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?
- How Long Will $5 Million Last In Retirement?
- How To Make $5 Million Last A Lifetime In Retirement, Guaranteed.
- Social Security
- Can You Retire on $5 Million Starting Today?
- How to Retire on $5,000,000 in 5 Years
- Living Off the Monthly Interest on $5,000,000
- Why Use an Annuity?
- Keeping Up With Inflation
- How Much Income Does $5 Million Generate?
- Things To Consider When Retiring
- Next Steps
- Frequently Asked Questions
- Retirement Income Guides
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 READING: How Much Does A $1,000,000 Annuity Pay Per Year?
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $26,460 | $29,546 |
| 65 | $3,086 | $28,040 | $31,126 |
| 70 | $3,086 | $33,711 | $36,797 |
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:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $40,055 | $43,141 |
| 65 | $3,086 | $42,295 | $45,381 |
| 70 | $3,086 | $45,775 | $48,861 |
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
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.
| Age | Immediately | In 5 Years | In 10 years | In 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!
Request A Quote
Get help from a licensed financial professional. This service is free of charge.
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
- How To Retire On 4 Million Dollars?
- How to Retire With $3 Million?
- Can You Retire On 2 Million Dollars?
- Can I Retire At 60 With $1.5 Million?
- How To Retire On 1 Million Dollars.
- How To Retire On $500K.
- How To Retire On $200K.
- How Much Does A $100,000 Annuity Pay Per Month?
- How Much Should I Have Saved In Retirement At Age 40?