Can You Retire On $5 Million?

Shawn Plummer

CEO, The Annuity Expert

When it comes to retirement planning, there are a lot of questions that come up. How much money do you need to retire comfortably? Can you retire on $5 million or less? How long will your money last? In this guide, we will answer all of those questions and more! We will provide helpful tips on how to make your money last in retirement and show you that it is possible to retire with just $5 million.

Can You Retire With $5 Million? Is It Enough to Live Comfortably?

The answer to this question is a resounding yes! You can retire on five million dollars. You could retire quite comfortably on that amount of money. The key is ensuring that your money lasts as long as you do in retirement.

There are a few things that you can do to make sure that your money lasts as long as you need it to. First, you will want to ensure a diversified retirement portfolio. This means you should not have all your eggs in one basket. You will want to spread your money into different investments, such as stocks, bonds, and annuities. This will help protect your money if one investment does not perform well.

Another thing you can do to make your money last is plan for health care costs. This is especially important if you are retired and on a fixed income. You will want to have enough money to cover unexpected medical bills.

You may also want to consider purchasing a long-term care insurance policy. This will help cover the costs of nursing or in-home care if you need it later in life.

Finally, you will want to ensure that you are living below your means in retirement. This means that you should not be spending more money than you have coming in. Try to stick to a budget and only spend money on the things that are important to you.

Following these tips ensures that your five million dollars last as long as you need in retirement. In addition, you can live a comfortable and enjoyable retirement with that amount of money. So, start planning today and make your retirement dreams a reality!

5 Million Retirement

How Long Will $5 Million Last In Retirement?

This is a question that many people have when they are planning for retirement. They want to know how long their money will last and if it is enough to cover their needs.

The answer to this question depends on a few different factors. First, it depends on how much money you need to retire comfortably. This includes things like your housing costs, food costs, and any other necessary expenses.

Next, it depends on how long you expect to live in retirement. Your money must last longer to live a long and healthy life. However, if you do not expect to live as long, then your money may not need to last as long.

Finally, it also depends on the rate of return on your investments. If you earn a high investment return rate, your money will last longer. However, if you are only earning a low rate of return, then your money may not last as long.

That said, $5,000,000 is a significant amount of money. However, if you can save this much for retirement, you will be in good shape. You should be able to live a comfortable and enjoyable retirement with this amount of money.

What A 5 Million Retirement Looks Like.

How To Make $5 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 guarantees you receive a certain monthly amount for the rest of your life, no matter how long you live.

For example, if a 55-year-old person purchases a $5 million annuity with a lifetime income rider and wants to retire in 10 years at age 65, they would receive roughly $50,605 monthly for the rest of their life. When the annuity owner dies, the remaining balance is passed down to beneficiaries in a lump sum.

Can You Retire On $5 Million?

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 better understand the income you could receive from 5 million dollars of retirement savings. The data will be based on the following:

Can You Retire on $5 Million Starting Today?

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 $1,000,000 Annuity Pay Per Year?

AgeSSIAnnuityTotal
62$3,086$31,458$34,544
65$3,086$33,042$36,128
70$3,086$35,625$38,711
Total = Monthly Income for Life

How to Retire on $5,000,000 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 $5,000,000 annuity, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,086$47,839$50,925
65$3,086$49,550$52,636
70$3,086$53,042$56,128
Total = Monthly Income for Life

Living Off the Monthly Interest on $5,000,000

Some retirees like to withdraw interest from a fixed-interest savings account like a fixed annuity or CD. For example, the interest on five million dollars is $1,254,612 over seven years with a fixed annuity, guaranteeing 3.25% annually.

Find all the current fixed annuity rates here.

$5 Million Retirement In America

Why Use an Annuity?

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, and you’ll be able to earn interest along the way!

Annuity Basics

Understanding Lifetime Income Riders

Estimate Your Retirement Income Payments

Use our annuity calculator to generate estimates, then request a quote.

Keeping Up With Inflation

Some annuities offer a guaranteed lifetime income that can 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.

How Much Income Does $5 Million Generate?

The following table will estimate how much guaranteed income a $5,000,000 annuity will pay out annually for the rest of a person’s life.

AgeImmediatelyIn 5 YearsIn 10 yearsIn 20 Years
40$789,136
45$877,090
50$694,000$1,050,000
55$483,465$719,519$1,127,250
60$360,000$550,003$792,674$1,208,250
65$396,500$594,598$850,796$1,333,000
70$427,500$636,500$997,747
75$439,500$713,432$1,312,087

Things To Consider When Retiring

  • 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 entering 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, so buy affordable life insurance or, at the minimum, burial insurance for funeral expenses.

Next Steps

Annuities may be a good option if you’re nearing retirement and looking to ensure your money lasts as long as you do. However, annuities come in many different shapes and sizes, so it’s essential to do your research before signing up.

Luckily, our team of experts is here to help. We can walk you through the different types of annuities and how they work to find the best one for your needs.

Plus, we offer free quotes to see how much money you could save by choosing an annuity over other retirement options. Ready to get started? Contact us today!

How To Retire On 5 Million Dollars

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Frequently Asked Questions

Can I retire at 60 with $5 million?

You can retire at 60 with $5 million, providing an annuity that guarantees an annual income of $340,625 for life. Alternatively, by choosing the increasing income option, you’d start with $272,500 annually, which would rise to account for inflation. Both options continue to pay even if the annuity depletes, and upon the annuitant’s death, any remaining funds are passed to a designated beneficiary.

Can I retire at 50 with $5 million?

If you retire at 50 with $5 million, you can secure an annual annuity with a fixed lifetime income of $312,500. Alternatively, by selecting the increasing income option, you’d start with $217,500 annually, adjusting upwards with inflation over time. In both scenarios, payments persist even if the annuity is exhausted, and any remaining funds are transferred to a designated beneficiary upon the annuitant’s death.

Retirement Income Guides

Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

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

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