Would you retire at 55 with 1.4m?

Listen to your gut feeling. Retirement falls in the "better to have it and not need it" category. "When you need and don't have it (money)" will spell troubles in the old age. Just because someone else didn't see SORR doesn't mean you won't see it. I always say that for a retirement longer than 30 years, one should use lower than 4% WR. FWIW we use 3% WR for a 40 years retirement. YMMV.
 
pjigar said:
I always say that for a retirement longer than 30 years, one should use lower than 4% WR. FWIW we use 3% WR for a 40 years retirement. YMMV.
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Karsten at Early Retirement Now has shown that an initial withdrawal rate of 3.25 %, adjusted for inflation each year, has survived every 60-year period starting as early as ~1871 with full capital preservation. This means the final inflation-adjusted balance has always been at least equal to the starting balance.

The future can certainly be worse than the worst case retirement in the past. Any withdrawal rate lower than 3.25 % would be extremely conservative.
 
Lewis Clark said:
Karsten at Early Retirement Now has shown that an initial withdrawal rate of 3.25 %, adjusted for inflation each year, has survived every 60-year period starting as early as ~1871 with full capital preservation. This means the final inflation-adjusted balance has always been at least equal to the starting balance.

The future can certainly be worse than the worst case retirement in the past. Any withdrawal rate lower than 3.25 % would be extremely conservative.
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That's good to hear. Looks like we will never run out of money.
 
tulak said:
This might be overall optimistic and conservative at the same time.

Optimistic: 33k/year at 62 seems high for SS. I would give that number a 25% haircut, in addition to figuring out the real number using opensocialsecurity(.com).

Conservative: 55 years brings OP to 100. I waffle between 90-100, but in the end, the difference isn’t that big: +/- a few k per year.
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I agree with you that the OP should get their actual benefits from SSA gov. If the OP has good health and longevity, I think it is best to delay until 67 or 70 and hold the "option" to start SS from 62 to 70, but whatever OP chooses, I agree to use haircut amounts. If I were the OP I would go with whatever opensocialsecurity.com says for a claiming age for planning pruposes. It probably won't change the decision either way and is fine timing.

I agree that to age 100 is conservative but at the same time if the OP uses to she 95 or 90 that probably isn't going to change the go/no go decision either.
 
Sorry, I had a typo. Adding 55 takes OP to 110, not 100, which is overly conservative. But agree, it won’t make much of a difference.
 
Aerides said:
60k for "bills" doesn't paint a full picture of expenses though. I'd don't know our number for sure but I'd guess it's half bills and half discretionary. If I just counted "needs" as expenses, I could live on 1.5. But I like to do more than I need. Want. If that need doesn't include travel, gifts, going out on dinner dates, splurging on a new xyz every now and then, it's not a great retirement.

If that 60k is all in whatever he normally spends for the past few years (including taxes and insurance), that's difference, and it may just be how it's being communicated. Bills vs. a normal years fully loaded expenses, is not the same number.
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How do you know that "60k for "bills" doesn't paint a full picture of expenses"? It might or it might not... it seems that the OP is comfortable with that number. I agree that before pulling the plug that the OP should do more homework and make sure whatever his target spending is complete compared to his actual spending needs considering lumpy spending like periodic HVAC, roof and vehicle replacements.

That you are "half bills and half discretionary isn't particularly relevant.
 
We tracked our actual expenses for several years, estimated how spending might change in retirement (more for healthcare, less for taxes), then I ran, re-ran, and ran again the numbers.

Have you given any thought to becoming an electrical inspector or construction manager/owner's rep? Could be easier on your body while still using the skillset you already have.
 
re: expenses -- I had planned for 55k/yr. Now 17 years later it's been more than 75k+/yr. Don't forget the new roof, new ac/furnace units, the new car, the new boat, gifts to the kids etc... Those big ticket items add up. Yes, I didn't have to spend some of that money but it's fun spending it and I love my boat!
 
