If you have 12 million dollar can you retire luxuriously?

Question

For example a 2 million dollar home.

2-3 great vacations per year, 200,000 $ worth of cars (changed every 4 years), nice fashion, good meals, etc. (200,000-300,000 $ spent annually)

Can this last until your death?

Answer 1

It depends. If you wanna live like Bill Gates than you won't last a month. But if you wanna live like a celebrity than yes you can last. most people earn 1-2 million dollars in their entire life so you can definitely live well for a long time. But, do you honestly have an extra 12 million dollars.

Answer 2

Nope not if you are going to spend the way you listed above.

Answer 3

luxury to one may be poverty to another

Answer 4

Some accountant friends of my dad's actually figured out that if you have $4 million, you can invest it and live off of the interest (not extravagantly, but normally) for the rest of your life. If you live sensibly, $12 million will certainly last you, and allow you to put your children, grandchildren, etc... through university and grad school, go on dream trips, and generally make other people insanely jealous.

Answer 5

hmm you left out a nice yaht or boat and how about a private jet beats the long lineups at the airport. also dont' forget you want to furnish your home inside of creature comforts.

YOu also would like a getaway home for change of scenery when you feel the urge and is the house by the ocean or in a private setting . dont' forget theres taxes on the home and good ol uncle sam will have his hand out too.  what happened to the maids and nutrionist and work out trainer and a gym so i would say no your 12 million would be a dip in a pond. you need more.

Answer 6

If you are wise about your money then you could probably make it last you a long while. For example does the house have to be a 2 million dollar one? The larger the house the larger the power bill. Why not find a cheaper house and build it up more to fit what you are looking for? Not too mention you could probably have any additions or extensions done cheaper, if you shop around.

Cars, for how many poeple? You only? Why not just buy your dream car? Why throw your money away every 4 yrs or so? Why not hand it to me if that is what your plan is? Seriously think about that one!

Good meals? Like do you know how to cook? Grill out? Save money and become adventrous(how ever you spell that). Do you have a wife? Cook for her, be romantic. Or would you prefer she fall in love with the waiter every night or the cook who makes her meals? Clothes? Dude, you can buy great shoes and spend less than  thousand a pair!

Honestly, to me it sounds like you want to be a show off and are ungrateful to have 12 million dollars, should you happen to have it. By the way, got kids? Stop thinking about you and focus on them. And you can always take nice vacations and have a great Christmas with out squandering your money. Besides the man who wastes is always the man who loses.

That should help you figure out the answer to your hypothetically question. Good Luck.

Answer 7

you probably can if u let it grow intrest in the bank but nope i cant i rather not have the money and be happy :) i dont care for high class luxiourious people with that amount of money they tend to get greedy lol. i rather put most of it in charity there are more ppl out there that deserves this. may not be the best answer but its my answer :)

Answer 8

It can, but it is entierly dependent on how you invest that 12 million.

Lets say you want to retire in luxury, something you estimate will cost $300,000 per year. I'm going to assume this includes the mortgage on the 2 million dollar home, maintenance, etc... and all applicable costs for the cars.

I am assuming you haven't paid tax on that, so we need to conservatively estimate that you'll pay 50% in tax.

So you need $600,000 per year, before tax.

In order to get $600,000 annually before tax from your investments, you need a return, after inflation, on your 12 million dollar investments equal to 5%. So if inflation is 3% per year, you will need to actually earn 8% on your investments every year.

Inflation eats away at purchasing power every year, so you must factor that in. 8% minus the 3% worth of purchasing power you lose due to inflation every year gives you a real return of 5%, and 5% of 12 million is $600,000.

If inflation is higher, at 5% per year you need to make 10% to get that $600,000. If inflation is lower, at  2% you need to make 7% to get $600,000.

This is, of course, without factoring in capital gains tax. If you live in Canada, this means that you have to pay tax on about 50% of any gains you make from your investment (unless they are tax sheltered). So if you make a dollar from your investment, you have to pay tax at the appropriate rate on 0.50$ of it.

So you'd probably want to have another 100k on hand to pay capital gains taxes (or more, but taxes take a real expert to get right, so I'm going to make my life easier and say $100,000). The closest round number is 6%, which will give you an annual income of $720,000.

To get $720,000 ie 6% of 12 million, and assuming 3% inflation, you'd need to earn 9% return form your investments every year.

On AVERAGE this can be done: the S&P500 has historically returned about 10.4% before inflation (and just over 7% after inflation). But your fortunes would be entierly dependent on the market: if you earn less than 9% one year, you won't be able to afford your lifestyle. If you make more than 9% then you're probably ok until next year.

If the market tanks and you LOSE 5% that year, you're REALLY going to be in trouble if you were depending on having that $720,000.

This is why so many retirees need safer investment vehicles: they give smaller returnes (some only keep up with inflation)but are usually less volatile.

As always, consult a fee only financial planner to help you figure out if this is something in the cards for you. The above example is just that, an example, with many things taken for granted (like say, the incredible, complex burden of taxes, which I have greatly simplified for this example!).

Good luck!

Answer 9

$12 million sounds like enough money that at age 25 you would never have to work again, but you wouldn't live luxuriously. You could live on $75,000 per year as if you were working a normal job basically

Answer 10

I hope so. Life is so strange, you could win that big lottery and die of a heart attack right there. So, yes you could retire luxuriously on 12 millions. Some people are quite happy with a lot less than that.

Answer 11

If you were to take this $12M, and put it into an aggressive-growth mutual fund earning 10-12% a year, then you could have an income of 1.2M-1.5M per year, and never touch the principal, so yes, it is possible.

Answer 12

In Mexico