Ask an Advisor: How Should We Invest $1.25M to Generate $50k in Annual Retirement Income? Jeremy Suschak, CFP Fri, July 24, 2026 at 2:00 AM PDT 6 min read We have $250,000 in the bank and one million to invest for retirement with no debt. We need to earn $50,000 a year from the million. Where should I invest it? -Rob First, congratulations on saving $1 million for your retirement I'm sure a lot of hard work has gone into this! You have also done a great job building up a bank account that you can use for emergencies or other immediate needs. When combining these two asset bases with your debt-free balance sheet, you should be in a strong position to achieve your $50,000 per year income objective. Deciding how to invest your assets is critical both before and after retiring. A financial advisor can help you select and manage investments for your retirement portfolio. Before evaluating options for investing your retirement savings, it's important to start by assessing your goals. On the surface the $50,000 per year income goal is simple, but some nuances might be relevant and worth exploring. There are some additional considerations that you should keep in mind before deciding where to invest, so we'll dig into those before outlining potential investment options. Understanding Your Goals SmartAsset and Yahoo Finance LLC may earn commission or revenue through links in the content below. As with any wealth planning decision, you should always start with your goals. It appears that generating income is your primary objective. But are there other long-term goals this $1 million should help to serve? For example, do you want to preserve the value of the principal over time and perhaps leave money for heirs? Or do you intend to spend this principal down over retirement? If we take the $50,000 annual income goal at face value, then a required return of 5% is achievable and by no means overly aspirational. You could purchase a single-premium immediate annuity today and earn this rate. However, if preservation of principal is desired, then inflation should be factored into your calculation. Assuming positive inflation in the future, you would need a higher rate of return than 5%. Further, if you wish to leave an inheritance as part of your estate plan, then you will want to think about how much you wish to leave behind this will also impact your return needs. (If you're not clear on your financial goals, consider connecting with a financial planner and talking it over.) Additional Considerations to Evaluate There are many other factors to account for in conjunction with your goals before making an investment decision. We already alluded to one inflation but here are some additional considerations: Story Continues Time value of money: A dollar today is worth more than a dollar in the future. Factoring in the time value of money, spending $50,000 per year would deplete the entire $1 million balance in just over 14 years. Does...
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