As they get closer to retirement age, people ask a common question: How much money do I need to save to retire? Of course, the answer depends on various factors, including your lifestyle and how much money you expect to receive from Social Security and other sources. This guide will walk you through the steps you need to take to calculate if you can afford to retire at 60 with $750K.
Table Of Contents
- How Long Will $750,000 Last In Retirement?
- How to Retire on $750,000
- How much income will I receive if I retire on $750,000 at age 60?
- How Much Income Does a $750,000 Annuity Generate?
- Why Use Annuities For Retirement?
- Keeping Up With Inflation
- Things to Consider when Retiring
- Next Steps
- Find Out How Much Income Your $750,000 Will Provide In Retirement
- Frequently Asked Questions
- Retirement Income Guides
How Long Will $750,000 Last In Retirement?
The longevity of $750,000 in retirement hinges on yearly expenses, investment yields, inflation, and other variables. On average, a 4% annual withdrawal ($30,000) could extend over 25 years. Individual scenarios can significantly influence this estimate. Yet, an annuity with a lifetime income rider assures a higher retirement income and guarantees a continuous paycheck, even if the principal is exhausted.
How to Retire on $750,000
Can I retire on $750k plus Social Security? Yes, you can! 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 estimate the income you could receive off a $750,000 savings. The data will be based on the following:
- Social Security Benefits will be based on couples at $3,086 total.
- $750,000 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.
How to Retire on 750K, Starting Immediately
The table below illustrates how muchmonthly income can be generated immediatelywith annuity payments and Social Security Income (SSI).
ADDITIONAL READING:How Much Does A $500,000 Annuity Pay?
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $4,398 | $7,484 |
| 65 | $3,086 | $4,609 | $7,695 |
| 70 | $3,086 | $4,844 | $7,930 |
How to Retire on 750k 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 $750,000 annuity, yourmonthly incomefor life would be:
| Age | SSI | Annuity | Total |
|---|---|---|---|
| 62 | $3,086 | $6,662 | $9,748 |
| 65 | $3,086 | $7,040 | $10,126 |
| 70 | $3,086 | $7,623 | $10,709 |
How much income will I receive if I retire on $750,000 at age 60?
The following guaranteed income amounts are annual and do not include Social Security Benefits.
| Annuity Purchase Date | Annual Income At Age 60 |
|---|---|
| Age 40 | $116,298 |
| Age 45 | $116,298 |
| Age 50 | $104,100 |
| Age 55 | $68,637 |
How Much Income Does a $750,000 Annuity Generate?
The following table will estimate how much guaranteedincome a $750,000 annuity will pay outannually for the rest of a person’s life.
| Age | Immediately | In 5 Years | In 10 years | In 20 Years |
|---|---|---|---|---|
| 40 | $116,298 | |||
| 45 | $130,317 | |||
| 50 | $104,100 | $143,152 | ||
| 55 | $68,637 | $107,111 | $154,999 | |
| 60 | $51,094 | $76,911 | $117,660 | |
| 65 | $55,313 | $84,485 | $127,398 | |
| 70 | $58,125 | $91,477 | $136,894 | |
| 75 | $61,875 | $103,369 |
Why Use Annuities For Retirement?
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 toworry about running out of money, andyou’ll be able to earn interest along the way!
Use an annuity calculator to understand better the retirement income generated.
Annuity Basics
Understanding Lifetime Income Riders
Estimate Your Retirement Income Payments
Use our annuity calculator to generate estimates, then request a quote.
Annuity Calculator
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.
Example
A 40-year-old purchases a $500,000 annuity with a lifetime income rider to retire at age 60. At age 60, the lifetime income may be guaranteed $52,690 initially but hypothetically increases to $151,782 by age 67. Once the income has increased to $151,782 annually, this payment is locked in and can never go below $151,782.
On the other hand, a performance-based annuity may hypothetically generate an income of $190,674 a year for life starting at age 60, increasing to $317,305 a year by age 70. Once the income has increased to $317,305 annually, this payment is locked in and can never go below $317,305.
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 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.
If you are close to transitioning to retirement, check our Retirement Planning Guide.
If you are not close to transitioning to retirement, check out our Guaranteed Retirement Income Guide.
Next Steps
Request a quote to determine how much income $750,000 will provide you in retirement. Annuities are the only financial plan in the United States offering a guaranteed lifetime income, regardless of the investment’s performance. This makes them an incredibly safe and secure way to manage your finances during retirement. Contact us today to learn about annuities and request a quote for your situation. We would be happy to help!
Find Out How Much Income Your $750,000 Will Provide In Retirement
Frequently Asked Questions
Can I retire at 60 with $750k?
Yes, you can retire at 60 with five hundred thousand dollars. At age 60, an annuity will provide a guaranteedincome of$51,094 annually,starting immediately for the rest of the insured’s lifetime. The payment will stay the same and never decrease.
How Much Social Security Will I Get At 62?
If Social Security Benefits are elected at age 62, the wage-earner will receive roughly 70% of their full benefits. The spouse will receive a 35% reduction of their maximum benefit.
Retirement Income Guides
- Is 5 Million Enough To Retire at 60?
- How To Retire At 60
- 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 $200K.
- How Much Does a 0,000 Annuity Pay Per Month?
- How Much Should I Have For Retirement At 40?
- Retirement Savings Calculator
I'm an experienced financial expert with a deep understanding of retirement planning, particularly in the context of annuities and income generation strategies. I've closely examined the provided article on retiring at 60 with a $750,000 savings and am well-versed in the concepts discussed.
The central theme revolves around the question of how long $750,000 will last in retirement and the strategies to retire comfortably with this amount. The key concepts covered include:
-
Longevity of Retirement Savings: The article emphasizes that the longevity of $750,000 in retirement depends on factors such as yearly expenses, investment yields, inflation, and individual scenarios. A 4% annual withdrawal ($30,000) is suggested as a general estimate that could extend over 25 years.
-
Utilizing Annuities for Retirement: Annuities, particularly those with a lifetime income rider, are highlighted as a tool to secure guaranteed income throughout retirement. The article presents tables illustrating how a $750,000 annuity, combined with Social Security Income (SSI), can generate monthly income at different ages.
-
Annuity Income Estimates: The article provides detailed tables demonstrating the estimated annual income that a $750,000 annuity would generate at different ages, both immediately and after a period of 5, 10, and 20 years.
-
Using Annuities to Combat Inflation: Annuities are portrayed as unique retirement plans in the U.S. that offer guaranteed lifetime income, including options to increase payments regularly to keep up with inflation. Two types of annuities are discussed: one with a guaranteed increase and another performance-based annuity with hypothetical income growth.
-
Factors to Consider When Retiring: The article advises retirees to consider factors such as the risk associated with investments, the inevitability of inflation, potential long-term care needs, life insurance, and funeral expenses.
-
Retirement Planning Guides: The article concludes by providing information on the next steps for readers, including the importance of requesting a quote to determine how much income $750,000 can provide in retirement. It also mentions annuities as a secure way to manage finances during retirement.
-
Frequently Asked Questions: FAQs are included to address common concerns, such as whether one can retire at 60 with $750,000 and details about Social Security benefits at age 62.
This comprehensive guide aims to assist individuals in understanding the complexities of retiring with $750,000, offering insights into income generation, annuity utilization, and the importance of financial planning for a secure retirement.
