How Long Will $5 Million Last in Retirement?
Short answer: withdrawing 4% a year ($16,667/month) with 5% returns and 2.5% inflation, $5 Million lasts about 38.5 years. At 5% withdrawals it lasts about 27.4 years. Your spending and returns change that a lot — run your own numbers below.
$5 Million: years it lasts by withdrawal and return
Each cell is how long the balance survives when withdrawals start at the monthly amount shown and then grow 2.5% a year with inflation. "∞" means growth outpaces withdrawals and the balance never runs out.
| Monthly withdrawal | Annual rate | 3% return | 5% return | 7% return |
|---|---|---|---|---|
| $12,500/mo | 3% | 36.5 years | 68.0 years | ∞ |
| $16,650/mo | 4% | 26.8 years | 38.6 years | ∞ |
| $20,850/mo | 5% | 21.1 years | 27.4 years | 46.2 years |
| $25,000/mo | 6% | 17.5 years | 21.4 years | 29.6 years |
| $33,350/mo | 8% | 13.0 years | 15.0 years | 18.1 years |
What $5 Million actually buys you
Retirement math is an income problem, not a lump-sum problem. $5 Million at a 4% withdrawal rate is $200,004 a year. The typical retired worker receives about $1,976 a month from Social Security, so a single person with $5 Million saved is looking at roughly $18,643 a month before tax. A couple with two benefits does materially better.
At $5 million, even a 2% withdrawal is $100,000 a year, and the portfolio will almost certainly grow in real terms across retirement. The calculator will show "indefinitely" for most reasonable inputs; the planning work is entirely tax and estate.
Three things that move the answer more than the starting balance
- Withdrawal rate. The gap between 4% and 6% is not "a bit shorter" — in the table above it is often the difference between lasting 30+ years and running dry in the early 20s.
- Sequence of returns. The calculator uses a steady average. Real retirees who hit a bear market in years one through three of retirement fare worse than the average suggests. Keeping one to two years of spending in cash or short-term bonds is the standard defence.
- Inflation. At 2.5% inflation, spending doubles in about 28 years. The calculator raises your withdrawal every year to preserve purchasing power; fixed-dollar withdrawals would last longer on paper but leave you poorer in real terms.
How to make $5 Million last longer
- Delay Social Security. Each year you wait from 62 to 70 raises the benefit roughly 7–8%. Bridging a few years from savings can be worth it if you're healthy.
- Use a flexible withdrawal rule. Cutting spending 10% after a bad year (the "guardrails" approach) adds years of survival in most historical scenarios.
- Mind the tax wrapper. Drawing from taxable accounts first, then traditional, then Roth is the textbook order; it often beats pro-rata withdrawals by a year or two of portfolio life.
- Part-time income. Even $1,000 a month of work in the first five years cuts the withdrawal rate dramatically during the most dangerous sequence-risk window.
Frequently asked questions
Can I retire on $5 Million?
It depends on spending, not the number alone. At a 4% withdrawal rate $5 Million produces about $16,667 a month before tax. Add Social Security (the average retired-worker benefit is about $1,976/month) and compare that total to your real monthly expenses. If expenses are covered with a margin, $5 Million can work; if not, you need lower spending, more income, or a later retirement date.
How much can I withdraw from $5 Million each month?
To make $5 Million last 30 years at 5% average returns and 2.5% inflation, the calculator shows a starting withdrawal of about $19,606 per month, rising with inflation each year. For a 25-year horizon it is about $22,310.
What return should I assume?
A balanced 60/40 portfolio has historically returned roughly 6–8% a year nominal, but sequence risk means early losses hurt more than the average suggests. Most planners test 4–6% for a conservative plan. Use the calculator above to see how sensitive your result is — that sensitivity is the real lesson.
Does this include taxes?
The table assumes no tax. If the money is in a traditional 401(k) or IRA, withdrawals are taxed as ordinary income — enter your expected tax rate in the calculator and it will gross up each withdrawal accordingly. Roth and taxable-brokerage money behave differently.
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SavingsLast calculators are educational estimates. They assume a constant average return and steady inflation; real markets are volatile and sequence-of-returns risk can shorten how long money lasts. Nothing here is financial, investment, tax, or legal advice. Consult a qualified professional before making decisions.