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I haven't seen it mentioned, but you should know that FIREcalc doesn't account for taxes. That is, in order to input the spending number, you need to to "gross up" that number for the taxes you will need to pay on the income needed to pay it. So, for example, suppose all of your money is in a regular IRA or 401k account. When you take the money out to spend it, you'll owe income taxes on it. If you want to buy stuff that costs $50,000 you will need to take out more than that so you have some to send to the state and federal taxing authorities. The calculation is x = desired amount to spend/ (1-marginal tax rate). So for $50,000 with a 12% marginal tax rate, you need to actually take out 50,000/(1-.12) = $56819. You send $6819 to the tax man and spend $50,000 on the stuff you need to live your life.
 
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Gumby said:
I haven't seen it mentioned, but you should know that FIREcalc doesn't account for taxes. That is, in order to input the spending number, you need to to "gross up" that number for the the taxes you will need to pay on the income needed to pay it. So, for example, suppose all of your money is in a regular IRA or 401k account. When you take the money out to spend it, you'll owe income taxes on it. So, for example, if you want to buy stuff that costs $50,000 you will need to take out more than that so you have some to send to the state and federal taxing authorities.
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I'm learning this first hand this year.

When using the rule of 55, I believe most if not all 401(k) providers have to mandatorily withhold 20% in taxes, even if you're only taking out $60K in income. So when I needed $60K for my 2026 income, I needed to withdraw $75K from the 401(k), and the 401(k) administrator automatically withheld $15K for taxes, leaving me with a net of $60K. I knew this going into retirement, and tried to plan accordingly.

Since $60K (net) would only put us in the 12% tax bracket, I figured I could just file early and use my Federal tax refund to cover my state income taxes... But guess what? It doesn't work that way. Since I didn't have any state taxes withheld, I now had to pay additional interest on state taxes owed...

"If you wait to pay the tax on this nonwage income with your Wisconsin income tax return instead of making estimated tax payments throughout the year, you may be charged underpayment interest. Underpayment interest is computed at the rate of 12% per year for the period of the underpayment." - WI dept. of revenue.

So this year, I got a Federal tax refund, but I had to use that refund to pay my state taxes (+ interest) on April 15th, as well as started additional quarterly payments for my 2026 income. Next year, I'll be able to have the 401(k) administrator withhold an additional 6% for state taxes, as it is now optional when I set up an annual withdrawal to have additional state taxes withheld on top of the mandatory 20% for Federal taxes.

So, yes, remember to account for taxes.
 
Ok total budget for 12 months for what I am spending currently. 74,400. I took the 12 months ran it thru Claude and stripped out all my investing deposits. This is the actual dollars spent. This include (2) new car payments and a mortgage of 2k per month.. So that is my budget moving forward. Can easily be reduced by 12k if I needed to tighten the cash outflow. Actual fixed expenditures are 62160. This was a full year of spending without thinking about a budget. 74400/.06 is 1,240,00. This capital doesn't include SS or pension of 1200 a month starting at 62. So it seems very doable. But I am taking the majority advice and might go 1 extra year so planning for 56.
 
Fishmasterdan said:
Ok total budget for 12 months for what I am spending currently. 74,400. I took the 12 months ran it thru Claude and stripped out all my investing deposits. This is the actual dollars spent. This include (2) new car payments and a mortgage of 2k per month.. So that is my budget moving forward. Can easily be reduced by 12k if I needed to tighten the cash outflow. Actual fixed expenditures are 62160. This was a full year of spending without thinking about a budget. 74400/.06 is 1,240,00. This capital doesn't include SS or pension of 1200 a month starting at 62. So it seems very doable. But I am taking the majority advice and might go 1 extra year so planning for 56.
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Haven't read every post on this thread, but make sure you're incorporating lumpy expenses.
 
Two observations:
Most here have "way more of a nest egg" because they've been retired longer. That's right! Most on this forum have much larger portfolios today than the day they retired. Your FireCalc analysis reports the same.

