We’re in our 40s and have saved 5x more for retirement than we planned – why are we still nervous to quit our jobs?

Retiring early is a dream for many, but taking the plunge and giving up work in your 40s can actually be pretty scary. One Reddit user recently posted about his own fears about finally quitting work — despite the fact he has saved much more for retirement than he initially anticipated. 

The Redditor explained that despite the fact he has enough money to support himself, and much more money than he initially planned, he can’t shake the fear that a market crash could take it all away and leave him struggling. So, should the Redditor face down his fears and retire or does he have reason to be concerned about calling it quits?

When is fear of retirement unfounded?

For some people thinking about early retirement, financial concerns should be an obstacle. If you need your nest egg to support you for many years, it’s critical to choose a safe withdrawal rate and you don’t want to cut it close and leave work if you have just enough to cover your needs.

That’s definitely not the original poster’s situation though. The OP explained that he is 43 and his wife is 40. Initially, he wanted to save $3 million before retiring, then $10 million, then $15 million. The amount he is actually worth right now is $19 million. Despite having a literal fortune, though, he still fears he could lose all he has in a stock market crash and is concerned that he’s not ready.

He and his wife have a combined $1 million annual income and while they don’t dislike their jobs, they do have kids that keep them busy. He’d like to stop working and spend more time doing those family activities but still feels like he might need more. In reality, however, he almost assuredly does not. 

At a very conservative 3.00% withdrawal rate, which is well below the limit experts think is safe, a $19 million nest egg would produce $570K in annual income. Since the OP said he needs $500, he has a big cushion — and that’s if he withdraws only a very small percentage of his account each year. 

With those kinds of numbers, it is very clear that there’s virtually no risk of running out of money unless the OP suddenly decides to become totally financially irresponsible, start spending millions, and squander his investments by buying high-risk assets that don’t pay off. There is no reason to believe that is going to happen, so the OP should stop worrying and enjoy the retirement he has been hoping for. A market crash isn’t going to wipe him out and he can afford to keep several years of living expenses in cash to wait out downturns, so there is no reason not to stop working.

How to overcome your money worries

Of course, it’s easy to say on paper that the OP should just quit his job and enjoy his $19 million. However, actually taking that leap may mean overcoming major psychological barriers. Many people develop ideas about money when they are young or preconceptions about retirement as they start to age, and those deep-seated beliefs can be hard to overcome if you’re going to go against the grain and retire early. 

The OP is going to need to become comfortable with the idea of quitting work and spending his savings, and he may want some help overcoming his fears about the impact of a crash. A financial advisor can offer this assistance, working with the OP to develop an appropriate asset allocation plan and to run through different financial scenarios to prove to him his retirement is very likely to be a secure one. 

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