We have $6 million in liquid assets and my partner earns $500,000 – can we sustain our lavish lifestyle without me working?

A Reddit user with $6 million in liquid assets is trying to figure out whether she needs to go back to work in order for her and her family to support their lavish lifestyle.

Her husband earns $500,000 with the potential for significant compensation increases, and he wants to work until retirement age. However, the original poster (OP) is in her early 40s and is thinking of staying home with the kids– despite the fact recruiters approach her regularly with offers of jobs that would pay around $500K a year. 

She is worried, though, about whether their money is likely to last given just how much they spend as the couple currently has $550K per year in annual expenses and plans to do so for the foreseeable future. 

So, what should she do? Should she say goodbye to the business world, or would resuming work be her best option? 

Can you sustain big spending with a big nest egg?

Spending $550K a year is a lot of money, so it is understandable for the OP to wonder if this is sustainable. 

While a $6 million nest egg is a lot of money, the reality is that it is not enough to allow for $550K in annual spending. At a safe withdrawal rate of 3.7%, a $6 million nest egg would only produce $222k per year. That’s less than half of what the OP wants to be able to live off of.

Now, her husband will be working, though — and while he isn’t making quite enough now to fund their lifestyle, she said his compensation will hit $750K per year within a few years and go up from there. So, she wouldn’t need her savings to produce the entire $550K. She’d only have to generate around $50,000 from it for a few years. After that time, her husband’s salary would more than cover their costs, and the couple could invest more. 

Of course, her husband will eventually retire, but that probably isn’t going to happen for at least 20 years, given that the couple is in their 40s and he said he wants to work until a normal retirement age. If the OP left her $6 million nest egg invested and didn’t add another dime, it would grow to just under $28 million over the next two decades, assuming an 8% average annual ROI.

A nest egg of $28 million could produce over $1 million in income per year for the couple. With numbers like that, there’s no reason for the OP to go back to work unless she wants to for personal fulfillment reasons. 

Talking to a financial advisor can help you make the best choices

While the OP is obviously in a good position to stay home and stop working, the couple may still want to talk with a financial advisor about their plans.

A professional advisor can help them evaluate different scenarios where the Redditor either works in some capacity or quits for good. The advisor can also work with them to determine how best to invest their funds and how to ensure that their desired spending will be within reach based on how much they contribute to — and withdraw from — their accounts over time. 

Getting this kind of professional advice just makes good sense, especially when the couple is already on track to a secure future and needs to keep making smart choices to make that future a reality. 

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