Can you live off the interest of a million dollars?

Question

For example if you put one million dollars into some sort of account could you live off the interest from it.

For example if you put one million dollars into some sort of account could you live off the interest from it. By the way I don't have a million dollars. I wish I did though.

Answer 1

People who are telling you that interest rates for savings accounts is 2% are WRONG.

All of my savings accounts are at 4.5% or higher - and rates of 5% are available. Also, the rates on CDs are higher than savings accounts. You should be able to achieve basically risk-free investment of $1,000,000 at 5% without too much trouble.

That means your income would be about $50,000/year. So then the question is can you live for $50,000/year? It's certainly possible, but a better question might be would you WANT to live for $50,000/year. It depends a lot on where you live, if you have a family, what your interests are, and what you want out of life.

Answer 2

Budget Master makes a good point on the level of interest rates currently.

What you must also remember is that you will want to re-invest a portion of your income to beat inflation. So you will have less than $50,000 (if you invest at 5%) to live on.

I think what a million dollars would do is provide you with a nice retirement fund so that you can spend more money now and still have some in retirement. The point here is that you have to keep working until you reach retirement age.

Answer 3

If you pop it into a security then you will have between 40 and 50 thousand dollars a year to live on off the interest but you still have to pay taxes on what you take out. I can live off that sum quite comfortably without saving any more money. I took a minus 3 grand and turned it into 400K as I write after ten years of trading. I used market trending to accomplish that extraordinary feat when I had been broke all of my life before I figured that they are using shaved and loaded dice.

Answer 4

No unless you are older and have medical insurance and a paid off house.

And hear is why. Most example above give the very true a low interest rate of 4-5% let use an example of 10% and look at the number and see what happens.

1,000,000 At 10% will earn 100,000 per year.
But look at what happens to this 100k and see what relay happens.

First off the man want him% best case that will be 25k but can go as high as 43% or 43k.

So now you have 75k but you must add to the nest egg to increase your net gain next year to compensate for inflation. to be honest if your are young and have to live off this for 30-50 years you must reinvest let say just 25k to reinvest that will leave you 50k at best and will be just over 4100 per month. can you live yes, but not very well.

Hope this gives some food for thought.

Answer 5

Not really b/c interest rate is like 2% and thats about 20k$/yr ...I think if you lock up the million dollars in a CD you get like 3-4%, which is like 30k-40k/yr; however, you cannot take that out of the bank or you'll pay a penalty...

Answer 6

Easily. You can put the money in a bond fund and earn a safe 6 percent. That's 60k per year. An ample income for most anyone.
But why are you worrying about it. Have you got a million?

Answer 7

Technically you could, but I don't know why you would. A Typical Saving account of over 100K would yield 2.1% or so. Making you a cool 21K a year. You are however better off investing a good portion of it. Also, you wouldn't ever put anything over 200K in saving account in a bank (FDIC). To live comfortably you'd need a yield of 5-9 percent depending on your lifestyle. So your better off investing in a mutual fund ect.

Answer 8

Oh for sure you can If you work your money Right interest a lone won't do it i DON'T think But It depends how old you are as well
good luck

Answer 9

If you were to draw 4% interest you would get $40,000 per year.
It is up to you if you could live on that.

Answer 10

Depends on what the interest rate is....