How To Retire on $1 Million, Guaranteed: Step-By-Step (2023) (2024)

How Long Will $1 Million Last In Retirement Calculator

Annuities guarantee an income for the rest of your life. Use ourretirement calculatorto determine how much income your million dollars can generate now or in the future. Then, request a free quote below.

Can I Retire On $1 Million? Is It Enough Money?

Yes, you can retire on a million dollars, but it will not be easy. First, you must carefully budget and invest your money to ensure you do not outlive your savings. With careful planning, you can retire comfortably on $1 million. However, if you are not careful with your finances, you could struggle to make ends meet in retirement.

To retire on $1 million, you must have a nest egg of at least that size. If you do not have enough saved up, you must continue working and saving until you reach your goal. Once you have reached your goal, you can start planning for retirement.

There are a few things you need to consider when planning for retirement. First, you must ensure you have enough saved to cover your costs. This includes your living expenses, healthcare costs, and any other expenses you may have in retirement.

It would help to consider how much income you would need in retirement. You will need enough income to cover your basic living expenses and have some left for leisure and other activities.

Finally, it would be best to consider how you would generate income in retirement. For example, you may need to continue working part-time or look into other sources of income, such as pensions or investment earnings.

With careful planning, you can retire on one million dollars. However, it will not be easy. You will need to budget carefully and invest your money wisely. If you are not careful with your finances, you could struggle to make ends meet in retirement.

How To Retire on $1 Million, Guaranteed: Step-By-Step (2023) (1)

How Long Will A Million Dollars Last In Retirement?

How long your one million dollars will last in retirement depends on a few factors. First, it depends on how much income you need to cover your basic living expenses. Other retirement income sources, such as a pension or investments, will also affect how long your $1 million will last.

Another factor that will affect how long your $1 million will last in retirement is inflation. If prices rise over time, your $1 million will not go as far as if prices had remained the same.

Finally, your lifestyle in retirement will also affect how long your $1 million will last. For example, if you plan to travel and live a luxurious lifestyle, your $1 million will not last as long as it would if you lived a more modest lifestyle.

Assuming you will need $40,000 annually to cover your basic living expenses, your $1 million would last 25 years without inflation. However, if inflation averaged 3% annually, your $1 million would only last for 20 years.

If you plan to live a more luxurious lifestyle in retirement, your million dollars will not last as long. For example, if you plan to travel the world and stay in 5-star hotels, your $1 million would only last for ten years.

To sum it up, how long a million dollars will last in retirement depends on your lifestyle and how much income you need to cover your basic living expenses. If you are careful with your spending, your $1 million could last many years. However, your $1 million may not last as long if you have a lavish lifestyle.

How To Make $1 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 $1 million annuity with a lifetime income rider and wants to retire in 10 years at age 65, they would receive roughly $11,901 monthly for the rest of their life. If you live for 30 years in retirement, you will receive $4.28 million in payments. When the annuity owner dies, the remaining balance is passed down to beneficiaries in a lump sum.

Related Reading: Best annuities we recommend

Retiring On A $1 Million Comparison

FeaturesAnnuity401kIRARoth IRA
Withdrawal Percentage5.20% – 6.55%4%4%4%
Can Income Increase?YesYesYesYes
Can Income Decrease?NoYesYesYes
How Long Will Money Last?Lifetime30 Years+30 Years+30 Years+
Annual Fees0 – 1.50%1% – 4%1% – 4%1% – 4%
TaxationTaxable/Tax-FreeTaxableTaxableTax-Free
Death BenefitAccount BalanceAccount BalanceAccount BalanceAccount Balance

Example: A 60-year-old retiree starts withdrawing immediately from their $1 million portfolio, they would receive:

  • Annuity: Between $52,000 and $61,000
  • 401k: $40,000
  • IRA: $40,000
  • Roth IRA: $40,000

Social Security

The average monthlySocial Security Incomecheck-in in 2023 is $1,705 per person. In the tables below, we’ll use an annuity with a lifetimeincome ridercoupled with SSI to better understand the income you could receive from $1,000,000 in savings. The data will be based on the following:

  • Social Security Benefitswill be based on couples at $3,410 total.
  • Deferredannuity with an income riderproviding amonthlyincome for life.
  • The starting point will be age 62 since this is the earliest age to collect SSI.

