[USER]

Will $2.5 million be enough for me to retire comfortably at 56, considering I’m debt-free?

I’m currently 56 years old, completely debt-free, and thinking seriously about retirement. I’ve managed to save $2.5 million and now I’m wondering whether this amount is sufficient to support a comfortable retirement lifestyle, potentially lasting 30 years or more.

I don’t plan on working anymore, and I’m aiming for a lifestyle that’s not extravagant but certainly not minimal either — just stable, secure, and enjoyable.

I’m based in the U.S. and my expected expenses will include health insurance, everyday living costs, some travel, and the occasional indulgence.

I’m looking for advice or insights from others who’ve retired early or are planning to. Have you retired on a similar amount?

Are there key financial risks or factors I should consider?

I’d also appreciate any thoughts on how to manage this portfolio efficiently to ensure it lasts.

Thanks in advance for sharing your experiences and opinions!

[Joe]

Yep. I retired at 51 with $2M in 2009
You should be just fine
I made some mistakes you might want to avoid however

[Tina]

Yes, if you can get 4% tax free from bonds you would earn $100,000 per year and not have to touch your principle.

[Tracy]

If you’re unsure, double it. You never know whats the future holds. Always best to have more money

[Yama]

More than enough. That’s Fatfire.
That $2.5M will grow every year and so will your withdrawal rate from 4%.

It won’t be too long until that turns into $5M.

The 4% SWR is the bare minimum. You can go 5% depending on inflation and market climate.

[Stephens]

Read “Your Money or Your Life” and determine for yourself after you crunch the numbers and determine what lifestyle or work you want.

[David]

I could travel the world living off 4% of that. Even 4% of that per year would allow me to build an organization that would change the world too.

[Liz]

have u considered taxes? do u have a roth ira where u can dividend harvest for huge monthly income?

if not work a little longer.

[Freddy]

The amount is good. But only if your health is perfect. Are you working out and eating a balanced diet.

Are you Diabetic or anything?

[Camille]

Depends on how much you plan on spending but unless you want to live a really extravagant lifestyle that should be enough to draw down about 100k per year which is more than enough for a very comfortable lifestyle

[Zac]

All I can say is America must be crazy expensive if you’re asking this!
Move to Asia and a quarter of that will be more than enough if properly managed.

Move back to USA later if you choose, after a few years of investments growing faster than you’re spending.

[James]

What will your annual expenses be? And is this liquid invested assets or your net worth?

If liquid and your expenses will be less than $100k/yr, then you *should* be fine.

[Max]

I guess that depends, is it money or does it include equity in a property?

I don’t count equity because you need somewhere to live, unless you are downsizing and can buy something else, and have some left to invest.

If it’s 2.5 cash, investment, then the rule of 4% drawn a year of 10% made on investment would give you $100K a year, and still leave 6% reinvested.

[Grell]

You’ll be fine if you can live on $138k assuming you live until age 90 with a 4% real return.

I definitely couldn’t do that but many, if not most, people could.

[Matthew]

All depends on your annual expenses! 2.5M at the 4% rule is 100k – totally feasible for many to live off that, so simply depends on your own expenses

[Troy]

If your health coverage is paid via a pension or military retirement you are good. Social security can kick in at 62.

Average life expectancy for males is 74.

[Aria]

No, if your investments aren’t liquid, e.g. tied in RE
No, if your investments are locked in retirement accounts
No, if your portfolio is overly risky or overly conservative
No, if your annual spending exceeds $80k

Possibly, otherwise. But the fact that you haven’t done enough research to build a financial model of your projected portfolio growth and future spending to answer this for yourself is another signal that it may be too early.

Do your homework, the answer will come as part of it.

[Helen]

Depending on your anticipated outflow needs for possibly the next 54+ years, inflation adjusted, including taxes, healthcare, living expenses, not to mention discretionaries like clothing/hair, eating out, travel, etc.

[Perry]

Depends on the unknowns that happen and your lifestyle. Been there, done that.

More important is the transition from work to not while maintaining a purpose for living.

Not easily done.

[Author]

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