Personal Finance

Am I crazy for considering retiring early after suddenly becoming a multimillionaire?

David Beren

Published: November 21, 2024 1:30 pm

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• Some people aren’t sure if they want to retire or keep working after coming into money. 
• This Redditor received money after a corporate buyout. 
• She could take a sabbatical and then come back to work. 
• Also: Are You On Track to Retire? Take This Quiz and Find Out (Sponsored) 

If you think about your idea of retirement money, it could be a very different picture than that of someone else. There is no “right” number to retire, only the number that gets you to a comfortable place to step away from the workforce. 

This is true for our 45-year-old female Redditor who posted in r/ChubbyFIRE. A larger company purchased her company, resulting in a multi-million dollar windfall, and now this Redditor is trying to decide how or if she should move forward. The most important question is whether or not she should continue working.  

What I enjoyed about this scenario is that the Redditor is practical. She knows she has enough money to be comfortable but not enough to think she’s 100% retirement-ready. 

The Scenario

With this Redditor scenario, we have one of the easier situations to try and provide advice. At 45, the Redditor came into what she describes as a “chunk of cash” after a bigger party purchased her startup. 

While she doesn’t give an exact amount, she does hint toward the number being somewhere in the $1 to $2 million range. At this rate, she now considers herself on the lower end of FIRE (Financial Independence Retire Early) and wonders if she is the only one of her co-workers considering such a move. 

Perhaps most importantly, she’s still not convinced she must retire. She says she is “on the fence” as she still believes she could build a bigger sense of security. However, things go awry because none of her co-workers appear to be thinking similarly, and so that has our Redditor wondering if she’s in the wrong. 

The Recommendation 

Look, I’m not a financial planner, and I don’t pretend to be one, so the best course of action is to talk to a professional. That said, I don’t think this Redditor is truly alone in her thoughts, but she feels this way because her co-workers do not share her retirement considerations. 

At 45, she can continue working and still have a growing nest egg. There is no mention of family here, cost of living, or other details that would complicate this recommendation. Instead, we must consider that this woman is single, lives alone, and doesn’t have a high cost of living. 

All of these considerations aside, the reality is that even $2 million untaxed will be difficult to retire at 45. With another 20 years before she can receive Social Security, we will assume she’s solely living on this money. 

What has to happen here is that she can continue to work, potentially for the same company, and keep going as is. She could also be more picky about going to another company and doing work that doesn’t regularly stress her out. In other words, she can now live debt-free, travel, enjoy some finer things, and continue working without significantly draining her new savings. 

The Takeaway

Even if $2 million fell into my lap tomorrow, I’d immediately recognize that I couldn’t retire. I know I wouldn’t have to stress as much, but I’d keep the same job, live in the same house, and not do anything crazy. 

The best thing this Redditor can do now is take a little bit of the money to enjoy herself but invest the rest. She has 20-plus years to make a significant amount of interest and earn herself even more money to draw on. 

Let’s say she invests in CDs or an HYSA at 3%. In 20 years, with compounded interest, she would have approximately $3.6 million when she turns 65. That is a much more comfortable number to retire on and I’m guessing most of her co-workers would agree.