I’m 52 and earning $350k a year – can I afford to retire once our youngest child get their own health insurance?

A Reddit user is wondering if he is ready to retire once his youngest child gets health insurance coverage. He has consistently earned $350K per year or less and lives pretty frugally but he has some concerns about producing a steady income stream, covering his healthcare costs, and finding happiness with the uncertainty of early retirement.

So, can he afford to retire and how can he address his worries?

Running the numbers is key to deciding whether to retire

The first thing the Redditor user — and anyone considering retirement — needs to do is run the numbers to see if their investments will produce enough money to live on. This is especially important for anyone who is thinking of retiring early, like this poster. 

The poster said he had been steadily employed for 30 years and has been aggressive about investing, so he has managed to acquire a $1.2 million home and five cars in cash. He also has:

• A 401(k) with $2.1 million
• A self-directed IRA with $2.4 million
• An investment account with $3.5 million
• A private equity account managed by a big brokerage firm with $800K
• $150K in cash

He also said he has a certified financial planner working on an investment strategy.

Based on those numbers, with a net worth of around $10 million, and close to $9 million invested not including the house, he is obviously in great shape. Since he said his kids’ college tuition is already fully funded and they live pretty frugally with no expenses except emergencies, insurance, incidentals, and a few vacations, he very clearly has plenty of funds to quit working.

In fact, at a recommended 3.7% withdrawal rate, he could generate around $333K in income. While that’s less than what he’s making now, he doesn’t need to keep aggressively saving a big portion of his income anymore so he should be able to live on his investments without any problems. 

How to make a plan for a secure retirement 

Since the poster can afford to retire without question once his youngest child gets their own health insurance, the only thing left to do is address his other questions, including how to generate a steady income stream, how to handle healthcare, and how to find happiness in early retirement. 

Healthcare shouldn’t be too hard with his income, as he could buy an individual plan on the ObamaCare marketplace and pay for it without a problem. The financial planner he’s working with should also be able to help him develop a tax-efficient plan for producing a steady income, which also shouldn’t be an issue given how much money he has.

As for how to spend his days, he’ll have to think about what makes him happy and find ways to do more of it. This could mean participating in a hobby, deciding to travel more, volunteering or even working part-time, or simply enjoying spending time with friends and family.

He should think about what he wants to do and have some idea of how he’ll structure his days and maintain connections after retiring — but with plenty of money coming in, he has the freedom and flexibility to do what he wants as a retiree which is a great position to be in. 

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