Personal Finance

I just retired at 53 and paid off my cash-flowing rental properties - why am I still nervous to spend my nest egg?

Marc Guberti

Published: March 1, 2025 8:03 pm

You can find a lot of inspiring success stories in the Chubby FIRE subreddit. Some people talk about how they accrued millions, but the group is also filled with people who ask for advice. 

A 53-year-old Redditor recently posted in the subreddit and laid out his financial situation. He has a $5.5 million net worth that grows each year, and he just retired. He’s married, has no children, and owns three paid-off rental properties. He also owns a house in Southern California with no mortgage.

The wife still works 20 hours per week as a part-time remote therapist with a salary that ranges from $75k to $85k per year. The husband has $800k in a high-yield money market account that brings in $25k in annual income.

He said he may consider buying more rentals if a market crash occurs, but he is wondering if he is using Lean FIRE or Chubby FIRE. I’ll share some of my thoughts, but if you are looking for specialized advice, a financial advisor may be better.

The Redditor Still Saves Money

Although the Redditor is sitting on a big nest egg, he’s not plowing through it. He saves approximately $2k to $3k per month. That’s because he makes income from his rental properties that does not show up as income due to depreciation and property taxes. 

Buying assets that produce cash flow makes it easier to support your lifestyle. These investments continue to produce income for many years, and real estate investors can use leverage to accumulate multiple properties without making all-cash purchases. That’s part of the reason the Redditor has three fully paid-off rental properties and a paid-off primary residence.

Still Some Anxiety About Spending Too Much

The 53-year-old is still a bit anxious about spending too much money ever since he stopped working at his IT job, where he made $185k per year. 

While he has a high net worth and cash flow from rental properties, the anxiety may make sense. Suddenly, going from $185k per year to no active income is a significant change. Furthermore, the Redditor isn’t obligated to splurge right away. Some people retire with high net worths without spending significant money. This setup allows them to continue growing their nest eggs.

A conservative approach may not seem like it matters too much initially, but if any major expenses like health bills come up, the Redditor will be happy about saving money. Granted, he already has a $5.5 million net worth, so he doesn’t have to live cheaply, but frugality makes sense for anyone, regardless of their wealth.

People who are cheap try to avoid necessities to save a few extra dollars. Frugal people buy the necessities and occasionally use the money for discretionary purchases.

The 4% Withdrawal Rule Isn’t Needed in This Case

The 4% withdrawal rule is a popular guideline that helps retirees assess how much they should have when they retire. For instance, if you spend $100k per year, you should have a $2.5 million portfolio. That way, a 4% withdrawal results in $100k.

However, the Redditor is generating enough cash flow to fund their lifestyle. The three rental properties net $5k per month ($60k per year), while his high-yield savings account brings in $25k per year. He also earns an additional $30k per year from a dividend-paying bond fund that’s sitting in his IRA. 

This setup allows the Redditor to earn approximately $115k per year without withdrawing any funds. Depreciation and property taxes minimize the tax bill and set him up nicely. His post in the Chubby FIRE group demonstrates the power of real estate investing and accumulating assets that produce cash flow.