Personal Finance

I'm in my late 30s with over $7 million saved for retirement - I still feel like I need more of a cushion though

Maurie Backman

Published: January 16, 2025 3:11 pm

Key Points from 24/7 Wall St.

• With more than $7 million socked away for retirement, you’re clearly doing something right.
• Whether a nest egg that size will allow for an early retirement depends on your desired lifestyle.
• Consider a hybrid approach to retirement to avoid both financial stress and boredom.
• Retiring early is possible, and may be easier than you think. Click here now to see if you’re ahead, or behind. ^(Sponsor)

I have friends in their late 30s with anywhere between $300,000 and $500,000 saved for retirement, and I happen to think they’re in a pretty good place. If they continue on that path, they can easily retire with several million dollars, provided they keep funding their 401(k)s and investing their money in inflation-beating assets like stocks.

That said, most of my friends in their late 30s aren’t going to be able to retire anytime soon. And that’s okay, because it’s not necessarily a goal they have.

This Reddit poster in their late 30s, however, is looking at early retirement. And with a liquid net worth of $7.8 million invested largely in broad index funds, they’re in a great position to do so.

However, they’re wondering if they’ve saved enough to retire soon, or if they need more of a cushion. My answer? It depends what they want their lifestyle to look like.

It’s a matter of personal choice

For some people, retirement means spending lots of time volunteering, staying local, and enjoying hobbies. For others, it means living in a glamorous city and traveling often.

The reality is that with well over $7 million in assets, it’s possible to retire very early and still have plenty of money to spend on an annual basis. In fact, based on a $7.8 million portfolio, a 3.4% withdrawal rate results in $265,000 of annual income. It also helps, financially speaking, that the poster here does not have kids, so they don’t have to worry about expenses related to college, nor do they and their partner have an extra mouth to feed.

But the question is, does $265,000 a year make for a lifestyle they’re happy with? For some people, it might. But if it’s not enough to maintain their preferred standard of living, then I’d advise working a bit longer and building up more of a cushion.

A compromise may be in order

The poster above may be unique in the sheer amount of wealth they’ve amassed by their late 30s. But no matter how much money you have at that point, if you’re looking to retire very early, you’re going to have to stretch those funds a long time. So to that end, you — and the poster above — may want to consider a compromise.

Rather than retire completely at a very young age, consider working part-time or starting some type of business that consists of work you enjoy doing. It could be creative work, or work that means something to you. This not only gives you a bit of income, but it also gives you something to do with your days.

The danger of retiring very early isn’t just running out of money. You risk finding yourself at a loss with what to actually do with your time.

Of course, whenever you’re faced with a giant financial decision like early retirement, it’s a good idea to consult a financial advisor for customized guidance. If you end up with a lot of money like the poster above by your late 30s, it means you clearly know a thing or two about saving and investing. But there’s more to the story. And a financial advisor can help you look at the big picture and come up with a strategy that works for you. They can also help you understand some of the pitfalls of a very early retirement and, ideally, work around them.