Personal Finance

I'm a 46-year-old divorcee with $4 million in the bank but my stressful job is burning me out - do I have enough to quit?

Ian Cooper

Published: November 24, 2024 10:47 am

Last Updated: January 1, 2025 2:41 pm

A similar question was recently posted on Reddit, which you can see here.

Key Points About This Article:

• While 46 is much younger than most retirees, it can be done.
• One of the best things to do if you’re serious about retiring at 46 is to consult with a financial advisor just to see if it’s a good idea.
• You’ll want to prepare for events that are out of your control.
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

Is it really possible to stop working at 46 with $4 million saved?

While 46 is much younger than most retirees, it can be done. However, before you pack up your office and bid adieu to work, there are several issues you may want to consider first.

For one, as of 2022, the life expectancy for the average American was 77.5 (74.8 for men and 80.2 for women), according to the CDC National Center for Health Statistics. So, if you want to stop working at 46 with $4 million, you have to consider your money will have to last you a good 34.2 years using current CDC statistics.

Excluding interest earned on a $4 million account, you can spend just under $117,000 a year before the money starts to run out.

Of course, you don’t want to run out of money by 80.2 with years to go. So, let’s now assume you’d earn interest on the $4 million. Using 1% (even though most savings accounts fall short of that rate these days), for our example, you’d earn yearly interest of $40,000.

Also, if you haven’t already done so, speak with a financial advisor about a balanced investment portfolio that generates sufficient returns, while minimizing risk to ensure your money lasts.

If you do stop working at 46, plan ahead.

One of the best things to do if you’re serious about retiring at 46 is to consult with a financial advisor just to see if it’s a good idea.

For one, at 46, Social Security benefits don’t kick in until you’re 62 at the earliest. Medicare doesn’t start until you’re 65. So, you’ll need to cover your insurance and medical costs on your own for the next 34 or so years. Plus, if you withdraw funds from an IRA or a 401(k) plan before the age of 59.5, you’ll get hit with a 10% penalty.

Three, you’ll want to prepare for events that are out of your control, such as a stock market crash, a medical emergency, or your car finally kicked the bucket, for example. Three, you need to budget well. While $4 million could provide you with a cushion, you don’t want to run out of money too fast, especially if you’re depleting your savings on lavish vacations.

Also, have an emergency fund set up for the unexpected. Unfortunately, the only certainties in life are death and taxes.