How To Retire On 1 Million Dollars Immediately

The table below illustrates how muchmonthly income can be generated immediatelywith annuity payments and Social Security Income (SSI).

AgeSSIAnnuityTotal
62$3,410$6,292$9,702
65$3,410$6,608$10,018
70$3,410$7,125$10,535

How To Retire On 1 Million Dollars In 5 Years

The table below illustrates how muchmonthly income can be generated in 5 yearswith a combination of annuity payments and Social Security Income (SSI). If you retire in 5 years on a $1,000,000 annuity, your monthly income for life would be:

AgeSSIAnnuityTotal
62$3,410$9,568$12,978
65$3,410$9,910$13,320
70$3,410$10,608$14,018

How To Retire On 1 Million Dollars In 20 Years

The table below illustrates how muchmonthly income can be generated in 20 yearswith a combination of annuity payments and Social Security Income (SSI). If you retire in 20 years on $1,000,000, your monthly income for life would be:

AgeSSIAnnuityTotal
42$3,410$13,865$17,275
45$3,410$14,618$18,028
50$3,410$17,663$21,073

How To Retire On A Million Dollars By Age

The following guaranteed income amounts are annual and do not include Social Security Benefits.

Retire At Age 55 With $1 Million.

The following table estimates the guaranteed annual income a 55-year-old can retire with $1 million. This does not include Social Security Benefits

Annuity Purchase DateAnnual Income At 55
Age 40$136,636
Age 45$120,254
Age 50$82,200
Age 55$65,000

Retire At Age 60 With $1 Million.

This table estimates the guaranteed annual income a 60-year-old can retire with $1 million. This table does not include Social Security Benefits.

Annuity Purchase DateAnnual Income At 60
Age 40$157,827
Age 45$155,065
Age 50$138,800
Age 55$96,693

Retire At Age 65 With $1 Million.

The following table estimates the guaranteed annual income a 65-year-old can retire with a $1 million annuity. This table does not include Social Security Benefits.

Annuity Purchase DateAnnual Income At 65
Age 40$182,710
Age 45$175,418
Age 50$173,757
Age 55$143,904

Living Off Interest On A Million Dollars

How much interest do 1 million dollars earn per year? Some retirees like to withdraw interest from a fixed-interest savings account like afixed annuity or CD. For example, the interest onone million dollarsis$250,922.56 over seven yearswith a fixed annuity,guaranteeing 3.25% annually.

Find all thecurrent fixed annuity rates here.

3.25% Interest Rate Over 7 Years

YearInterestEnding Amount
1$32,500.00$1,032,500.00
2$33,556.25$1,066,056.25
3$34,646.83$1,100,703.08
4$35,772.85$1,136,475.93
5$36,935.47$1,173,411.40
6$38,135.87$1,211,547.27
7$39,375.29$1,250,922.56
TermInsurance CompanyAPY
N/AMoney Market Account – UNCLE Credit Union5.32%
N/AMoney Market Account – Hanover Bank5.32%
N/ASavings Account – Customers Bank5.32%
12 MonthsCD – Bread Savings5.50%
5 YearsClear Spring Fixed Annuity6.00%

Disclaimer: This is a review. The Annuity Expert is not associated with a bank or credit union. However, fixed annuities are sold at most financial institutions. We aim to help you find the highest interest rates for your retirement savings. We may receive a small referral fee if you purchase something using a link in this guide.

Find And Compare The Highest Interest Rates

Find the highest interest rates for your savings, ranging from 3 months to 5 years, all in one place.

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How Much Does a $1 Million Payout?

