How To Retire on 3 Million Dollars

Shawn Plummer

CEO, The Annuity Expert

Some retirement planners say the new rule of thumb is $3 million for retirement but is this true? This guide will show you how to retire on 3 million dollars, step-by-step. 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 3 million dollars?
  • If I retire with 3 million dollars, how much annual income?
  • Can I retire at 52 with $3 million?
  • Can I retire at 60 with 3 million dollars?
  • Is $3 million enough to retire at 55?
  • How long will 3 million dollars last in retirement?
  • How much retirement income will 3 million generate?
  • Can I retire at 62 with 3 million dollars?
  • Is $3 million enough to retire at 65?
  • Can I retire at 59 with 3 million dollars?

How to Retire on 3 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 $3,000,000 in savings. The data will be based on:

How to Retire on 3 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 READINGHow Much Does A $1,000,000 Annuity Pay?

If you retire on $3,000,000 starting immediately, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,086$12,960$16,046
65$3,086$14,163$17,249
70$3,086$15,399$18,485
Total = Monthly Income for Life

How to Retire on 3 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 $3,000,000 annuity, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,086$19,119$22,205
65$3,086$20,250$23,336
70$3,086$22,566$25,652
Total = Monthly Income for Life

How to Retire on 3 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 $3,000,000, your monthly income for life would be:

AgeSSIAnnuityTotal
40$3,086$26,343$29,429
45$3,086$29,643$62,286
50$3,086$33,300$36,386
Total = Monthly Income for Life

How To Retire On $3 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 $3 Million.

Annuity Purchase DateAnnual Income At 55
Age 40$246,681
Age 45$244,734
Age 50$183,747
Age 55$141,000

Retire At Age 60 With $3 Million.

Annuity Purchase DateAnnual Income At 60
Age 40$316,140
Age 45$284,982
Age 50$270,570
Age 55$198,096

Retire At Age 65 With $3 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$387,549
Age 45$355,740
Age 50$328,545
Age 55$300,636

Why Use 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

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Understanding Lifetime Income Riders

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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 $3 Million Will Provide In Retirement

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Frequently Asked Questions

Can I retire at 40 with $3 million?

Yes, you can retire at 40 with three million dollars. At age 40, an immediate annuity will provide a guaranteed level income of $102,621 annually for a life-only payout, $102,453 annually for a life with a 10-year period certain payout, and $203,613 annually for a life with a 20-year period certain payout. Payouts change frequently and vary by state.

Can I retire at 45 with $3 million?

Yes, you can retire at 45 with three million dollars. At age 45, an immediate annuity will provide a guaranteed level income of $109,887 annually for a life-only payout, $109,611 annually for a life with a 10-year period certain payout, and $108,516 annually for a life with a 20-year period certain payout. Payouts change frequently and vary by state.

Can I retire at 50 with $3 million?

Yes, you can retire at 50 with three million dollars. At age 50, an annuity will provide a guaranteed level income of $118,800 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 $106,200 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.

Can I retire at 55 with $3 million?

Yes, you can retire at 55 with three million dollars. At age 55, an annuity will provide a guaranteed level income of $126,000 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 $123,900 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 60 with $3 million?

Yes, you can retire at 60 with three million dollars. At age 60, an annuity will provide a guaranteed level income of $157,500 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 $141,600 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.

Why Do People Buy Annuities?

https://youtu.be/smZOK8eozJc 9 Reasons People Buy Annuities For Retirement. Tax-Deferred GrowthA Guaranteed Income For LifeNever Outliving Your Retirement SavingsKeep Up With InflationProtection From Creditors and BankruptcyProtection From Stock …
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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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