How tough is it living off $2.5 million? Ruth Madoff is about to find out.

Bernie Madoff's wife has been left with a lump sum in that amount from her settlement with the Justice Department.

The first thing to note is that the cash doesn't come completely free and clear. She may still face claims from the Securities & Exchange Commission, the Securities Investor Protection Corporation, and the trustees liquidating her husband's business and estate. It is also unclear how much Social Security she will have to live on as well.

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When you cast aside the sort of smoke and mirrors used by her husband, a conservative investment portfolio may only earn about 3% a year over inflation. At that rate, and if Mrs. Madoff wants to make sure she doesn't outlive her money, her $2.5 million settlement should give her an annual income of maybe $125,000 a year. That would make the money last all the way to age 100.

That's a pretty good income. It's a lot more than many of her husband's ruined victims will have. But it will hardly support her past lifestyle. Mr. and Mrs. Madoff, according to court papers, owned homes in Manhattan, Montauk, N.Y., and Palm Beach, Fla., along with millions of dollars in furniture, art, furs, and the like.

Sounds like she's going to have to do, on a bigger scale, what a lot of Americans are doing right now: Downsize.

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