If you’re set on retiring early, your work is stressing you out enough such that you fear your health is on the line, and you’ve got more than enough to make the move, it’s probably better to retire sooner rather than later. Undoubtedly, checking in with a financial planner to double-check the nest egg and budget is a wise move before finally pulling the trigger. Either way, anyone in a similar situation should prioritize their health above all else, even if it means retiring with a moderate lifestyle as opposed to one of luxury.
For someone with a family history of health ailments, it’s wise to shift gears sooner rather than later to reduce one’s odds of suffering a similar fate. While better stress management can help allow one to work without letting their blood boil, it’s often difficult when unforeseen stressors cause cortisol levels to spike unexpectedly.
Indeed, working in a high-stress environment with a family history of heart disease in one’s 50s brings its own slate of risks. If one has a “massive portfolio,” the big question is why one would even think about risking one’s health any further? In my humble opinion, it’s time to draw the line in the sand and retire, rather than taking a risk that I view as quite unnecessary.
Of course, others may be more willing to swim to greater lengths to maximize the size of their nest egg. Sacrificing one’s health to leave more behind for the children, though, probably wouldn’t sit well with most families. In any case, let’s have a closer look at the “massive portfolio” and see if it’s up for the task, as this 48-year-old, with a 38-year-old spouse who’s not working, looks to hit the retirement button.
This “massive portfolio” can really pull its weight, but is it large enough to support three people?
This really is a massive portfolio, with a $2 million home, $2.8 million invested in stocks and equity funds, $700,000 in bonds, $1.2 million in other retirement accounts, $20,000 in T-Bills, a $120,000 529 for the son’s future tuition, and even $100,000 in Bitcoin. With a relatively small amount left on the mortgage ($400,000), the net worth comes in at just north of $7 million. In short, yes, it’s large enough to support an early retirement and two dependents. With a fairly lavish lifestyle and just about every base covered, the question I have for this Reddit user is, “What are you waiting for?”
The annual expenses are projected to come in at $200,000, which is covered by a 3% withdrawal rate. While the withdrawal rate is already conservative (a full percentage point lower than the more popular 4% rule), I’d suggest the Reddit user explore a more conservative asset allocation as they transition into retirement.
Perhaps a more conservative mix of assets could be explored in retirement
Now, that doesn’t mean the stocks should be dumped for bonds. But it does mean perhaps thinking about liquidating the Bitcoin exposure, perhaps using the proceeds to chip away at the mortgage debt. Indeed, Bitcoin seems a bit out of place in a retiree’s portfolio, given its intense volatility and unpredictability in the face of stock market chaos.
Indeed, $100,000 is a lot to have in a cryptocurrency for most. But for this individual, it represents a pretty small slice (less than 2%) of the overall portfolio. And while a little bit of speculation may be okay for some, I’d definitely think about taking on a more conservative stance as one re-evaluates their risk tolerance in the shift to a happy and hopefully healthy early retirement.
As always, someone looking to derisk and rebalance should reach out to a financial advisor who can help position the portfolio to withstand various market conditions.
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