I’m 52 with $4 million and want to slow down at 55. Is there a flaw in my plan?

There are a lot of people who go from working full-time and earning large salaries to retiring and earning nothing at all. That, frankly, can be pretty jarring. So some type of transition phase may be a better bet.

That’s what this Reddit poster seems to be going for. They’re 52 years old with a net worth of around $4 million. They no longer have a mortgage, they have college tuition for their kids already saved for, and they’re trying to focus on building savings for a few more years before slowing down at 55.

The poster wants to know how to approach this next stage of life, and it’s smart of them to be thinking about this ahead of time. There are a couple of options the poster can look at to tackle that “in-between” period of their mid-50s through their early- to mid-60s.

Option 1 – work a less stressful job for a few years

The problem with retiring at 55 is that you’re not old enough to claim Social Security, and you’re a good 10 years too young to be covered by Medicare. This means that unless you have a pension you’re entitled to right away, you could end up withdrawing a large chunk of your savings during that in-between period.

The poster says they can get a pension, but not at 55. So they’ll need other income in the interim.

For this reason, one thing the poster may want to do is cut back on work at age 55 but try to earn just enough money to cover their expenses. Since they don’t have a mortgage to pay anymore, this may be doable on a lower salary than what they’re used to.

This is also a good way to transition into retirement rather than go from earning a nice income to earning nothing. It could put less of a strain on the poster’s savings and allow for less stress overall.

Plus, if the poster stops working completely at such a young age, they may get bored. So a slower-paced job could be a good fit.  

Option 2 — retire at 55 but live more frugally

The poster has a big thing going for them — their $4 million net worth. Because of their large amount of savings, it may be possible for them to retire at 55 and cover their costs for as long as they need to.

But until Social Security and their pension kick in, and until Medicare coverage becomes available, the poster may want to adopt a somewhat frugal lifestyle. If they withdraw too aggressively from their savings starting in their mid-50s, they do increase the risk of depleting their nest egg in their lifetime.

No matter which option the poster goes with (and it could be one not mentioned here), I would love to see them sit down with a financial advisor and discuss different strategies. A financial advisor can also make sure their portfolio is set up to produce income without taking on undue risk.

But all told, the poster’s general plan of slowing down at 55 should work for them. And it’s something you may want to plan on, too.

There may come a point when you can no longer handle the grind of an intense job. So you may want to have a slowdown plan in place as well.

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