Personal Finance

I thought I needed $5 million to retire. I now have $7 million and it still doesn't seem like enough - am I wrong?

Christy Bieber

Published: February 20, 2025 6:19 am

How much is enough money to retire? A Reddit user recently posted this question because he’s struggling with concerns about not being ready to quit working — despite surpassing his original savings goals. In fact, the original poster (OP) said that while he once wanted to have $5 million invested for retirement, he now has $7 million and he still feels like he is going to fall short. 

A $7 million nest egg is a whole lot more money than most people have, so it may be hard to believe that this Redditor is struggling. Still, many people have a hard time making the shift to actually spending all the money they worked so hard to save, so the OP’s situation isn’t an uncommon one. 

How much money do you actually need to retire?

The OP’s big problem here is that he is making retirement decisions based on a feeling that he may not have enough money. You never want to make big financial decisions like this on the basis of feelings. Instead, what you need to do is to actually run the numbers. 

The Redditor said he is 50 years old and his wife is 46. They have four kids at home, and they have $3 million in investment properties as well as $1.5 million in a 401(k), $1.5 million in a brokerage firm, and $300K cash. A $700,000 primary home is also a part of their net worth. As far as his spending, he estimates that they spend around $120K per year. 

So, to decide if he is ready to retire, he’d need to consider a couple of things:

• What are his income needs? While he says he spends $120,000 per year right now, he could see some big increases in expenses in the coming years. Since his kids live at home, that suggests college — and the huge bills that come with it — are still on the horizon. Since he and his wife are also a long way away from Medicare age, they could see their healthcare expenses increase dramatically if they stop working — especially if they also need to buy insurance for four kids. 
• What is a safe withdrawal rate? That’s the amount that he can take out of his retirement and investment accounts without risking running out of funds. Experts recently advised that sticking with a 3.7% withdrawal rate is a good choice if you want to maximize the chances of your money lasting for at least 30 years — and the OP probably wants his to last at least that long since he is so young. 

Since the OP’s primary home isn’t going to be a source of funds, let’s assume he’s basing his withdrawals on his net worth minus the home, so he’d be able to withdraw 3.7% of $6.3 million. That would give him an annual income of $233,100. Since he’s spending far less than that amount now, he may be OK with that withdrawal rate even if his spending does go up due to the issues mentioned above.

Always run the numbers — and consider getting professional help

While the OP may be feeling anxious about retirement and feel like he isn’t ready to stop working, he should not make that decision without a detailed look at the math mentioned above. In fact, there may be even more issues to think about, like when he’ll claim Social Security, how his early retirement decisions affect his Social Security benefits, and what would happen to either spouse financially in the event one of the two died. 

A financial advisor can provide guidance on these and other issues to help ensure the OP is truly ready for retirement. Working with an advisor can also go a long way towards making him feel comfortable with his choice to retire so he can really enjoy the fruits of his labor rather than working longer than he should or experiencing unnecessary financial stress as a retiree.