Personal Finance

I live on a 500-acre lot and have socked away $3 million - can I retire if I only spend $120,000 per year?

David Beren

Published: October 5, 2024 8:45 am

One of the things we all wish for while working is the opportunity to retire early enough to enjoy life. This is exactly the case with a recent post on r/ChubbyFIRE on Reddit. Our poster, a 59-year-old individual, is approaching a point where he and his spouse believe they are ready to quit working. 

At the time of the posting, we’re learning there is around $3 million in a mixed portfolio and another $2-3 million in property. As they live on a large amount of land, they can carve out portions of their existing property and make some additional cash this way. 

In addition, an inheritance is coming, so the poster wonders if living on roughly $10K a month is feasible. 

What I love about this post is the practicality of everything. There’s no crazy lifestyle they are looking to lead, and they are not looking to go above their means. To help answer the question, let’s take a closer look at everything we know. 

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The Scenario

Okay, so let’s look at everything the Redditor has told us. The couple has approximately $300,000 in annual income combined. Their current portfolio, valued at around $3 million, combines IRAs, 401 Ks, and brokerage accounts. They have already earmarked around $100,000 for future health care, which is a good starting point. 

Their current property sits on around 500 acres, which is sizable, to say the least. Valued between $2 and $3 million, the Redditor believes there is room to carve out anywhere from 2 to 5 lots, which could create some income down the road if necessary. 

In addition, they are looking at a future inheritance valued between $400,000 and $800,000. Last but not least, we have to add social security, which is expected to be around $4,000 per month between the couple. 

The Recommendation 

I’ll admit that while I’m not a financial advisor, this seems like a pretty easy recommendation. Since they want to keep their expenses at around $120,000 annually, I’d say retirement now is more than feasible. At $10,000 a month, only $6,000 appears to be coming from their principal as long as social security continues, so they are pulling even less money than anticipated from their net worth. 

On top of everything else, owning 500 acres seems like it could be sold for more than just 2-5 properties. While we don’t know the area, you can arguably feel many homes in this space, so there could be more income than they anticipated. Plus, you have the inheritance issue, which has yet to be factored into any math. 

While healthcare costs could increase, starting with $100,000 already earmarked sounds like a good bet for now. However, to be safe, I would double this number. 

It feels right to say yes to this retirement recommendation, given that this Redditor has already met with Fidelity and been advised that they can retire now. However, I can’t get over the notion that the social security payout feels low, although it does depend on how much has been contributed over time.

The Takeaway

While the quick recommendation is that this couple should be able to retire now comfortably, there are a few flags. The Redditor himself is concerned about not being able to get a job again in the future, but I’m not sure why he’d want to go back to work. Separately, the small(er) numbers for social security and likely too low reserve for health care are two things they should circle back and discuss with their financial advisor. 

Ultimately, this couple seems to be cautious about spending, and there was no mention of big purchases on the horizon. Considering a potential inheritance and the ability to sell land, I think they are in strong enough financial shape that stepping away from full-time work is a reality this year. 

Let’s be optimistic for one minute and say that, ideally, they have closer to $6 million in total assets between the portfolio, house, and inheritance. This further emphasizes my belief that they will live comfortably while retired.