I’m Not Yet 50 And Want To Retire In A Decade, Spending $600K Per Year. Am I On Track?

Some people are thankful if they’re able to retire with $600,000 in total. But this Reddit poster is a very different story.

Here, we have a 48-year-old who’s a high earner with a net worth that could range from $8 million to $29 million at retirement depending on the value of their assets. They’re looking to retire in a decade and spend $600,000 a year, or $50,000 a month — at least initially. And they’re wondering if they’ll be able to pull that off.

My first reaction to this post is “wow.” I mean, $50,000 a month is a lot of money. But rather than judge, I’m going to try to crunch the numbers and see if they work.

Doing the math

The poster here is thinking of retiring around age 58, which means that they may need their retirement savings to last for 35 years or so rather than just 30, which is what many people who retire in their 60s are told to plan for. So for this reason, I would not suggest that the poster use the 4% rule.

Instead, I think a 3.5% withdrawal rate is more reasonable given the earlier retirement date. And so if we do the math, to get to $600,000 a year in income, the poster will need their savings to amount to roughly $17 million at the time they retire.

Is this feasible? Maybe. The poster projects that they’ll have between $8 million and $29 million in assets by then, and $17 million is right in the middle. So technically, this plan could work.

But that projection also encompasses a huge range. And if the poster ends up with the lower end, then $600,000 a year in spending won’t be doable.

Chances are, the poster will have a better idea of what their nest egg will be worth closer to retirement, so they can adjust their spending plans at that point if need be. But for now, the best I can say is that their plan might work, or it may not.

Setting priorities for retirement

It’s hard for me to wrap my head around needing $50,000 a month in retirement. But if the poster is able to get that, good for them.

That said, rather than fixate on getting $50,000 a month, I’d recommend that the poster prioritize what they want to do in retirement in case they don’t end up being able to spend at that level. If they set those priorities, they may find that they’re still able to do the things they’ve dreamed of on half of that income, which they may need to settle for if their final savings number only comes in at the low end of their range.

I also think this poster should talk to a financial advisor about their goals. It’s clear that they’re pretty good with money if they’re looking at a minimum $8 million nest egg. But a financial advisor can help them run the numbers and get a realistic picture of what might be in store.