Can a single 30 year old male retire and not have to work again with $600,000?

Question

My friend just inherited this amount of money after his mother passed away. It's all in his brokerage account, taxes paid already. Where would he have to move to and how would he have to live in order to retire and not have to work again and make this money last for the next 45 to 55 years. Do you think it's possible? Could he live a decent life?

Answer 1

Theoretically, he could live for 50 years with 35,000 per year income if he got 6% interest on it.

Now, the big concern that he should have is staying healthy all those 50 years, because 35,000 is not a lot of money if you need to pay private health insurance. A possibly better idea would be to work part time at some silly little no-stress job that give him benefits (WalMart and Starbucks come to mind). That'll keep him from taking too much of the capital off the top of that account, and keep him from spending all his money on his health when he gets older.

Even better, what I would personally do, is invest in real estate, because 35k also isn't a lot if you have to pay rent. (Unless there's some secret the states with snow know that we southern Californians don't.) For 600k in some parts of the country, he can purchase a 2-6 unit property, or several seperate properties. (I would personally prefer all my rental properties on one lot, but you can't be too picky I suppose.) He'd live in one, rent the rest. Then he has a free place to live and monthly income that's probably higher than the interest on the money. It'll also be a decent "hobby" keeping the place up.

Or he could live in Mexico. My parents bought a nice little house in Guadalajara for like 40k, but clothes/electronics are more expensive there than here so he should take his own. (If he does that, he shouldn't change it all to pesos just yet, only convert what he needs. The value of dollars versus pesos only keeps going up so far.)

Answer 2

$600k can do alot for a guy depending on what he had before that! It's funny to read a particular column in the monthly CNN Money magazine about what random people would do with $1k, $10k, $100k, and $1m. It's all relative, you see. That's especially noticeable when you read that someone would give the MILLION to their old school!

Consider your friend invested it... ALL of it... today. Assuming a very average annualized return of 8%, he'd be able to pull $48k a year from that account without touching the principal, or original investment of $600k. Not bad money for not doing anything, but nothing to put you up in Beverly Hills either.

Something to note is that the stock market has ups and downs. Some years will be great, like the typical 50%+ return in the late 90s! But others won't be so pretty. Therefore, that $48k isn't going to be a standardized payment - it'll fluctuate with the goings of the account's investments.

Your friend would also HAVE to learn how to budget himself. Odds are this idea will only be feasable if he takes that lump-sum payout once a year, which means he has to break down the $4k a month himself! If he goes over, he's taking out money that's saved for later. And if he has to dip BACK into his investment account, he will only reduce ALL FUTURE PAYMENTS by pulling away from the amount he's earning interest on.

It'll be rough... it'll be scary... it's not a half-bad idea! I lived off of less than $4000 a month when I was in the Army, and that was paying for a place and a decent life in HAWAII of all places! And just think, if he DID want to... oh, I don't know... feel like he was actually doing something with his life? Everything else that he made, even part-time, could go to a college savings plan for his childeren-to-be, a down payment on a house, a vacation to Europe, or an even more comfortable retirement later in life.

- J.

Answer 3

Yes he can, retire from a J-O-B. Now the real fun comes, he can invest. He must get smart quick. He can really build a future that includes a high rate of return for himself, but not if he still thinks he is an employee and just wants to fish. You cant fish for 60 years on 600K. However it can be made into a fortune if he is smart.

Answer 4

he could not only just get buy but could probably do very well. if he could somehow keep an income for a few years all he would have to do is put $4000 in a roth IRA. in a roth ira basically your money doubles itself in a given amount of time. usually seven years. just take the average gains in the stock market, typically 11% annually and divide it by 72. in this case if the market averages 11% it would be 6 1/2 years for the money to double itself. as long as he doesn't get greedy and spend the money left and right in the beginning he could be a millionaire by retirement.

Answer 5

Well, he's got 600K. Assuming he lives to 90, he can a little more than 10K/year. No, he doesn't have enough. He can certainly buy a house, but he could afford to work at a job that he really wants, rather than one that earns a lot of money.

I'd suggest Costa Rica.

Answer 6

maybe, but what happens when he gets married?

I would suggest investing the money and just retire around 45.

Answer 7

He could invest half and move to Mexico and live good and the half he's invested will bring in more to continue living well

Answer 8

If he moves to Tijuana and lives on rice and beans, $600K should just about cover him.

Answer 9

HEAVENS YES...
MINIMUN OF 15% RETURN ON INTEREST GIVES 90 GRAND A YEAR LESS TAXES AND INSURANCE AND SAVING ROLL OVER LETS SAY 60 GRAND TO SPEND.....
ONE CAN LIVE FAIRLY WELL ON 60 AFTER TAXES AND SUCH.

Answer 10

yep he can....why cant your friend put all his money in a bank and then live on interest??