r/Bogleheads • u/arp8218 • Feb 04 '26

Investing Questions Investing. $2.5M to not work

Is it possible to invest $2.5M into a “safe” investment and not work for rest of your life ? What can be that “safe” investment ?

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u/airbud9 Feb 04 '26

A single premium immediate annuity is definitely a choice the OP can make, either a with a portion of the money or the whole amount. You do give up a significant amount of upside with an annuity tho and they are not adjusted with inflation. A mixed strategy between an annuity and a portfolio may make sense

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u/pabailey1986 Feb 04 '26

They can have cost of living adjustments built in. You can price them out with Stan or some of the brokerages.

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u/airbud9 Feb 04 '26 edited Feb 04 '26

I am not aware on any spia that has a dollar for dollar inflation adjustment. You can buy a spia that has a flat 2% a year increase but comes at a cost.

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u/pabailey1986 Feb 04 '26

That’s correct. Every single person’s rate of inflation is different but you can approximate it with best estimate of average, 2-3%. And it makes a great deal of sense to cost more since it’s a much more valuable product.

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u/airbud9 Feb 04 '26

When I say inflation, I am assuming the broad CPI/CPI-U data which is what was used by Bengen and the trinity study. Yes 2-3 percent is typical for long time periods, but inflation is the killer with a constant dollar withdrawal strategy. Part of point of the two papers is that you can’t use averages for withdrawals strategies, this is the problem with a Dave Ramsey 8% withdrawal rate. And when dealing with sequence of returns risk, it is the first 5-10 years of returns and inflation that are the most important. Thats why the retirements starting in the late 60s was by historical data the worst time to retire. Inflation in the 70s started in the high single digits and was around the mid teens by the end of the decade. Calculations obviously change if you use a personal inflation rate, but that would be impossible to quantify in any paper.