Personal Finance

We're in Our 50s With Over $3 Million Saved Up and Want to Retire Next Year. What Should We Do?

Maurie Backman

Published: March 12, 2025 7:41 am

Early retirement isn’t something everyone can pull off. It takes a lot of money to be able to leave the workforce early — especially if you’re doing so in your 50s.

Even if you’re in your late 50s, it could be a few years until you’re eligible to claim Social Security. And if you’re in your mid-50s, it could be a decade until you’re able to get health coverage through Medicare. So it’s important to think the decision through carefully.

But it may be that you’re comfortable with the amount of money you’ve saved and are burned out at work. In that case, retiring in a year could be a smart thing to do for your mental and physical health.

But it’s also important to approach that situation carefully. Here’s what to do.

Map out a budget

Once you retire, you’re going to be living off of your savings — especially if you can’t sign up for Social Security right away. So it’s important to have an understanding of what your monthly expenses will look like. And it’s also smart to make sure you can cover them without draining your savings too rapidly.

Go through your bills and create a budget so you know what you can expect to spend. And don’t forget to account for the cost of health coverage, which could be expensive if you’re paying for it on your own.

Assess your portfolio

It’s okay to take on some risk in your portfolio even when you’re entering retirement. But you don’t want to go overboard in that regard since you’ll also be living off of your savings.

Spend some time looking at your asset mix and make sure it’s suitable for your soon-to-be situation. You may want to limit the stock portion of your portfolio to 60% so you’re not overly exposed to market volatility.

It’s also a good idea to make sure your portfolio is loaded with income-producing assets, like dividend-paying stocks or bonds. That extra income can serve as a hedge in periods of market decline, not to mention give you extra funds to live on.

Make sure you have ample cash

It’s a good idea for retirees to have enough cash to cover a year or two of living costs. That way, if the market nosedives, you won’t have to lock in losses in your portfolio off the bat.

If you’re aiming to retire next year, you may want to take new funds you’re saving and put them into cash. With CD rates still being pretty generous, it may not be a bad idea to set up a CD ladder. Or for more flexibility, stick with a high-yield savings account.

Talk to a financial advisor

If you’ve managed to accumulate $3 million by your 50s, it means you’re clearly pretty good about managing your money. But that doesn’t mean you can’t benefit from outside help.

A financial advisor can help you understand the costs and risks of early retirement. They can also help you set up a portfolio that’s likely to serve your needs. Finally, they can guide you on additional smart moves, such as maxing out a health savings account if applicable, to make before you end your career for good.