When it comes to retirement, most people think you need at least a million dollars saved up to be able to live comfortably. But is that the case? In this guide, we will explore what it takes to retire on 2 million dollars and whether or not that is even possible. In addition, we will look at different scenarios and see how long it would take to retire on that amount of money. Keep reading to find out more!
- Can I Retire On $2 Million? Is It Enough Money?
- How Long Will $2 Million Last In Retirement?
- How To Make $2 Million Last A Lifetime In Retirement, Guaranteed.
- Social Security
- How To Retire On 2 Million Dollars, Immediately
- Can You Retire With 2 Million Dollars In 5 Years?
- Living Off the Monthly Interest On 2 Million Dollars
- Retire at 50 with $2 Million
- Retire at 55 with $2 Million
- Retire at 60 with $2 Million
- How Much Does $2 Million Payout?
- Why Annuities?
- Can A Couple Retire On 2 Million Dollars?
- Keeping Up With Inflation
- Things To Consider When Retiring
- Next Steps
- Frequently Asked Questions
- Retirement Income Guides
Can I Retire On $2 Million? Is It Enough Money?
You can retire on $2 million, but it will not be easy. First, you must carefully budget and invest your money to ensure you do not outlive your savings. With careful planning, you can retire comfortably on $2 million. However, if you are not careful with your finances, you could struggle to make ends meet in retirement.
To retire on $2 million, you must have a nest egg of at least that size. If you do not have enough saved up yet, you will need to continue working and saving until you reach your goal. Once you have reached your goal, you can start planning for retirement.
There are a few things you need to consider when planning for retirement. First, you must ensure you have enough saved to cover your costs. This includes your living expenses, healthcare costs, and any other expenses you may have in retirement.
It would help if you also considered how much income you would need in retirement. You will need enough income to cover your basic living expenses and have some left over for leisure and other activities.
Finally, you need to consider how you will generate income in retirement. For example, you may need to continue working part-time or look into other sources of income, such as pensions or investment earnings.
With careful planning, you can retire on $2 million. However, it will not be easy. You will need to budget carefully and invest your money wisely. If you are not careful with your finances, you could struggle to make ends meet in retirement.
How Long Will $2 Million Last In Retirement?
How long your $2 million will last in retirement depends on a few factors. First, it depends on how much income you will need to cover your basic living expenses. Other retirement income sources, such as a pension or investments, will also affect how long your $2 million will last.
Another factor that will affect how long your $2 million will last in retirement is inflation. If prices rise over time, your $2 million will not go as far as it would have if prices had remained the same.
Finally, your lifestyle in retirement will also affect how long your $2 million will last. If you plan to travel and live a luxurious lifestyle, your $2 million will not last as long as it would if you lived a more modest lifestyle.
Assuming you will need $80,000 per year to cover your basic living expenses, your $2 million would last for 25 years if there was no inflation. However, if inflation averaged 3% per year, your $2 million would only last for 20 years.
If you plan to live a more luxurious lifestyle in retirement, your $2 million will not last as long. For example, if you plan to travel the world and stay in 5-star hotels, your $2 million would only last for ten years.
To sum it up, how long your $2 million will last in retirement depends on your lifestyle and how much income you need to cover your basic living expenses. If you are careful with your spending, your $2 million could last many years. However, your $2 million may not last as long if you have a lavish lifestyle.
How To Make $2 Million 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 55-year-old person purchases a $2 million annuity with a lifetime income rider and wants to retire in 10 years at age 65, that person would receive roughly $20,242 per month for the rest of their life. If you live for 30 years in retirement, you will receive $7.3 million in payments. When the annuity owner dies, the remaining balance passes down to beneficiaries in a lump sum.
Social Security
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 $2,000,000 in savings. The data will be based on:
- Social Security Benefits will be based on couples at $3,086 total.
- $2,000,000 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 2 Million Dollars, 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 $1,000,000 Annuity Pay Per Month?
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $10,584 | $13,670 |
| 65 | $3,086 | $11,216 | $14,302 |
| 70 | $3,086 | $12,250 | $15,336 |
Can You Retire With 2 Million Dollars 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 $2,000,000 annuity, your monthly income for life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $16,022 | $19,108 |
| 65 | $3,086 | $16,918 | $20,004 |
| 70 | $3,086 | $18,310 | $21,396 |
Living Off the Monthly Interest On 2 Million Dollars
Some retirees like to withdraw interest from a fixed interest savings account like a fixed annuity or CD. For example, the interest on two million dollars is $501,845.11 over seven years with a fixed annuity, guaranteeing 3.25% annually.