Also, I don't know of anyone who retired early--ready or not-- who were forced to return to work because their plan failed. Instead, your retirement tends to adjust to your income. Folks just find a way to make it work. With that said, there's always the opportunity for some easy Walmart gig to fill in the gaps.

FireCalc gives you a 95%. Try a few other calculators.
Good luck!
 
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I have been going at it with all angles with my Paid Claude subscription. Next step is to hire a planner and get things nailed down. Down market ,up market sequence of returns, cash buckets no cash buckets, tax strategies roll overs, roth conversion . Everything I can think of. This is the end result. I even fed claude my last 5 years of my bank statement in and out and told it to plan for current expenditures plus 10k a year for travel. Or course I removed any bank info like names or account numbers. Then at the end I ask what it would do.. Results are below.

1777499597738.png
 
The math is solid, especially with that pension coming in later. I stopped worrying once my spreadsheet stopped showing red in the worst-case years. Just go for it.
 
Everyone is different. I retired at 45 with no pension and 1/3 of your savings and I am very happy about it. I do have a paid off house and a paid of car with 20K miles and no debt. Other people will say you can't even think about retiring unless you are a multi-millionaire. Most of those people will die millionaires which means they worked much longer than needed.
 
Fishmasterdan said:
So using the fire calc it says 95% chance of success. My first eligibility is only 10 months away and I fell like I don't have enough. It seems like most folks on here have way more of a nest egg than what I am looking at. I do get a 1300 month pension at 62 on top of my nest egg. I guess I am scared to actually retire. How did you get your confidence to actually pull the plug?
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I retired at 52 with about that but knew I was moving to a much lower cost of living area. Plus managing my father’s finances I knew there would be a inheritance down the road. I also had lined up some passive income. Now 13 years on my NW is far more than doubled and life is good
 
mrfeh said:
Why the reliance on AI?

I'm not saying the conclusion is wrong, but I wouldn't bet my retirement on AI output.
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It's just a tool for confidence. It has no opinion nor does it try to sell me stuff I know nothing about. Now that I have a little confidence I plan to seek out a professional in the near future. I will say AI you can run scenarios you never thought of. It doesn't forget we're you put your keys if you tell it.
 
Thanks for all your wisdom. Thats what makes this place special. The old grumps, the naysayers, the just do it folks, the been there done that.. all great input and alot of wisdom to pass down. Thank you.
 
Fishmasterdan said:
Thanks for all your wisdom. Thats what makes this place special. The old grumps, the naysayers, the just do it folks, the been there done that.. all great input and alot of wisdom to pass down. Thank you.
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This is my take on this matter I retired at 58 also in the trades but with no pension with about 7/8th of your amount but I did have cash on hand to get me thru 4 years of life without touching any investments to get me to SSI and I'm now 60 and have more than I went out with and it's still growing one thing you can never get back is time so it's either you want more money and less time to enjoy it, and my body thanks me every day for getting away from the job. But I also suggest you getting an online high yield savings account and get that 4% interest that they give you monthly as that helps with the bills to
 
I agonized over a decision to retire early analyzing it over and over again. FIRECALC results were always well in my favor but it wasn't enough reassurance for me. Over time I came to a realization that without a crystal ball the financial and economic future was unknowable. I then thought what are the worst case scenarios, there were two that stood out. The first, in spite of FIRECALC and my budgeting, history of expenses etc the market goes down, unexpected expenses happen and I see my plan is failing. The solution, go back to work, maybe at less pay and benefits but going back to work would be the fix. The second worst case situation I envisioned was not retiring early and finding myself in the hospital with a life shortening/ending situation and wishing I had taken time for myself by retiring early. If this was to happen there would be no fix. My mother died of cancer at age 63 so the reality of that possibility hit home. Like the kid going off a high dive for the first time, I pinched my nose, closed my eyes and jumped. Today 17 years after leaving full time employment I have double the net worth then when I closed my office door for the last time and I have been able to live well without workplace drama and stress. Good luck to all who are just making a similar decision.
 
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