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Retiree scenario with $1.2 million 401(k) targets $81,600 income
The example assumes a 4% first-year 401(k) withdrawal plus $2,800 monthly Social Security, totaling $81,600 annually, and notes claiming at 64 cuts benefits by 20% versus full retirement age.
A Yahoo Finance retirement example models how an individual age 64 with a $1.2 million 401(k) and a $2,800 monthly Social Security benefit could build retirement income. It estimates annual income of $81,600, using broad guideline assumptions for both withdrawals and benefits.
The scenario says Social Security benefits could be protected against inflation because payments are indexed to a cost-of-living measure. It also highlights claiming timing, stating that taking benefits at 64 instead of full retirement age 67 results in a 20% lower monthly amount.
For the 401(k) drawdown, the article applies the commonly cited 4% guideline, withdrawing 4% of the account balance in the first year and increasing that amount annually by the inflation rate. In this case, it estimates a $48,000 first-year 401(k) withdrawal and combines it with $33,600 in Social Security to reach the $81,600 income target.