Personal Finance

We're Retiring in a Decade and Have $4M Invested. What's the Best Move for Preserving It?

Maurie Backman

Published: February 23, 2025 11:12 am

A recent AARP survey found that 20% of Americans ages 50 and over have no retirement savings. So if you’re about a decade away from retirement and already have $4 million to your name, you’re in great shape.

This especially holds true because, conceivably, you shouldn’t need to touch that money for the next 10 years. Even if you don’t add to it, if it’s invested, it can continue to grow until you need to use it.

But that doesn’t mean you shouldn’t be careful with your $4 million in savings. You’ve no doubt worked hard to amass that nest egg, and you should want it to last as long as you need it to.

The good news is that with proper planning, you can make it so your savings don’t run out. Here’s how.

Focus on income-producing assets

During retirement, it’s a bad idea to stop investing in stocks completely. You need some stocks in your portfolio to continue generating growth. But it’s also a good idea to focus on income-producing assets — namely, dividend stocks, real estate investment trusts, and bonds.

The reason these investments are valuable in retirement is that they’re a hedge against a market downturn and an income source all rolled into one. If your portfolio take a hit during a market event, for example, and you can’t liquidate assets for money without locking in losses, you may instead be able to live off of your dividend or interest income for a while.

Come up with a safe withdrawal rate for your savings

Financial experts have long recommended the 4% rule for managing retirement savings. The rule has you withdrawing 4% of your savings balance your first year of retirement and then adjusting future withdrawals to match the rate of inflation.

Following the 4% rule could help your savings last for 30 years. But that’s not guaranteed. And you may also have a different timeline in mind. So a better bet is to work with a financial advisor to come up with a safe withdrawal rate for you.

That rate should hinge on factors that include:

• Your expenses and near-term needs
• The setup of your portfolio
• Your life expectancy, which you can probably only guess at, albeit in an educated fashion

It’s also okay to tweak your withdrawal rate as retirement chugs along. Doing so gives you more flexibility, which is something the 4% rule lacks.

Maximize your Social Security

The more money Social Security pays you each month in retirement, the less money you might have to take out of your savings to cover ongoing expenses. So it makes sense to try to lock in the highest monthly benefit possible. And there’s a simple way to do that.

If you delay your Social Security claim past full retirement age (FRA), you’ll boost your monthly benefits by 8% every year you do that, up until you turn 70. And any increase you lock in will remain in effect for the rest of your life, thereby guaranteeing you a higher income stream.

Now some people can’t manage to delay their Social Security because they’re unable to work past FRA and can’t cover expenses without those benefits. But if you’ve amassed $4 million, you’re in a different boat.

In that case, you can afford to take money out of your savings while you hold off on Social Security. And if you can do so at a moderate pace, it could work to your financial advantage on a long-term basis. However, this is a strategy best discussed with a financial advisor who can help you weigh the pros and cons of tapping savings early versus claiming Social Security.