The following table will estimate how muchguaranteedincome a $1,000,000 annuity will pay outannually for the rest of a person’s life.

AgeImmediatelyIn 5 YearsIn 10 yearsIn 20 Years
40$119,820$157,827
45$83,600$120,254$175,418
50$62,500$88,200$138,800$211,950
55$65,000$96,693$143,904$225,450
60$72,000$110,001$158,535$234,900
65$79,300$118,920$170,159$266,600
70$85,500$127,300$199,549$328,934
75$87,900$142,686$262,417$387,872

Estimate Your Retirement Income Payments

Use our annuity calculator to determine the interest on a million dollars.

Annuity Calculator

Note: You can purchase an annuity (with no tax penalties) with your 401k, IRAs, retirement accounts, investments, and cash.

Keeping Up With Inflation

Some annuities offer a guaranteed lifetime income that can regularly increase to keep up with inflation. Once the income increases, the payment amount is locked in and can never go backward from that point forward.

In the example below, a 64-year-old retiree with $100k purchased an increasing income rider. They started with a $4,750-a-year payout. By the time this retiree reached age 75, their annual income had increased to $8,581 a year and continued to increase after the account was spent down to zero.

Things To Consider When Retiring

  • If you can’t afford to lose money,invest your savings without the risk.
  • Inflation is rising whether you like it or not. So, plan accordinglyor decrease your lifestyle in the future.
  • 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 buylong-term care insurancenow.
  • There is a 100% chance you will die, so buyaffordable life insurance or, at the minimum,burial insurancefor funeral expenses.

Next Steps

If you have a million dollars saved for retirement, an annuity is the best way to ensure that money lasts for the rest of your life. Request a quote today to determine how much income you can receive from $1,000,000. Annuities are the only retirement plan in the United States that provides a guaranteed lifetime income, so don’t wait – get started on your golden years today!

Request Help

Get help from a licensed financial professional. This service is free of charge.

Frequently Asked Questions

Can I retire at 35 with $1 million?

Yes, you can retire at 35 with $1 million. You will receive a guaranteed annual income of $58,014.57 starting immediately, utilizing an annuity for the rest of your life. This income will stay the same and never decrease.

Can I retire at 40 with $1 million?

You can retire at the age of 40 with one million dollars. You will receive $59,423.83 annually for the rest of your life if you get an immediate annuity. The payout changes often and varies by state.

Can I retire at 45 with $1 million?

Yes, you can retire at 45 with one million dollars. You will get a guaranteed income of $61,302.85 annually for the rest of your life if you choose an immediate annuity. The payout changes frequently and varies by state.

Can I retire at 50 with $1 million?

You can retire at 50 if you have saved one million dollars. You will get a guaranteed income of $62,500 annually utilizing an annuity, starting immediately for the rest of your life. The income amount will stay the same and never decrease.

Can I retire at 55 with $1 million?

Yes, you can retire at 55 with one million dollars. You will receive a guaranteed annual income of $65,000 starting immediately, utilizing an annuity for the rest of your life. This income will stay the same and never decrease.

Can a couple retire on $1 million?

You can retire on one million dollars. Annuities can provide a guaranteed income for both spouse’s lifetimes. After researching 326 annuity products from 57 insurance companies, our data calculated that $1,000,000 would generate $63,400 annually starting immediately if both spouses were age 60, $68,300 if both were age 65 and $72,800 if both were age 70.

I’m 60 With $1 Million. How Much Can I Expect To Spend In Retirement?

If you buy a $1 million annuity at age 60, you will get $68,125 annually for the rest of your life. This income will be guaranteed and will never decrease. However, if you wait until 61 to buy the annuity, your annual income will be $71,921.

Can I live off the interest of $1,000,000?

If you have a fixed annuity of 3.25%, you can expect to collect between $29,569 and $32,107 in interest each year. This amount will depend on how often the interest is compounded and how often you withdraw money from the account.

Can you retire with a million dollars?

