Personal Finance

I'm 40 making $300k a year but have no work-life balance - how close am I to being able to retire?

Christy Bieber

Published: January 25, 2025 9:06 am

Before retiring, it’s critical to make sure you have the funds you need to support you for the long haul– especially if you are only in your 40s when you call it quits. One Reddit poster is trying to decide if he’s ready, and he shared his details in a thread to get some opinions on whether he can pull the plug on his career soon.  

The Redditor is 40 years old and makes $300K in annual gross income. Because he lives in a high-cost-of-living area, he spends $200K annually even though his primary home is paid off. He has $2.6 million in real estate investments that yield him $40K per year, $2.4 million in a brokerage account, and $2.1 million in an IRA. 

He hates his job, though, and says he has no work-life balance. Given that he’s got a lot of money and is tired of working, he’s wondering how far away he is from being able to hand in his final notice. Sadly, though, it may be longer than he thinks.

Why the OP could have to put off retirement for a long time

The OP has a few problems in terms of being able to retire early.

The first is that he isn’t going to be able to access his IRA for a while if he retires now since you typically can’t use those funds when you’re under 59 1/2 without incurring substantial penalties.

Without the ability to draw from that account, he basically would need to support himself from his brokerage account and real estate investments.

The upside of that is his retirement funds can keep growing, but the downside is that he’ll be living off $40K in real estate plus the $88,800 his brokerage account can provide at a safe 3.7% withdrawal rate. That’s not nearly enough to cover his $200K in spending — especially since early retirement comes with a host of add-on costs like private health insurance without an employer subsidy to help defray the expense. 

It may not matter much with millions in the bank, but retiring at 40 also means you’re unlikely to have a career with 35 years of solid earnings. Since the Social Security benefits formula calculates benefits based on your 35 highest-earning years (after adjusting for inflation), the Redditor would find himself likely getting a much smaller future benefit if he left work at 40.  This means he’ll need to rely on his savings even more, which makes the stakes even higher in terms of making sure the money lasts. 

When will he be ready to retire?

The OP is likely to be stuck working for a while yet, in large part because he’s spending a lot of money and in part because some of his money — the cash invested in real estate — isn’t producing a great return.

He has a few possible choices for what to do since he’s fed up with work. One option is to drastically reduce spending so his savings can support him. The other is to work for longer and make sure his accessible funds can provide him with the $200K in income he needs to spend. A financial advisor can help him to figure that out, based on how his assets are distributed and his risk tolerance.

Ultimately, the OP doesn’t want to stop work too soon, especially when he spends a lot. Making sure he’s in a good place before leaving his job will ensure he is not left with major regrets.