Here Is What Retiring With $5 Million at 55 Looks Like

By: James Flippin · August 15, 2023 · Reading Time: 2 minutes

Early Exit

Retiring as early as 55 sounds daunting unless you have the savings to support it. But doing so with $5 million to your name? That’s an entirely different ballgame.

In fact, $5 million might be the magic number needed to gift yourself an early exit from the workforce.

Depending on your location, this sum could allow you to live on $100,000 annually for all of your post-retirement endeavors. Even if you live another 50 years after retiring, with $5 million as your nest egg, you could still withdraw six figures every year.

Interest-ing Investments

For those building a nest egg to last 50 years, income investing can be a golden goose.

By building and maintaining a robust portfolio, you have the potential to use only interest earned to cover expenses, leaving your principal untouched. With $5 million and the better part of a lifetime to invest and watch it grow, you’re positioned to survive and thrive in your golden years.

Retirement Realities

Thanks to the current interest rate environment, we witnessed a 5-Year Treasury note with a 3.5% coupon rate this year. For risk-averse investors, that meant a $5 million investment in low-risk and conservative assets could earn you as much as $175,000 annually.

But there’s more to consider: Health is wealth. Once you hit 65, Medicare swoops in to cover a significant chunk of your health expenses. But before that magic number, be sure to budget for those unexpected health costs, as well as any other surprise expenses, such as home repairs.

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