15 Smart Strategies to Retire Comfortably With $1 Million

Whether you are approaching retirement or already retired with a nest egg of $1 million, making that money last for the rest of your life is a top consideration. No one wants to accidentally run out of money in their final years.

Luckily, it's possible to retire comfortably with $1 million, especially if you are strategic about tapping those assets. Here are some ways to create a stress-free retirement with a net worth of $1 million.

After devoting much of your life to saving and investing, retirement is the time to finally draw down funds. That raises the question of how much to spend.

If possible, limit withdrawals to no more than 4% of your total portfolio value in a given year, with adjustments for inflation as you go. Research has shown that this is a good way to reduce the risk of running out of cash over a 30-year period.

Regardless of how much money you have, spending funds in a tax-efficient way can make a big difference.

Your withdrawal strategy can either raise or lower your tax bill. For example, when you withdraw funds from a Roth IRA, you do not owe taxes on that income. But when you withdraw funds from a traditional IRA or 401(k), taxes are due.

If possible, work with a financial professional to determine the most tax-efficient withdrawal strategy for your situation.

Moving to a state with a lower tax burden can help you stretch your dollars further.

For example, there is no income tax in Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. (Note, however, that New Hampshire does tax investment earnings.)

Meanwhile, there is no state sales tax in Alaska, Delaware, Montana, New Hampshire, or Oregon.

If you want to lock in a steady income stream with your $1 million, consider using a portion to buy an immediate annuity.

Once you lock in the purchase, you'll start receiving a monthly check from the company that sold you the annuity.

Annuities have pros and cons, so investigate before you take the leap. But for those who like the idea of getting a regular check to live on, an annuity represents a worthwhile option.

Some retirees like to purchase dividend-paying stocks because it provides them with a steady stream of dividend income that is taxed at favorable rates.

Of course, investing in any stock comes with risk, and dividend-paying stocks are not always the best option for everybody. So, you might want to consult with a financial advisor to learn whether this is the right option for you.

If you have $1 million, you'll need to keep the funds hard at work to make sure the money lasts throughout retirement. This means making the most of your savings.

Making a switch to a high-yield savings account can help you harness the power of a higher interest rate when growing your pile of cash.

Treasury bonds offer interest payments at predetermined rates and terms. The U.S. federal government backs these bonds, which makes them ultra-safe.

Although this option might offer lower potential returns than the stock market, the reduced level of risk can be suitable for some retirees.

Retirees typically dial down the risk in their portfolio by reducing their exposure to stocks. However, it can be wise to keep at least some money in the stock market.

Keeping some money in the market gives it a chance to grow throughout a retirement that could potentially span decades. This is another example of an area where you might want to consult with a financial professional when crafting your strategy.

Debt acts like a drain on your financial resources. Each month that you have to pay down debt is another lost opportunity to save.

When possible, try to get out of debt ahead of schedule. Eliminating debt can give you more freedom during your retirement years and swell the size of your nest egg.

Cutting back on spending is one of the easiest and safest ways to make retirement funds last.

Some possible ways to spend less include relocating to an area with a lower cost of living, taking advantage of senior discounts, and shopping around and comparing quotes so you can save money on car insurance.

By waiting to file for Social Security benefits, you can increase the size of your monthly benefit checks. The size of your check will increase for each year you wait up until the age of 70.

Although you'll have to find a way to make ends meet if you choose this strategy, the significant bump to your income may be well worth the wait.

Even if you've left your career behind, you can still tap into a new source of income. In fact, retirement is a great time to try your hand at new income-earning opportunities.

For example, it might be the perfect time to start a business. Or, try to create a more modest side hustle.

If you don't want to start something on your own, consider picking up a part-time job. A small amount of money coming in can help you offset some expenses and allow your retirement fund to grow.

If you have cash on hand, buying rental properties can help you create a new income stream.

Real estate investing isn't always passive, as landlords often have to do a lot of work. But if you don't mind the management side of things, investing in real estate presents a potentially lucrative opportunity.

If you are sitting on a sizable amount of home equity, downsizing to a smaller home could help you free up some of those funds to finance your retirement.

Of course, downsizing comes with its own challenges. But if you pull it off, you can use the proceeds from the sale to boost retirement savings for the years ahead.

If you aren't sure about the best strategy for your money, working with a competent professional can help you make the most of your funds.

Many experts recommend working with a fee-only advisor who can guide you through financial options.

As you map out your retirement plan, getting familiar with your finances is critical.

First, recognize the accomplishment of saving $1 million. Then, get creative about how you plan to make the most of your funds.