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

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

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 will need to live comfortably in retirement. 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. If you plan on living a long and healthy life, your money will need to last longer. 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 are earning a high rate of return on your investments, then 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.

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 will guarantee that you receive a certain amount of money each month 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, that person would receive roughly $50,605 monthly for the rest of their life. When the annuity owner dies, the remaining balance passes down to beneficiaries in a lump sum.

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

  • Social Security Benefits will be based on couples at $3,086 total.
  • $5,000,000 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 $5 Million 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 $1,000,000 Annuity Pay Per Year?

AgeSSIAnnuityTotal
62$3,086$26,460$29,546
65$3,086$28,040$31,126
70$3,086$33,711$36,797
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$40,055$43,141
65$3,086$42,295$45,381
70$3,086$45,775$48,861
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.

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.

Annuity Basics

Understanding Lifetime Income Riders

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.

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$669,420
45$740,275
50$549,160$819,675
55$418,340$607,280$890,525
60$305,000$463,645$672,420
65$336,500$507,530$730,540
70$367,500$549,295$785,660
75$383,000$603,895

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 going into 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, 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 are looking for ways 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 so that you can 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?

Yes, you can retire at 60 with five million dollars. At age 60, an annuity will provide a guaranteed income of $305,000 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 $260,000 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 50 with $5 million?

Yes, you can retire at 50 with five million dollars. At age 50, an annuity will provide a guaranteed income of $268,750 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 $210,000 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.

Retirement Income Guides

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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