How long will $5M last in retirement?
$5M can last 35+ years at a sustainable 4% withdrawal ($200,000/yr) — but at a heavier 6% draw ($300,000/yr) it lasts about 19 years. How long your money lasts comes down to how much you spend, taxes, and market luck.
How long $5M lasts at each spending level
Retiring at 60 with $5M invested (60% taxable / 30% traditional / 10% Roth), 6% nominal return, 3% inflation, no Social Security:
| Rate | Spend / yr | Spend / mo | How long it lasts |
|---|---|---|---|
| 3% | $150,000 | $12,500 | 35+ years (to 95) |
| 4% | $200,000 | $16,667 | 35+ years (to 95) |
| 5% | $250,000 | $20,833 | ~25 years (to 85) |
| 6% | $300,000 | $25,000 | ~19 years (to 79) |
| 7% | $350,000 | $29,167 | ~16 years (to 76) |
Three things that change the answer
- Taxes. A dollar in a traditional 401(k) isn't a dollar you can spend — withdrawals are taxed as ordinary income. This projection accounts for that, which is why real-world longevity is shorter than a naive "$5M ÷ annual spend."
- Sequence of returns. A market crash in your first few retirement years does far more damage than the same crash later — you're selling assets while they're down. Two retirees with identical average returns can get very different lifespans from the same $5M.
- Social Security, pensions, and part-time income. Every dollar of outside income is a dollar you don't withdraw. Adding Social Security alone often turns a "runs out" plan into one that lasts indefinitely.
These figures assume you retire at 60. Retire earlier and the same $5M must stretch over more years; retire later (or add Social Security) and it lasts longer. Model your exact situation in the calculator.
From outliving the money to passing it on
At this balance the horizon is effectively multi-generational, and the central question stops being whether the money lasts. It almost certainly does. The real work becomes moving it to the next generation, and to any causes you care about, with the least lost to tax and friction along the way.
The levers are the same ones smaller portfolios use, applied with more intent. Managing required minimum distributions, which begin at 73 or 75 for those born in 1960 or later, through earlier Roth conversions keeps forced income from compounding into ever-higher brackets. Coordinating which accounts are spent, gifted, or left to heirs turns a good balance into an efficient one.
- Roth accounts carry no lifetime required distributions and pass to heirs income-tax-free.
- Appreciated taxable holdings receive a stepped-up basis at death, so spending them first can be counterproductive.
- Qualified charitable distributions and donor-advised gifts meet giving goals while trimming taxable income.
An estate attorney and tax advisor earn their keep at this level; the plan is now about structure, not survival.
Common questions
How long will $5M last in retirement?
At a sustainable 4% withdrawal ($200,000/year), $5M lasts 35+ years retiring at 60. At a 6% draw ($300,000/year) it lasts about 19 years. The exact answer depends on your spending, taxes, and market returns.
What's a safe withdrawal rate for $5M?
The classic "4% rule" — $200,000/year from $5M, rising with inflation — has historically lasted a 30-year retirement. Retiring early (a longer horizon) argues for a slightly lower rate closer to 3.5%.
Does this include taxes?
Yes. The projection applies the federal (and where relevant, state) tax you'd owe withdrawing from taxable, traditional, and Roth accounts, so the longevity figures are realistic rather than a simple division.