Can You Retire On $5 Million?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Can You Retire With $5 Million?

Yes, you can retire comfortably on five million dollars.

Here’s How:

Diversify Your Retirement Portfolio

A diversified portfolio is essential for safeguarding your retirement funds. By spreading your investments across stocks, bonds, and annuities, you minimize the risk associated with any underperforming investment. This approach ensures that your money works for you in various market conditions, offering stability and growth.

Plan for Health Care Costs

Healthcare can be a significant expense in retirement. Planning for these costs is crucial, especially if you are on a fixed income. By setting aside funds for unexpected medical bills and considering health insurance options, you can protect your savings and maintain your quality of life.

Consider Long-Term Care Insurance

Long-term care insurance covers expenses like nursing homes and in-home care. This insurance provides financial support if you need extended care later in life, ensuring you don’t deplete your retirement savings on health-related expenses.

Live Below Your Means

Maintaining a lifestyle that doesn’t exceed your income is vital. Creating and sticking to a budget helps you prioritize spending on essentials and avoid unnecessary financial strain. This disciplined approach to spending ensures your retirement funds last as long as you need them.

Secure Life Insurance

Life insurance is a crucial component of a comprehensive retirement plan. It provides financial protection for your surviving spouse, ensuring they are cared for during your passing. Life insurance can cover expenses like funeral costs and outstanding debts and provide a financial cushion to your beneficiaries.

5 Million Retirement

How Long Will $5 Million Last In Retirement?

Using the 4% rule, a widely recognized guideline for retirement planning, you can estimate how long your $5 million will last. The 4% rule suggests that you can withdraw 4% of your retirement savings each year without running out of money over a 30-year period.

With $5 million, this translates to an annual withdrawal of $200,000. This amount should cover your living expenses, allowing you to maintain a comfortable lifestyle. The 4% rule helps ensure that your retirement savings last for at least 30 years, considering various factors such as inflation and investment returns.

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.

Social Security

The average monthly Social Security Income check in 2024 is $1,907 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?

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).

AgeSSIAnnuityTotal
62$3,814$31,458$35,272
65$3,814$33,042$36,856
70$3,814$35,625$39,439
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$3,814$47,839$51,653
65$3,814$49,550$53,364
70$3,814$53,042$56,856
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, such as 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.

How Much Income Does $5 Million Generate?

The following table estimates the guaranteed income, a $5,000,000 annuity, that will be paid 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
$5 Million Retirement In America

How We Can Help

At The Annuity Expert, we understand the complexities and emotional burdens of retirement planning. As an experienced insurance agency, annuity broker, and retirement planner with 15 years of experience, we specialize in crafting personalized retirement strategies that address your specific needs.

Identifying Your Core Problem

Many people face the core problem of uncertainty about how much they need to save and the fear of outliving their savings. Symptoms of this problem include anxiety about the future, confusion over investment options, and a lack of clear, actionable advice.

Demonstrating Our Expertise

We recognize that these symptoms affect you emotionally, causing stress and doubt. Our commitment is to find the best solutions at the lowest costs, ensuring you have a clear and achievable path to a secure retirement. Our extensive experience and deep understanding of retirement planning make us a trusted partner in your journey.

How To Retire On 5 Million Dollars

What We Recommend

Step 1: Initial Consultation

The first step is to schedule a free consultation with us. During this session, we will assess your current financial situation, discuss your retirement goals, and identify any gaps in your planning. This step’s main benefit is understanding where you stand and what you need to do to reach your goals.

Step 2: Customized Retirement Plan

After the initial consultation, we will create a customized retirement plan tailored to your specific needs and objectives. This plan will include detailed strategies for savings, investments, and annuities. The main benefit is having a clear, actionable roadmap to follow, reducing uncertainty and stress.

Step 3: Implementation and Monitoring

The final step is implementing your retirement plan and continuously monitoring its progress. We will provide ongoing support and adjust your plan as needed to ensure it remains aligned with your goals and market conditions. The main benefit is peace of mind, knowing that your retirement strategy is on track and being managed by experts.

Features and Benefits

  • Personalized Strategies: Tailored to your unique needs, ensuring your plan is as effective as possible.
  • Expert Guidance: Leveraging 15 years of experience to navigate complex financial decisions.
  • Ongoing Support: Continuous monitoring and adjustments to keep your plan on track.
  • Cost-Effective Solutions: Finding the best options at the lowest costs, maximizing your savings.

Addressing Common Objections

Some may feel hesitant to work with a retirement planner due to costs or trust issues. However, the long-term benefits of professional planning far outweigh the initial investment. Without expert guidance, you risk inadequate savings, poor investment choices, and an insecure retirement.

Working with The Annuity Expert ensures a well-planned, secure retirement, leading to reduced stress and increased confidence in your financial future. The internal satisfaction of knowing you have a solid plan in place is invaluable.

Contact us today for free advice or a free quote and take the first step towards a secure and comfortable retirement.

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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.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, 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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