RE: What about investing the $2 million in a diversified portfolio that earns, say, 4% annually? Won’t that give you $80,000 without withdrawing any principle at all?
As long as you are not going to lose sleep over the huge swings and the ups and downs of the markets ( e.g. the downs of the mortgage crisis ), then have at it.
Most retirees do not have the stomach for this and would prefer steady, predictable income.
If you are really worried, you can live in retirement only only part of your income and save cash.
I am retired, and I am only spending about 60% of my income. This gives you a huge cash cushion.
Lost that $2 million “nest egg” in the 2008 between the stock market crash and the housing market collapse. Lost my job at the same time. Now 67 and working BUT retiring at the end of the year. No $2 million though but enough to live “comfortably” on SS and the little that’s in the bank.