Is $3 million in my 30s enough to consider stepping away from the grind – or am I missing out on more?

A Reddit user has achieved a major financial milestone that most people never hit in their lifetime — and he’s only in his 30s. The poster explained that he has become a self-made multi-millionaire with a $3 million nest egg. However, he’s not sure exactly where to go from here. 

The poster said that he doesn’t know many people in his financial position, so he was looking for some advice on what the rest of his life should look like. Specifically, he wants to know if he’s ready to consider retiring and how to decide; how to determine how much money to allocate to fun spending; and how his life circumstances might change if he decides to have kids. 

Is $3 million in your 30s enough to retire?

While it’s undoubtedly very clear that $3 million is an impressive nest egg at such a young age, deciding whether or not it is enough to retire on is a different question. At a safe 3.7% withdrawal rate, a $3 million nest egg would produce around $111,000 in income.

Maintaining a safe withdrawal rate is absolutely crucial when leaving work young because you can’t afford for your money not to last. Of course, this does limit the income you have to live on, since $3 million is a lot — but when you’re relying on it to fund your lifestyle over many decades, the numbers become less impressive.

Of course, $111K in income would be considered a good living by many. This poster may not be one of them, though. Since he was asking about luxury cars and other splurges, he may envision a lifestyle where he can spend whatever he wants without having to think about it. An annual income of $111K may not provide that to him, depending on whether he lives in a high-cost-of-living area or a low-cost area. 

The poster also mentioned potentially having kids, which would bring a whole new set of expenses. Supporting multiple children and paying for them to go to college — not to mention paying for health insurance for a family without an employer to subsidize premiums — may mean that $111K is not nearly enough to live the way he wants. 

There are also other factors to think about with very early retirement, as well, including how it will shrink your Social Security benefits since you have far less than the 35-year work history your benefits are based on. And, you’ll have to fill your days somehow as well, along with explaining your early retirement to friends and loved ones who may not know how much wealth you have. 

Consider lifestyle issues as well as your finances when you make retirement choices

Having a lot of money is a prerequisite to retiring young, but it is definitely not the only thing to think about before quitting work in your 30s. You should get an idea of the lifestyle you want to live, make sure you have something to fill your days that is meaningful to you, and create a spending plan that allows you to live the way you want. 

Once you have an idea of what you plan to do with your early retirement, you should work with a financial advisor to make sure you have the funds to accomplish those goals. An advisor can help you to see what life will look like given the size of your savings account, and can also help to ensure that you are making the right choices to protect your nest egg, minimize your taxes, and make the most of the hard-earned money you’ve saved to provide yourself with a secure future.

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