I Retired Early at 35 with $1.2 Million – Is It Sustainable at $3,000 per Month?

If you’re setting yourself up to be a member of the financial independence, retire early (FIRE) movement, there is likely a specific number you want to achieve to make it happen. It doesn’t even matter if you are hoping to move out of the country or just sit on your porch every day and watch the sunrise. 

For one Redditor posting in r/Fire, they have achieved an incredible goal of saving $1.2 million before turning 35. With this net worth and no plans for marriage or children, they are wondering if they are ready to call it quits and live comfortably on their savings and investments. 

Ready to Call It Quits

At 35 years old, this nurse has around $70,000 in a 401(k) account and Roth IRA, with her remaining investments split between stocks and a brokerage account. With a net worth of $1.2 million, it is clear that they are ready to retire and bid farewell to the workforce for good. 

Additionally, the Redditor is currently single and has no plans for marriage or children in the future. While I think it’s too early to say this is completely ruled out, she’s focusing on her current situation to establish her living expenses. 

To that point, the Redditor estimates that with rent, health insurance, and other monthly expenses, they will spend around $3,000 monthly. At this level, they are questioning whether or not early retirement is an option or if they need more years in the workforce. 

Is Retirement An Option? 

Generally speaking, most people in the FIRE world look at the 4% safe withdrawal rate as the best guide for determining how much you have to live on. According to this scenario, before taxes, and assuming all of her net worth is liquid, this gives the Redditor around $48,000 annually. Breaking this down to $4,000 monthly, or right around $3,120 after federal taxes, assuming there are no state income taxes. 

To be honest, if this were me, this number is just too close to comfort given the Redditor’s estimated expenses. All it takes is one medical emergency, one home repair, or any car accident to blow up her annual spending. 

More importantly, the current 4% SWR calculation is generally based on a 30-year plan, which means this Redditor could be out of money at 65. Now, there is the likelihood that the money she isn’t spending will continue to grow, but how much growth is never guaranteed. 

I’m fearful, and other Redditors chime in as well, that this Redditor is underselling how much she will truly need. Yes, she could try it for a year and see how things go, with the understanding she could re-enter the workforce down the road. 

In this scenario, there is a compelling argument to be made for consulting a fiduciary financial advisor. This individual can help model different spending scenarios that provide the Redditor with a positive outlook on retiring early. They might find out they need a few more years in the workforce, or that they are ready to call it quits today. 

Don’t Ignore Side Hustles

While this Redditor might want to give up nursing full-time, there might be an option to work in this field part-time. This might be an opportunity to maintain some additional income while reducing hours and stress. Perhaps a retirement community needs part-time help filling a role or someone to cover shifts at different hospitals when staff are absent due to illness. 

The bottom line is that completely writing off leaving the workforce based on the Redditor’s current financial situation is a tricky decision. There is too much that could go wrong, and not enough of a financial buffer to handle it all. This aligns with the idea that maintaining a small side income can help offset unexpected expenses, while the bulk of her savings covers her monthly costs. 

All of this said, based on the current math, I think that the Redditor is cutting it too close to the line. If this were me, I would want to work a few more years to create a little more of a financial cushion. As aggravating and stressful as another few years may be, it’s far better than leaving the workforce and realizing you are quickly running out of money and then having to go back.

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