If your goal is to live off of the interest of $1 million, it is technically possible. However, you’ll need the right kind of account and to head to the right country. If you’re wondering where you can go to live off the interest of $1 million, here’s a look at how much interest you’ll need, and five countries where it could be plausible.
How Much Interest Does $1 Million Make?
Before looking at countries where you can live off the interest of $1 million, it’s crucial to figure out how much interest $1 million generates. The exact amount you’ll bring in depends on where you have the $1 million stashed.
For example, the average savings account pays just 0.06 percent in interest annually. Even with $1 million in an account near the average, that only results in $600 per year, which is far too little to live off of anywhere.
Even high-yield savings account rates are pretty low today, often coming in between 0.50 and 0.60 percent. Putting $1 million in accounts with those rates would earn between $5,000 and $6,000, which still isn’t much.
Luckily, there are some alternatives. For example, PenFed has money market certificates with more favorable APYs. A three-year certificate has a 1.00 percent APY, while five- and seven-year certificates come in at 1.25 and 1.50 percent, respectively.
While you need to follow stricter rules regarding the use of the money, that three-year option earns about $10,000 per year. With the five- and seven-year versions, the annual earnings average out to around $12,500 and $15,000.
Going with longer-term money market accounts can require some planning. However, it can potentially give you enough to effectively live off of the interest once you cash the first one out at the end.
5 Countries Where You Can Live Off of the Interest of $1 Million
As mentioned above, the amount of interest you earn varies depending on the kind of account and your rate. However, by choosing the correct accounts, living off of the interest of $1 million could be possible. Here are five countries with incredibly low total annual costs, according to GoBankingRates.
In Jamaica, the total annual cost is a mere $13,421.77. However, $4,894.31 of that goes to rent. If you’re able to purchase a property with cash, your annual living expenses will shrink to $8,527.45, making living off of the interest of $1 million more practical.
2. Costa Rica
The total annual cost in Costa Rica is $13,441.57. Of that, around $4,939.21 would go to rent, leaving $8,502.35 heading toward living expenses.
Fiji has a total annual cost of about $13,544.72, of which $4,948.84 is for rent. That leaves $7,788.60 for the general cost of living, making it an excellent option for anyone who can purchase a home outright before living off of the interest from their savings.
In Ethiopia, the annual cost of living is $8,605.89, while rent would run $4,948.84 per year. That leads to a total of $13,554.72, making living off of the interest from $1 million possible with the proper account.
In Slovenia, rent runs about $5,603.12 annually. Add that to the $8,654.52 yearly general cost of living, and you get a total of $14.257.64.
Can you think of any other countries where you can live off of the interest of $1 million? Share your thoughts in the comments below.
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