I’m 51 looking to retire early and spend $500k a year – if I have $6.3 million saved, is that enough?

When you hit 50 years of age, it’s not unheard of to start thinking about when you want to call it quits from the full-time workforce. There’s a definite desire to start considering how to enjoy your golden years, but you can’t do that while working a 9-5 with limited vacation days every year. 

This is precisely the case one Redditor is going through, according to his post in r/fatFIRE. At 51, he wants to leave the workforce as soon as possible. However, this Redditor’s situation is unique as he wants to stop working while his partner keeps going for another 10 years. 

What made this post so interesting is that while the Redditor wants to retire now, his partner wants to keep working, which isn’t an unheard-of imbalance in a relationship. It will be interesting to see how this works out if the Redditor ever posts a follow-up. 

Where Things Stand

According to the Redditor, he is a 51-year-old male making around $400,000 annually. His partner is in their late 40s and makes around $1 million annually. He plans to keep working for another 10 years. 

The couple has one child in high school, while a 529 currently has around $200,000. The couple estimates the account will have around $500,000 by the time this individual is ready for college. 

Looking at liquid assets, the couple has $3 million in T-Bills, $1.75 million in VOO/QQQ, and half a million in bonds and ETFs, while another $250,000 sits in dividend ETFs. They have a net worth of $6.3 million, with around $2.5 million in tax-deferred annuity/retirement accounts. 

The Redditor clarifies that they plan to continue living in a high-cost-of-living area with approximately $500,000 in annual spending. Assuming the working partner continues to receive health care, we know that the cost will be covered for the next 10 years, but as far as other expenses, it begs the question of why the Redditor is worried about whether they have enough saved for now. 

The Major Concerns

First and foremost, there is almost universal agreement in the comments section of this post that this Redditor needs a new or better financial advisor. While I can’t give financial advice, I know that working with a financial planner, in this Redditor’s case, will have several advantages in mapping out their spending and financial future. 

One of the primary reasons there was a big flag around a new financial advisor is that the couple appears to be taking a very conservative approach toward investing with their current holdings. Some definite low-growth opportunities they currently invest in without being very tax-efficient can be changed. 

Ultimately, another concern is why this couple needs a $500,000 annual spending plan when they will have a fully funded 529 in the next few years. If the couple can lower their expenses, there is little question the Redditor can walk away now, especially with the other spouse still working. 

We know they have planned monthly expenses between $15,000 and $20,000 and a home cost of around $150,000, including mortgage, taxes, and maintenance. In addition, they want to travel between four and six times a year, totaling between $75,000 and $100,000. 

What Need To Happen

Let’s assume they stick to their $500k annual living costs and that the Redditor and his partner are retired. At a modest 3.5% safe withdrawal rate, their total savings, investments, etc., would need to be north of $14 million. 

The good news is that this is possible if the Redditor’s spouse earns up to $1 million annually over the next 10 years and gets more aggressive with investments. So, it’s not entirely out of the realm of possibility. Yes, the Redditor can retire now, but this assumes they meet with a qualified financial advisor and restructure everything to be more aggressive so they can spend the next 10 years building up a nest egg. 

The bottom line is that the Redditor is in a better financial place than he gives himself credit for, but it’s not without questionable investment decisions. If they can meet with a financial advisor and make some fast changes, walking away from work now is doable, but they should try to reduce some of their annual spending to be on the safe side until they start seeing more investment growth.