How Long Could You Live Off of a Million Dollars? Is It Enough to Retire On?

• With a 0.5% savings account: $5,000 a year

• 1% government bond: $10,000 a year

• 3% annuity: $30,000 a year

• 7% real estate: $70,000 a year

• And, 10% in S&P 500: $100,000 per year

Based on those numbers, it seems like a no-brainer for what you should invest in, right? Not so fast. There’s also the factor of risk. Putting your million dollars in the stock market is much more risky than putting it into a savings account. Be sure to take that into account and invest accordingly.

(Interested in investing so you can become a billionaire? Here's our list of the best stock apps and the best investment apps to get you started.)

If you really are uncertain about this one, I suggest you just take this simple approach.

1. Ask yourself what amount of money you live comfortably on today

2. Would you like this annual amount in retirement as well?

3. If so, enter that amount in Bankrate's handy Savings Withdrawal Calculator to see how long your money will last in retirement

By entering in your likely nest egg (the million bucks), the interest you'd earn on that money (I'd estimate 6% to be safe), and the withdrawal rate each year, you'll quickly be able to see if your money will last...even as a couple.

In the example above, I used a yearly withdrawal rate of $50,000, which many couples could live on today. And you know what? That million dollar nest egg kept going up! Can a couple retire on $1 million dollars today? Absolutely! Just as long as they live on $50k a year.

The only problem with $50k a year is...after roughly 20 years in retirement, that money is going to feel like just $25k a year (thanks to inflation).

So if you intend to live for 20+ years in retirement, can you live comfortably on a million dollars? Mmmm....you may want a little more. This leaves many couples wondering if they should reset their goals and instead save up 2 million dollars in retirement!

How much could you withdraw each year if you had $2 million in retirement?

If $50,000 a year seems like too little to you (because inflation is essentially cutting it in half), you might be looking at withdrawing an amount that's closer to $100,000 a year.

But you know what? If you have $2 million in retirement and withdraw $100,000 a year, your nest egg will just keep growing for decades!

Check out the chart below.

So, can you live comfortably on a million dollars? It's possible to live...but you'll certainly have to watch your pennies. We'll go over this in more detail later.

Can you live comfortably on 2 million dollars? Yes. It might even be a bit of overkill.

If you don't want to live on only a million bucks in retirement, but you don't want to wait to retire until you hit the $2 million mark, then $1.5 million might be the right number for you!

Related: What is the Interest on 2 Million Dollars?

Is $1.5 million dollars the right number for retirement? Let's stick with our $100,000 withdrawal each year.

How long would $1.5 million last in retirement?

Turns out, even by withdrawing $100,000 a year out of your nest egg each year, it would last over 30 years! If a million dollars in retirement didn't seem like enough, but you didn't want to wait until you reached $2 million, then $1.5 million might be the perfect number for you!

Want to know how to live on 1 million dollars if you retire at 40 years old?

To make a million dollars last for 60 years (who knows? You might live until you're 100 years old!), you'll have to be quite careful with your withdrawal rate.

If you can earn 6% on your money in retirement, you could consistently withdraw $59,700 a year and still have $25,000 to your name at your 100th birthday party.

So, can you retire at 40 with 1 million dollars? Yup! Buuuuut, your withdrawal of $59k a year is going to feel more like $15k after 40 years of retirement... That's going to be rough.

(Interested in a monthly budget template? Follow the link for a comprehensive spreadsheet that will auto magically create your budget for you. All you need to do is enter your income and it does the rest.)

How to Live Off 1 Million Dollars If You Retire at 40 Years Old

If it were me and I had $1 million in retirement by 40, I would probably start off super frugal and allow my money to grow for a decade or two.

I figure it's easier (and more fun) to live frugally when I'm young than when I'm elderly and have a bunch of medical costs to deal with.

Related: Early Retirement - Is It Really Possible?

So how can you live well on 1 million dollars if you retire early?

Here's what I would do:

• Keep the earnings target at 6% per year

• Only withdraw $40k a year for the first 20 years (this allows the 1 million dollar nest egg to grow to $1.7 million)

• Then start withdrawing $90k a year for the next 20 years (feels like $45k due to inflation)

• Then bump up the withdrawals to $165k for the last 20 years (feels like $41k due to inflation)

In the 60th year (your 100th birthday), you'll still have $59,000 to your name!

Related: Can a Poor Person Become a Millionaire (and if so...how?)?

Maybe you're approaching your 45th birthday and you just reached the ultimate pinnacle of 1 million dollars in your retirement account. Good for you! Now, it's leading you to the question..."Can I retire at 45 with $1 million dollars?"

The short answer: Sure you can!

Do you still need to be cautious with your spending?

Absolutely!

How to Live Off 1 Million Dollars If You Retire at 45 Years Old

If you want to retire at 45 years old with 1 million dollars, you can be slightly more aggressive than if you were 40...but not by much. First, be sure you're earning 6% on your money.

Then, instead of withdrawing a flat $59,700 a year, you could dial it up to $60,300 and still have a bit left by the time you reached 100 years old.

Want to retire at 50 with 1 million dollars? You can. It's certainly possible. And, you can afford to be even more aggressive since you only need your money to last for 50 years vs. 55 or 60 years.

How to Live Off 1 Million Dollars If You Retire at 50 Years Old

So how can you do it? How much can you withdrawal a year if you retire at 50 with 1 million dollars? If you earn 6% on your money each year, you can withdraw $61,100 a year and be left with $20,000 at the end!

So how about at age 55? Can you retire with 1 million dollars at 55 years old? We just showed you how to retire with 1 million at age 40, 45, and 50, so of course you can retire at 55 years old! But, oddly enough, you'll still have to be quite cautious with your spending.

A million bucks just isn't what it used to be!

How to Live Off 1 Million Dollars If You Retire at 55 Years Old

So how can you do it? How can you live off 1 million dollars if you retire at 55 years old? If you earn 6% on your money, you can withdraw $62,200 a year and still have $26k left when you turn 100.

Again though, keep in mind that at the 40 year mark, your purchasing power will be roughly 1/4th the amount of today (thanks to inflation). So $60k in 40 years will only buy you as much as $15k will today.

Want to live better in your later years? Spend less today and then increase your withdraw rates with inflation. (Here's a link to our budget spreadsheet again if you're interested in playing with some numbers.)

Here's how I'd recommend you live off 1 million dollars if you retire at 55 years old

• Earn your 6% rate each year with your money

• In the first 20 years, withdraw just $40,000 a year. This would allow your retirement to grow to $1.7 million.

• In the next 25 years, you could live large and withdraw $120,000 (which would feel like $60k in today's dollars).

• And then, you'd still be left with $430,000 when you turn 100!

So can you live off the interest of a million dollars? Heck yes! I'd say you now have a few options of how to do so!