How to Retire on $200,000 Inheritance

Shawn Plummer

CEO, The Annuity Expert

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

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 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 better understand the income you could receive off $200,000 from the inheritance or retirement savings. The data will be based on the following:

Retire On $200K

Can You Retire for $200,000 Starting Today?

It will be a modest retirement, but you can do it. The table below illustrates how much monthly income can be generated immediately with annuity payments and Social Security Income (SSI).

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

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:

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 seven years with a fixed annuity, guaranteeing 3.25% annually.

Find all the current fixed annuity rates here.

Why Use 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.

Keeping Up With Inflation

Some annuities offer a guaranteed lifetime income that can regularly increase 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

If you need help with questions about your inheritance, LegalZoom offers affordable options:

What To Do With A $200K Inheritance.

Next Steps

So, if you’re looking to retire on a $200,000 inheritance and live comfortably for the rest of your days, we can help make that happen. Our retirement planning services are designed to take all the guesswork out of the process and ensure you have everything you need to enjoy your golden years in style. So don’t wait – contact us Today for a free consultation!

How To Retire On $200,000 Inheritance

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Frequently Asked Questions

What is the smartest thing to do with an inheritance?

Making the wisest decision with your inheritance is an important step. Options include crafting an emergency fund, eliminating high-cost debt, investing in retirement savings, saving for future generations educations, and purchasing personal luxuries. Though you will not be taxed on inherited funds, any income earned from those investments can still be subject to taxes.

What is the average inheritance for the top 1%?

The upper echelon of earners, the top 1%, generally inherit around $1.7 million in total wealth. Comparatively, those within the middle 49% are presented with a more modest inheritance of approximately $273,000, while individuals within the bottom 50% acquire roughly $39,000 on average.

How do I deposit a large cash inheritance?

Entrusting your large inheritance with a federally insured bank or credit union is the best way to deposit it safely. Placing this money in a savings account can also be an ideal short-term solution.

What to do if you inherit $300,000?

If you’ve received an inheritance of $300,000, you should think about parking your money in a high-yield savings account; consulting with a financial expert for advice; establishing or reinforcing your emergency fund; investing to secure your future; discharging any debt burdens on the horizon; looking into buying a property if it is within reach financially; contributing towards college tuition fees for children if applicable and moderating spending.

What percent of millionaires receive an inheritance?

A recent study of 10,000 millionaires by Ramsey Solutions discovered that just 21% of them obtained any inheritance. Of those who did, only 16% got more than $100,000, and a mere 3% acquired more than one million dollars.

Retirement Income Guides

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.

*Disclosure: Some of the links in this guide may be affiliate links. I may receive a commission at no cost if you purchase a policy. It helps us keep the lights on!

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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