 2026?

Roughly, yes, though experts disagree on the exact figure. Morningstar's latest research puts the safe starting rate at 3.9%, while Bill Bengen, who created the 4% rule, now cites a worst-case historical rate of 4.7%. They use different data, portfolios and definitions of 'safe.'

How long will $1 million last if I withdraw 6% a year?

In one Motley Fool scenario, a $1 million portfolio withdrawing 6% a year runs out in about 25 years. For someone retiring at 65, that could mean running out around age 90.

Are withdrawals from $1 million taxed?

It depends on the account. Withdrawals from traditional 401(k)s and IRAs are taxed as ordinary income, so $40,000 withdrawn is less than $40,000 to spend. Qualified Roth withdrawals generally aren't taxed.

Is a required minimum distribution the same as a safe withdrawal rate?

No. An RMD is the minimum you must take from traditional IRAs and 401(k)s starting at age 73. A safe withdrawal rate is the most you can sensibly spend while keeping good odds that your money lasts.