Is it better to live on interest only or spend down principal on $750k?

Interest-only preserves your principal and flexibility but pays less; spending principal down on a schedule pays more per month but leaves less for heirs and can run short if you live longer than planned. Many retirees blend the two and delay Social Security to cover longevity.

Retirement Literacy Foundation · Educational Guide

How Much Monthly Income Does $750,000 Generate in Retirement?

Q: How much monthly income does $750,000 generate in retirement?

Roughly $2,475 to $3,600 per month, depending on the method. Interest-only on a fixed account at ~4% yields about $2,475/mo; the 4% withdrawal rule yields about $2,475/mo but draws down principal; spending the balance down over 30 years with a Treasury or CD ladder at ~4% pays about $3,580/mo but leaves nothing at the end.

Q: Will $750,000 last through retirement?

At a 4% withdrawal rate ($30,000/year), $750,000 is designed to last about 30 years, but market downturns early in retirement (sequence-of-returns risk) can shorten that. Delaying Social Security, which pays for life and rises with inflation, is the most common way to reduce that longevity risk.

Short answer: A $750,000 nest egg typically produces about $2,475 to $3,600 per month, depending on how you turn it into income. Interest-only at ~4% pays around $2,475/mo. The classic "4% rule" also lands near $2,475/mo but slowly spends your principal. Spending the balance down over 30 years (for example with a Treasury or CD ladder at ~4%) pays about $3,580/mo, but the money is gone at the end, which is why delaying Social Security, the one income you can't outlive, matters so much.

Four ways to turn $750k into a paycheck

Method	Est. monthly income	Touches principal?	Can you outlive it?
Interest only (~4% fixed)	~$2,475	No	No, principal stays
4% withdrawal rule	~$2,475	Yes, slowly	Possibly, if markets drop early
Treasury or CD ladder, spent down over 30 years (~4%)	~$3,580	Yes, on a schedule	Yes, it ends at year 30 by design
Delay Social Security to 70, spend savings first	Varies	Yes, early on	No, Social Security pays for life, adjusted for inflation

Figures are illustrative for 2026 rate conditions and a 65-year-old; your actual numbers depend on age, rates, and options. Run yours below.

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Why the same $750,000 gives such different answers

The gap comes down to one trade-off: access vs. certainty. Keeping your money liquid (interest or the 4% rule) means you stay flexible and leave a legacy, but you carry the market risk and the risk of living longer than your money. Spending principal down on a schedule pays more each month but leaves less behind, so many retirees answer the "what if I live to 95?" worry by delaying Social Security instead, which pays for life and rises with inflation.

The hidden risk most retirees miss

A big market drop in your first few years of retirement does far more damage than the same drop later. This is called sequence-of-returns risk. It's why two retirees with identical $750k balances can end up in very different places. Keeping two to five years of withdrawals in cash or a short bond or CD ladder, so you never have to sell stocks in a downturn, is how many retirees protect against it.

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Frequently asked questions

Will $750,000 last through retirement?

At a 4% withdrawal ($30,000/year), it's designed to last ~30 years, but an early market downturn can shorten that. Delaying Social Security, which pays for life, reduces that longevity risk.

Is interest-only or spending down principal better for $750k?

Interest-only keeps your principal and flexibility but pays less. Spending principal down on a schedule pays more, but leaves less for heirs and can run short if you live past the plan. Many retirees blend both and delay Social Security, which pays for life.

How much income does $500k, $1M, or $1.5M generate?

Roughly proportional: scale the figures above up or down with your balance. See our companion guides, or run your exact balance in the calculator.

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The Retirement Literacy Foundation is a 501(c)(3) non-profit. This guide is general financial education, not individualized investment, tax, or insurance advice. Figures are illustrative and change with interest rates and your personal situation. Consider speaking with a licensed professional before making decisions.

Hans Goldstein

Founder & Executive Director · Retirement Literacy Foundation, a 501(c)(3) non-profit

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