At 48 With $4.5M in Assets—Is It Time to Walk Away From Work?

Some people can’t wait to escape a bad job situation. But if you like your job, the decision to leave it may not be an easy one — even if you no longer need the paycheck because you’ve saved enough to be financially independent.

That’s the situation we have in this Reddit post. We have a 48-year-old female who’s married to a man her age in a high cost of living area. They have a net worth of $4.5 million, not including the property they own.  

Both the poster and her spouse have pensions coming their way in retirement and have a household income of $350,000 before taxes. They’ve managed to save well due to living a naturally frugal lifestyle and not having children.

In 2023, the poster says their total expenses, not including payroll and income taxes, amounted to just $65,000, which is very impressive for a high cost of living area. Based on this, it’s pretty clear that they’d be in a good position to stretch a $4.5 million nest egg for many years.

But should the poster really retire at 48 given that her job is important to her? Let’s dig in.

A tough situation

Retiring at 48 is pretty young. But there’s a reason the poster is thinking about it.

Both she and her spouse have parents who passed away at young ages. Because of this, they’ve always thought about retiring early to enjoy experiences while they can.

The problem? The poster is finding it hard to leave her job.

She calls her work meaningful and engaging. And she’s understandably having trouble coming to terms with the idea of no longer working.

A key question for the poster to ask

The poster here is in a great situation, because she technically has the freedom to decide what to do without financial worry. If she retires at 48 with $4.5 million, not including owned property, she and her spouse might need their nest egg to last 40 years or even longer (because the poster and her spouse are not guaranteed to pass away young just because their parents did).

A 4% withdrawal rate is often recommended for retirees, but that typically applies to a 30-year window of distributions. For the poster to play it safe, she might need to stick to a 2.5% or 3% withdrawal rate, depending on her investments (which she doesn’t share details of).

Going with the low end of that range, that’s $112,500 a year in income from savings — much more than what she and her spouse spend now. And that doesn’t include pension income, which will probably be pretty generous given their household income.

So if the issue is parting ways with her job, the poster should ask whether she can continue to do it in a more flexible manner. That could mean reducing her hours to part time or, if possible, seeing if she can do her work on a consulting basis. That could give her and her spouse the freedom to travel and do other things while not having to give up the job completely.

If she can’t continue working for her employer on a reduced basis, maybe she can do the same type of work freelance. Since she doesn’t need the income, she can afford to “take a chance” and see if that works out.

And if that fails, the poster could always find a way to volunteer her time for a meaningful cause. That could help her feel more fulfilled while affording her the opportunity to enjoy the early retirement she’s always dreamed of.

It’s a tough call either way. But the poster should discuss the situation with a few key people:

• Her spouse, who will be impacted by her decision
• Her employer, who can walk her through her options
• A financial advisor, who can help ensure that her portfolio is set up to last for what could be a long retirement

With any luck, she’ll come to a decision that works for her.

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