Yes, you can retire with a million dollars. However, it is essential to remember that your lifestyle may change, and you may have to adjust your spending accordingly.

Is $1 Million enough to retire?

Retiring at 65 with $1 million might last 20 years based on state expenses. However, an annuity can offer a higher lifelong income even after using up the principal.

How long will $1 million last in retirement?

If you’re in the 24% tax bracket and withdraw $5,000 monthly, your savings will last just over 30 years. Yet, with a 5% return on the $1 million, you’d deplete funds in 26 years. An annuity, however, offers stable, higher income that’s contractually guaranteed never to run out.

Can you retire with $1.2 million, and how long will it last?

You can retire on $1.2 million. Annuities provide a contractually guaranteed income for the rest of a person’s life. After researching 326 annuity products from 57 insurance companies, our data calculated that $1,200,000 would generate $81,750 annually starting immediately, starting at age 60, $88,500 at age 65, and $95,160 at age 70.

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  • Use Our Retirement Plan Calculator To Project How Much Income You Can Generate When You Retire.

As an expert in retirement planning and financial management, I have extensive knowledge of the concepts discussed in the article. My expertise is demonstrated through a deep understanding of retirement calculators, annuities, investment strategies, and considerations for maintaining financial stability during retirement.

Retirement Planning and Budgeting: The article emphasizes the importance of careful budgeting and strategic investments to ensure a comfortable retirement on $1 million. It highlights the need to cover living expenses, healthcare costs, and other financial considerations.

Factors Affecting Retirement Duration: The article mentions several factors influencing how long $1 million will last in retirement. These include the retiree's lifestyle choices, inflation, and other income sources such as pensions or investments.

Annuities as a Retirement Income Solution: The article suggests annuities as a way to guarantee a lifetime income in retirement. It explains that purchasing an annuity with a lifetime income rider can provide a specified monthly amount for the rest of one's life.

Comparison of Retirement Vehicles: The article compares various retirement vehicles, such as annuities, 401k, IRA, and Roth IRA. It provides information on withdrawal percentages, the potential for income increase or decrease, duration of money lasting, annual fees, and taxation.

Income Generation Scenarios: The article presents different scenarios of retiring with $1 million at different ages, illustrating the potential annual income one could receive through annuities. It also factors in Social Security benefits to provide a comprehensive view of retirement income.

Interest Earnings and Fixed Annuities: The article explores the option of living off interest, particularly with fixed annuities. It provides examples of interest earnings over a specified period and compares rates from different financial institutions.

Inflation and Increasing Income: The article discusses the impact of inflation on retirement income and highlights annuities that offer guaranteed lifetime income with provisions for regular increases to keep pace with inflation.

Considerations for Retirees: The article advises retirees to consider factors such as the risk of investment, rising inflation, and the potential need for long-term care insurance. It emphasizes the inevitability of death and suggests planning for life insurance or burial insurance.

Retirement Income Estimates: The article provides tables estimating guaranteed annual income based on different ages and annuity purchase dates. It also addresses questions about retiring at various ages with $1 million and illustrates potential income amounts.

Retirement Income Calculator: The article offers a retirement income calculator to estimate the interest on $1 million using annuities, considering various scenarios and variables.

In summary, my expertise in retirement planning allows me to confidently analyze and discuss the concepts presented in the article, providing valuable insights into the complexities of ensuring financial security during retirement.

How To Retire on $1 Million, Guaranteed: Step-By-Step (2023) (2024)

FAQs

Can you retire on $1 million dollars plus Social Security? ›

Yes, it is possible to retire with $1 million at the age of 65. But whether that amount is enough for your own retirement will depend on factors that include your Social Security benefits, your investment strategy and your personal expenses.

How much money should a 70 year old have to retire? ›

How Much Should a 70-Year-Old Have in Savings? Financial experts generally recommend saving anywhere from $1 million to $2 million for retirement. If you consider an average retirement savings of $426,000 for those in the 65 to 74-year-old range, the numbers obviously don't match up.