Find all the current fixed annuity rates here.
Retire at 50 with $2 Million
The following are guaranteed income amounts for the rest of your life if you purchase an annuity with a lifetime rider at age 50. These amounts do not include Social Security.
| Annuity Purchase Date | Annual Income At 50 |
|---|---|
| Age 40 | $198,419 |
| Age 45 | $140,155 |
| Age 50 | $107,500 |
Retire at 55 with $2 Million
The following are guaranteed income amounts for the rest of your life if you purchase an annuity with a lifetime rider at age 55. These amounts do not include Social Security.
| Annuity Purchase Date | Annual Income At 55 |
|---|---|
| Age 40 | $236,331 |
| Age 45 | $214,052 |
| Age 50 | $151,198 |
| Age 55 | $109,600 |
Retire at 60 with $2 Million
The following are guaranteed income amounts for the rest of your life if you purchase an annuity with a lifetime rider at age 60. These amounts do not include Social Security.
| Annuity Purchase Date | Annual Income At 60 |
|---|---|
| Age 40 | $267,769 |
| Age 45 | $242,527 |
| Age 50 | $219,664 |
| Age 55 | $167,337 |
How Much Does $2 Million Payout?
The following table will estimate how much guaranteed income a $2,000,000 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 | $267,769 | |||
| 45 | $296,109 | |||
| 50 | $219,664 | $327,870 | ||
| 55 | $167,337 | $242,913 | $356,211 | |
| 60 | $122,000 | $185,458 | $268,968 | |
| 65 | $134,600 | $203,013 | $292,217 | |
| 70 | $147,000 | $219,718 | $337,829 | |
| 75 | $153,200 | $241,558 |
Why Annuities?
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
Can A Couple Retire On 2 Million Dollars?
Yes, $2 million should be enough to retire. Annuities provide an income option to pay a guaranteed amount each month for two lives. Once the first spouse dies, the annuity will continue to pay the same or a reduced amount for the remaining surviving spouse’s lifetime.
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
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.
Next Steps
So is $2 million enough to retire? If you want to retire comfortably for the rest of your life (guaranteed), annuities are the only way.
Request a quote from us today and find out how much lifetime income you could receive from $2 million. With an annuity, you can be sure that you’ll have a guaranteed income for as long as you live – no matter what happens in the stock market or with Social Security.
So what are you waiting for? Contact us today, and let’s get started on your retirement plan!
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Frequently Asked Questions
Can I retire at 40 with $2 million?
Yes, you can retire at 40 with 2 million dollars. At age 40, an immediate annuity will provide a guaranteed income of $110,052 annually for a life-only payout, $107,484 annually for life with ten years certain payout, and $106,548 annually for life with 20 years certain payout. Payouts change frequently and vary by state.
Can I retire at 45 with $2 million?
Yes, you can retire at 45 with 2 million dollars. At age 45, an immediate annuity will provide a guaranteed income of $114,360 annually for a life-only payout, $112,104 annually for life with ten years certain payout, and $110,544 annually for life with 20 years certain payout. Payouts change frequently and vary by state.
Can I retire at 50 with $2 million?
Yes, you can retire at 50 with 2 million dollars. At age 50, an annuity will provide a guaranteed income of $107,500 annually, starting immediately for the rest of the insured’s lifetime. The income will stay the same and never decrease.
If the annuitant selected the increasing income option, they would receive $84,000
annually initially, with the income amount increasing over time to keep up with inflation.
Either lifetime income option will continue to pay the annuitant even after the annuity has run out of money. At the time of the annuitant’s death, the designated beneficiary will inherit the remainder of the annuity.
Can I retire at 55 with $2 million?
Yes, you can retire at 55 with 2 million dollars. At age 55, an annuity will provide a guaranteed income of $112,500 annually, starting immediately for the rest of the insured’s lifetime. The income will stay the same and never decrease.
If the annuitant selected the increasing income option, they would receive $93,000 annually initially, with the income amount increasing over time to keep up with inflation.
Either lifetime income option will continue to pay the annuitant even after the annuity has run out of money. At the time of the annuitant’s death, the designated beneficiary will inherit the remainder of the annuity.
Can a couple retire on 2 million dollars?
Yes, a couple can retire on two million dollars. Annuities can provide a guaranteed income for both spouses’ lifetimes. After researching 326 annuity products from 57 insurance companies, our data calculated that $2,000,000 would generate $107,400 annually starting immediately if both spouses were age 60, $118,800 if both spouses were age 65, and $124,800 if both spouses were age 70.