How To Retire on 1 Million Dollars

Shawn Plummer

CEO, The Annuity Expert

This guide will show you how to retire on 1 million dollars, step-by-step. In addition, we’ll provide estimates on your retirement income at different age brackets.

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.

Use an annuity calculator to get a better idea of the retirement income generated.

This guide will answer the following questions:

  • Can I retire with $1,000,000?
  • Can I retire with 1 million dollars at 55?
  • Can I retire at 60 with 1 million dollars?
  • How to retire in 20 years with $1,000,000?
  • Can I retire at 62 with $1,000,000?
  • How much guaranteed income would I receive if I invest 1 million dollars?
  • Should I buy an annuity at age 40?
  • What is the best age to buy an annuity?

How to Retire on One Million Dollars

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 provide you a better idea of the income you could receive off a $1,000,000 in savings. The data will be based on:

How to Retire on 1 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?

AgeSSIAnnuityTotal
62$3,086$4,320$7,406
65$3,086$4,721$7,807
70$3,086$5,133$8,219
Total = Monthly Income for Life

How to Retire on 1 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 $1,000,000 annuity, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,086$6,552$9,638
65$3,086$7,147$10,233
70$3,086$7,743$10,829
Total = Monthly Income for Life

How to Retire on 1 Million Dollars in 20 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 20 years on $1,000,000, your monthly income for life would be:

AgeSSIAnnuityTotal
42$3,086$9,233$12,319
45$3,086$9,900$12,986
50$3,086$13,171$16,257
Total = Monthly Income for Life

How To Retire On $1 Million By Age

The following guaranteed income amounts are on an annual basis and do not include Social Security Benefits.

Retire At Age 55 With $1 Million.

Annuity Purchase DateAnnual Income At 55
Age 40$82,227
Age 45$81,578
Age 50$61,249
Age 55$47,000

Retire At Age 60 With $1 Million.

Annuity Purchase DateAnnual Income At 60
Age 40$105,380
Age 45$94,994
Age 50$90,190
Age 55$66,032

Retire At Age 65 With $1 Million.

The following guaranteed income amounts are on an annual basis and do not include Social Security Benefits.

Annuity Purchase DateAnnual Income At 65
Age 40$129,183
Age 45$118,580
Age 50$109,515
Age 55$100,212

Living Off Interest on a 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 one million dollars is $250,922.56 over 7 years with a fixed annuity, guaranteeing 3.25% annually.

Find all the current fixed annuity rates here.

How Much Does $1 Million Payout?

The following table will provide an estimate of how much guaranteed income a $1,000,000 annuity will payout, annually, for the rest of a person’s life.

AgeImmediatelyIn 5 YearsIn 10 yearsIn 20 Years
40$105,380
45$118,800
50$88,719$130,048
55$65,724$100,340$144,330
60$52,500$76,478$106,686
65$57,500$81,600$116,889
70$62,500$90,100$141,084
75$67,500$105,682

Why Buy An Annuity?

Currently, 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. The annuity is basically 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, ever.

Annuity Basics

YouTube video

Understanding Lifetime Income Riders

YouTube video

Estimate Your Retirement Income Payments

Take advantage of 17 different annuity calculators to generate estimates, then request a quote.

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 $1,000,000 annuity with a lifetime income rider to retire at age 60. At age 60, the lifetime income amount may be guaranteed $105,380 initially but hypothetically increases to $288,439 by age 67. Once the income has increased to $288,439 annually, this payment is locked in and can never go below $288,439 in the future.

On the other hand, a performance-based annuity may hypothetically generate an income of $381,349 a year for life starting at age 60, increasing to $636,610 a year by age 70. Once the income has increased to $636,610 annually, this payment is locked in and can never go below $636,610 in the future.

Things To Consider When Retiring

Find Out How Much Income Your $1 Million Will Provide In Retirement

Contact Us
First
Last

Retirement Income Guides

Frequently Asked Questions

Can I retire at 40 with $1 million?

Yes, you can retire at 40 with one million dollars. At age 40, an immediate annuity will provide a guaranteed level income of $34,207.68 annually for a life-only payout, $34,151.64 annually for a life with a 10-year period certain payout, and $67,871.40 annually for a life with a 20-year period certain payout. Payouts change frequently and vary by state.

Can I retire at 45 with $1 million?

Yes, you can retire at 45 with one million dollars. At age 45, an immediate annuity will provide a guaranteed level income of $36,629.52 annually for a life-only payout, $36,537.90 annually for a life with a 10-year period certain payout, and $36,172.74 annually for a life with a 20-year period certain payout. Payouts change frequently and vary by state.

Can I retire at 50 with $1 million?

Yes, you can retire at 50 with one million dollars. At age 50, an annuity will provide a guaranteed level income of $39,600 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 $35,400 annually initially with the income amount increasing overtime 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 $1 million?

Yes, you can retire at 55 with one million dollars. At age 55, an annuity will provide a guaranteed level income of $42,000 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 $41,300 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 $1 million?

Yes, a couple can retire on one 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 $1,000,000 would generate $47,500 annually starting immediately if both spouses were age 60, $54,450 if both spouses were age 65, and $57,200 if both spouses were age 70.

I’m 60 With $1 Million How Much Can I Expect To Spend In Retirement

At age 60, a $1 million annuity will provide a guaranteed level income of $52,500 annually starting immediately, for the rest of the insured’s lifetime. The income will stay the same and never decrease.

If you wait one year and start your lifetime income at age 61, your guaranteed level income will increase to $58,800 annually for life.

If the annuitant selected the increasing income option, they would receive $47,200 annually initially with the income amount increasing overtime 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.

Annuities That Are Tax-Deferred

These annuities are tax-deferred, and you will not have to pay taxes on your earnings until you withdraw from the retirement plan in the future. Annuities …
Read More

Annuities With Guaranteed Returns

These annuities offer guaranteed returns through a fixed interest rate or premium bonus. Most insurance-based annuities guarantee the protection of your investment from stock market …
Read More

What is Spousal Continuation?

A spousal continuation is a death benefit option for the surviving spouse that allows the beneficiary to assume ownership of the annuity contract preserving tax-deferred …
Read More

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

Scroll to Top