How much monthly income will 1 million generate? ›

At the current Treasury rate of 4.3%, a $1 million portfolio would generate about $43,000 per year, or roughly $3,500 per month. With your Social Security payments that would generate about $6,000, again enough to live comfortably in most places.

What does a $1 million dollar retirement look like? ›

Around the U.S., a $1 million nest egg can cover an average of 18.9 years worth of living expenses, GoBankingRates found. But where you retire can have a profound impact on how far your money goes, ranging from as a little as 10 years in Hawaii to more than than 20 years in more than a dozen states.

Can you live off the interest of $1 million dollars? ›

Once you have $1 million in assets, you can look seriously at living entirely off the returns of a portfolio. After all, the S&P 500 alone averages 10% returns per year. Setting aside taxes and down-year investment portfolio management, a $1 million index fund could provide $100,000 annually.

Do retired millionaires get Social Security? ›

The amount a person receives in Social Security benefits is not directly affected by their current income or wealth. Therefore, even if someone is a millionaire or billionaire, they can still receive Social Security benefits if they have a qualifying work history.

What is the average 401k balance for a 65 year old? ›

$232,710

How much do most Americans retire with? ›

Average retirement savings balance by age
Age groupAverage retirement savings balance amount
35-44$141,520
45-54$313,220
55-64$537,560
65-74$609,230
1 more row
Mar 5, 2024

What is a good monthly retirement income? ›

As a result, an oft-stated rule of thumb suggests workers can base their retirement on a percentage of their current income. “Seventy to 80% of pre-retirement income is good to shoot for,” said Ben Bakkum, senior investment strategist with New York City financial firm Betterment, in an email.

How many people have $3,000,000 in savings in usa? ›

1,821,745 Households in the United States Have Investment Portfolios Worth $3,000,000 or More.

Are you rich if your net worth is $1 million? ›

Additionally, statistics show that the top 2% of the United States population has a net worth of about $2.4 million. On the other hand, the top 5% wealthiest Americans have a net worth of just over $1 million. Therefore, about 2% of the population possesses enough wealth to meet the current definition of being rich.

How long will 900k last in retirement? ›

How long will $900k last in retirement? $900k can last you for over 25 years in retirement if your annual spending remains around $50,000, following the 4% rule.

How long should $1 million dollars last in retirement? ›

A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.

How long would $1 million dollars last in retirement? ›

For example, $1 million would've lasted you around 20 years in Florida, according to GoBankingRates' 2022 analysis. And it would've stretched for a little over 25 years in Mississippi, per last year's study. But don't be too discouraged — a “comfortable” retirement will look different for everyone.

How long will $1 million last in retirement by state? ›

For instance, in California, an average retiree requires approximately $100,965 to lead a comfortable life, whereas in Kansas, that figure is just above $63,000. Retirees in certain states can enjoy between 15 and 16 years of life if they save one million dollars.

How long will 1 million last in retirement with Social Security? ›

A recent analysis determined that a $1 million retirement nest egg may only last about 20 years depending on what state you live in. Based on this, if you retire at age 65 and live until you turn 84, $1 million will probably be enough retirement savings for you.

How long does $1 million dollars last after age 60? ›

You plan to retire at 60 and place your life expectancy at 90, so you'll need an income to carry you through 30 years. With $1 million, assuming your money doesn't increase or decrease too dramatically in value during those 30 years, you'll be guaranteed a minimum of $33,333 annually or $2,778 monthly.

At what age should you have $1 million in retirement? ›

Due to the power of compounding, starting a retirement savings while in one's early 20s, or even younger, can help ensure your assets grow to at least $1 million by age 65.

What is maximum dollar amount of Social Security? ›

The maximum Social Security benefit at full retirement age is $3,822 per month in 2024. It's $4,873 per month in 2024 if retiring at age 70 and $2,710 if retiring at age 62.

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