People ask a common question as they get closer to retirement age: how much money do I need to have saved up to retire? Of course, the answer depends on various factors, including your lifestyle and how much money you expect to receive from Social Security and other sources. This guide will walk you through the steps you need to take to calculate if you can afford to retire at 60 with $750K.
- How to Retire on $750,000
- How much income will I receive if I retire on $750,000 at age 60?
- How Much Income Does $750,000 Annuity Generate?
- Why Use Annuities For Retirement?
- Keeping Up With Inflation
- Things to consider when Retiring
- Conclusion
- Find Out How Much Income Your $750,000 Will Provide In Retirement
- Frequently Asked Questions
- Retirement Income Guides
How to Retire on $750,000
Can I retire on $750k plus Social Security? Yes, you can! The average monthly Social Security Income check-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 estimate better the income you could receive off a $750,000 in savings. The data will be based on:
- Social Security Benefits will be based on couples at $3,086 total.
- $750,000 annuity with an income rider providing a monthly income for life.
- The starting point will be age 62 since this is the earliest age to collect SSI.
How to Retire on 750K, Starting Immediately
The table below illustrates how much monthly income can be generated immediately with a combination of annuity payments and Social Security Income (SSI).
ADDITIONAL READING: How Much Does A $500,000 Annuity Pay?
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $3,281 | $6,367 |
| 65 | $3,086 | $3,594 | $6,680 |
| 70 | $3,086 | $3,906 | $6,992 |
How to Retire on 750k in 5 Years
The table below illustrates how much monthly income can be generated in 5 years with a combination of annuity payments and Social Security Income (SSI). If you retire in 5 years on a $750,000 annuity, your monthly income for life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $4,781 | $7,867 |
| 65 | $3,086 | $5,100 | $8,186 |
| 70 | $3,086 | $5,631 | $8,717 |
How much income will I receive if I retire on $750,000 at age 60?
The following guaranteed income amounts are annual and do not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At Age 60 |
|---|---|
| Age 40 | $79,035 |
| Age 45 | $71,245 |
| Age 50 | $66,539 |
| Age 55 | $49,524 |
How Much Income Does $750,000 Annuity Generate?
The following table will estimate how much guaranteed income a $750,000 annuity will pay out annually for the rest of a person’s life.
| Age | Immediately | In 5 Years | In 10 years | In 20 Years |
|---|---|---|---|---|
| 40 | $79,035 | |||
| 45 | $88,935 | |||
| 50 | $66,539 | $97,536 | ||
| 55 | $49,524 | $73,517 | $108,247 | |
| 60 | $39,375 | $57,358 | $80,015 | |
| 65 | $43,125 | $61,200 | $87,666 | |
| 70 | $46,875 | $67,575 | $105,813 | |
| 75 | $50,625 | $79,262 |
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.
Use an annuity calculator to understand better the retirement income generated.
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.
Example
A 40-year-old purchases a $500,000 annuity with a lifetime income rider to retire at age 60. At age 60, the lifetime income may be guaranteed $52,690 initially but hypothetically increases to $151,782 by age 67. Once the income has increased to $151,782 annually, this payment is locked in and can never go below $151,782 in the future.
On the other hand, a performance-based annuity may hypothetically generate an income of $190,674 a year for life starting at age 60, increasing to $317,305 a year by age 70. Once the income has increased to $317,305 annually, this payment is locked in and can never go below $317,305 in the future.
Things to consider when Retiring
- If you can’t afford to lose money, invest your savings without the risk.
- 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.
If you are close to transitioning to retirement, check our Retirement Planning Guide.
If you are not close to transitioning to retirement, check out our Guaranteed Retirement Income Guide.
Conclusion
Request a quote to determine how much income $750,000 will provide you in retirement. Annuities are the only financial plan in the United States that offer a guaranteed lifetime income, regardless of how the investment performs. This makes them an incredibly safe and secure way to manage your finances during retirement. Contact us today to learn about annuities and request a quote for your specific situation. We would be happy to help!
Find Out How Much Income Your $750,000 Will Provide In Retirement
Frequently Asked Questions
Can I retire at 60 with $750k?
Yes, you can retire at 60 with five hundred thousand dollars. At age 60, an annuity will provide a guaranteed income of $39,375 annually, starting immediately for the rest of the insured’s lifetime. The payment will stay the same and never decrease.
How Much Social Security Will I Get At 62?
If Social Security Benefits are elected at age 62, the wage-earner will receive roughly 70% of their full benefits. The spouse will receive a 35% reduction of their maximum benefit.
Retirement Income Guides
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- How to Retire on 1 Million Dollars.
- How to Retire on $200K.
- How Much Does a $100,000 Annuity Pay Per Month?
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