It’s no secret that people are living longer than ever before. In fact, according to the Social Security Administration, a man who reaches age 65 today can expect to live, on average, until age 84. Likewise, a woman turning 65 can expect to live until age 86. That’s a long time to enjoy your retirement savings! So if you’re looking to retire at 60 with $500k saved up, you’re in good shape – but you’ll still need to make some intelligent choices about how to make that money last. In this guide, we’ll discuss how to make your $500k last a lifetime in retirement!
- Can I Retire At 60 With $500k? Is It Enough Money?
- How Long Will $500,000 Last In Retirement?
- How To Make $500k Last A Lifetime In Retirement, Guaranteed.
- How To Retire At 60 With 500K, Starting Immediately
- How To Retire on $500,000 At Age 60 (Planning Ahead)
- Living Off the Interest on $500,000
- Why Use Annuities For Retirement?
- Keeping Up With Inflation
- Things To Consider When Retiring
- Next Steps
- Frequently Asked Questions
- Retirement Income Guides
- Request A Quote
Can I Retire At 60 With $500k? Is It Enough Money?
The quick answer is “yes”! With some planning, you can retire at 60 with $500k. Keep in mind, however, that your lifestyle will significantly affect how long your savings will last. If you’re content to live modestly and don’t plan on significant life changes (like travel or starting a business), you can make your $500k last much longer.
How Long Will $500,000 Last In Retirement?
Again, this depends on your lifestyle and how you plan to spend your time in retirement. If you’re willing to live modestly, you can make your savings last 20 years or more. However, if you have expensive tastes or plan to travel extensively, your $500k may only last for a few years.
How To Make $500k Last A Lifetime In Retirement, Guaranteed.
The only way to guarantee you don’t run out of money in retirement is to purchase an annuity with a lifetime income rider. This will guarantee that you receive a certain amount of money each month for the rest of your life, no matter how long you live.
For example, if a 50-year-old person purchases a $500,000 annuity with a lifetime income rider and wants to retire in 10 years at age 60, that person would receive roughly $54,916 per year for the rest of their life. If you live for 30 years in retirement, you will receive over $1.6 million in payments. When the annuity owner dies, the remaining balance passes down to beneficiaries in a lump sum.
How To Retire At 60 With 500K, Starting Immediately
The average monthly Social Security Income check-in in 2021 is $1,543 per person. In the tables below, we’ll use an annuity with a lifetime income rider coupled with SSI to give you a better idea of the income you could receive from $500,000 of retirement savings. The earliest you can start collecting Social Security is age 62.
The table below illustrates how much monthly income can be generated immediately with annuity payments and Social Security Income (starting at age 62).
ADDITIONAL READING: How Much Does A $500,000 Annuity Pay?
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 60 | N/A | $2,542 | $2,542 |
| 62 | $3,086 | $2,750 | $5,836 |
How To Retire on $500,000 At Age 60 (Planning Ahead)
The following guaranteed income amounts are annual and do not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At Age 60 |
|---|---|
| Age 40 | $66,942 |
| Age 45 | $60,632 |
| Age 50 | $54,916 |
| Age 55 | $41,834 |
| Age 60 | $30,500 |
Living Off the Interest on $500,000
Some retirees like to withdraw interest from a fixed interest savings account like a fixed annuity or CD. For example, the interest on five hundred thousand dollars is $125,461 over seven years with a fixed annuity, guaranteeing 3.25% annually.
Find all the current fixed annuity rates here.
Why Use Annuities For Retirement?
Annuities are the only retirement plan in the United States that provides a guaranteed income for a lifetime, even if the plan runs out of money. As a result, the annuity is a money management tool in retirement, taking all the guesswork in budgeting your day-to-day expenses. By utilizing this financial plan, a retiree will never have to worry about running out of money.
Annuity Basics
Understanding Lifetime Income Riders
Keeping Up With Inflation
Some annuities offer a guaranteed lifetime income with the ability to increase regularly to keep up with inflation. Once the income increases, the payment amount is locked in and can never go backward from that point forward.
Things To Consider When Retiring
- Inflation is rising whether you like it or not. So plan accordingly or decrease your lifestyle.
- Per the U.S. Department of Health and Human Services, you have a 70% chance of going into a Nursing Home, Assisted Living Facility, or Home Health Care. So buy long-term care insurance now.
- There is a 100% chance you will die, buy affordable life insurance, or at the minimum, burial insurance for funeral expenses.
Next Steps
If you’re looking to retire at 60 with $500k, the best thing you can do is start planning now. Evaluating your current lifestyle and expenses is a great place to start. Then think about ways to cut costs and save more money. Finally, consider purchasing an annuity with a lifetime income rider. With some planning, you can make your $500k last a lifetime! Contact us for a quote today – we can help get you started on the right path to retirement security!
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Frequently Asked Questions
Can I retire at 60 with $500k?
Yes, you can retire at 60 with five hundred thousand dollars. At age 60, an annuity will provide a guaranteed income of $30,500 annually, starting immediately for the rest of the insured’s lifetime. The income will stay the same and never decrease.
Retirement Income Guides
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