How to Retire on $200,000 Inheritance

Shawn Plummer

CEO, The Annuity Expert

How to retire on a $200,000 inheritance? This guide will tell you how to retire on 200k for the rest of your life, guaranteed. Additionally, here’s how to make that money act as a monthly pension.

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:

  • How to retire on $200k?
  • What to do with $200k?
  • How much would a $200k annuity pay?

How to Retire on $200K

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 $200,000 from the inheritance or retirement savings. The data will be based on:

  • Social Security Benefits will be based on couples at $3,086 total.
  • $200,000 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.

Can You Retire on $200,000 Starting Today

The table below illustrates how much monthly income can be generated immediately with a combination of annuity payments and Social Security Income (SSI).

ADDITIONAL READINGHow Much Does A $200,00 Annuity Pay?

AgeSSIAnnuityTotal
62$3,086$864$3,950
65$3,086$944$4,030
70$3,086$1,027$4,113
Total = Monthly Income for Life

How to Retire on $200,000 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 $200,000 annuity, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,086$1,275$4,361
65$3,086$1,350$4,436
70$3,086$1,511$4,597
Total = Monthly Income for Life

Living Off the Monthly Interest on $200,000

Some retirees like to withdraw interest from a fixed interest savings account like a fixed annuity or CD. For example, the interest on two hundred thousand dollars is $50,185 over 7 years with a fixed annuity, guaranteeing 3.25% annually.

Find all the current fixed annuity rates here.

Why Use Annuities?

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.

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 $200,000 Will Provide In Retirement

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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. 

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