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re: Can a person retire at 55 with 750k potfolio?
Posted on 4/26/26 at 6:24 am to Simple Solution
Posted on 4/26/26 at 6:24 am to Simple Solution
quote:
Sell the house. Move to Thailand.
Yeah, so you sell the house. Move to Thailand, then wake up with a missing kidney after a "routine" surgery.
0
Posted on 4/26/26 at 7:10 am to LSUFanHouston
quote:
I don’t think he has the asset base to generate that kind of income from dividends / cap gains
Probably. Maybe.
He has $250K in non tax accounts.
If the rest, $500K, is in a taxable account, he easily get a 7% yield and pay no tax on it.
Can the OP live on a tax free $35K. I dunno.
Posted on 4/26/26 at 10:12 am to frogtown
For being the MTB, this thread has gone on for quite awhile with a lot of “thinks” and “feelings”.
If we just start with the 4% rule as a starting place, OP is nowhere near to hitting that withdrawal rate.
If we just start with the 4% rule as a starting place, OP is nowhere near to hitting that withdrawal rate.
Posted on 4/26/26 at 12:45 pm to Ostrich
quote:
55 is too young with just that amount saved to sit and do nothing. Keep working
^listen to the man
Posted on 4/27/26 at 12:14 am to gpburdell
quote:
Rule of 55 has nothing to do with employers. it's a rule that mitigates the early withdrawal penalty from 401k plan before 59.5. So it applies to all 401k plans.
My understanding of Rule of 55:
You turn 55yo in the year you retire and applies to withdrawals only from the company’s 401k from which you are retiring (and its 401k must allow these early withdrawals). If one has multiple 401ks from previous employers, they are not included in the early withdrawal for Rule of 55. Only company from which the person retires.
Welcome counterpoints / clarification if I missed anything.
Posted on 4/27/26 at 6:53 am to Everyday Is Saturday
quote:
(and its 401k must allow these early withdrawals)
I think every 401k has to allow them the thing you have to watch out for is whether they allow "partial" withdrawals. if they dont, then you have to take all the money out in one go paying ordinary income tax at that time. If they allow partial distributions then you dont have do that and only take out what you need as you need it.
Posted on 4/27/26 at 12:15 pm to Everyday Is Saturday
quote:
You turn 55yo in the year you retire and applies to withdrawals only from the company’s 401k from which you are retiring (and its 401k must allow these early withdrawals)
The only thing the company can control is whether you can make partial distributions (i.e. multiple) or you have to take a single distribution for the balance which basically closes the account.
Either way IRS rule of 55 applies to both distribution scenarios above.
For most people rule of 55 only makes sense if the 401k plans allows the partial distributions.
Posted on 4/27/26 at 3:22 pm to Ping Pong
quote:
you can safely turn that $750K into well over a million within 5 years. Just invest in an index.
This is inaccurate and irresponsible investment advice to give someone who is 55 and looking to retire.
Posted on 4/27/26 at 3:24 pm to lynxcat
quote:
For being the MTB, this thread has gone on for quite awhile with a lot of “thinks” and “feelings”.
If we just start with the 4% rule as a starting place, OP is nowhere near to hitting that withdrawal rate.
This.
The OP seems to hate his office job more than the idea of working. I'd consider "retiring" form that job and finding a different line of work for "retirement". Something with health benefits could easily make up for lower pay in the 30-40k annual range.
Posted on 4/27/26 at 3:27 pm to lynxcat
quote:
4% rule
It is not a rule, it is a suggestion. The 4% is also becoming less fashionable, and something to be placed back in storage next to Dave Ramsey.
Posted on 4/27/26 at 7:26 pm to DarthRebel
Should be 6-7% these days not 4%.
Posted on 4/27/26 at 7:31 pm to Paul Allen
quote:
Should be 6-7% these days not 4%.
Does the percentage matter based on the age of retirement?
Logic would presume a higher percentage at an older age (fewer things can go wrong).
A lower percentage at a much younger age (a lot more risk in sequencing).
Posted on 4/27/26 at 8:08 pm to meansonny
Absolutely the age of retirement plays into the modeling. For retirement at a younger age, it’s likely closer to 3% SWR.
Posted on 4/27/26 at 8:09 pm to Paul Allen
quote:
Should be 6-7% these days not 4%.
Based on what research?
Posted on 4/27/26 at 10:35 pm to Paul Allen
quote:
Should be 6-7% these days not 4%.
This statement is profound. The compounding effect of 2-3% could run the well dry for many. Research proof to share?
Have you lived through a ‘black swan’ event? Hard to imagine 6-7% sequence of returns risk during 2008-10, when some had lost 50% of their portfolio value.
Protecting against downside risk is more important than seizing upside growth opportunity, especially at start of one’s retirement (proportional to the potential length of time of that retirement)…IMO.
Curious how this 6-7% can make sense.
Posted on 4/27/26 at 10:47 pm to Everyday Is Saturday
It has been 30 years since 4% rule became a talking point. Times are different.
4% rule is OK to follow, but it is just one of many thoughts.
https://savepointfinance.com/blog/4-percent-rule-2026-latest-research
4% rule is OK to follow, but it is just one of many thoughts.
https://savepointfinance.com/blog/4-percent-rule-2026-latest-research
quote:
Morningstar's State of Retirement Income 2025 report takes a different approach. Instead of looking backward at history, they use forward-looking projections based on current bond yields, equity valuations, and inflation expectations.
Their conclusion: new retirees in 2026 should use a 3.9% withdrawal rate. This more conservative figure reflects lower expected returns compared to historical averages
quote:
Charles Schwab's analysis supports this, suggesting 5.4% to 6% is sustainable for retirees with 20-year horizons who maintain spending flexibility.
Posted on 4/27/26 at 11:47 pm to DarthRebel
Thanks!
Listened to Bengen on Boglehead podcast just last week, coincidentally.
Makes sense. Flexing spending lower during downturn so lower than nominal 6% on avg but timing is key.
The portfolio allocation and its glide path over retirement timeline is not mentioned, just the withdrawal rate. Will have to dig in more when have more time. That is at least as critical over time.
Listened to Bengen on Boglehead podcast just last week, coincidentally.
quote:
The Flexibility Factor Both researchers agree on one thing, flexibility dramatically increases safe withdrawal rates. Morningstar found that retirees willing to reduce spending by 10% in bad market years can safely start at 5.7%. Those with even more flexibility, willing to cut up to 25% during downturns, can use withdrawal rates approaching 6%. Charles Schwab's analysis supports this, suggesting 5.4% to 6% is sustainable for retirees with 20-year horizons who maintain spending flexibility.
Makes sense. Flexing spending lower during downturn so lower than nominal 6% on avg but timing is key.
The portfolio allocation and its glide path over retirement timeline is not mentioned, just the withdrawal rate. Will have to dig in more when have more time. That is at least as critical over time.
Posted on 4/28/26 at 7:14 am to lynxcat
I knew my comment would be met with that sentiment. Sure, if you're looking at just the money side of it, $750K probably isn't much for retirement. I get it, this is the Money Talk Board. But some of us value time more than money. Yes, that is "thinks" and "feelings", but when you do a deep dive of life, I will always see time as more valuable than money. We can agree to disagree.
Posted on 4/28/26 at 7:29 am to Hawgleg
Dude, that isn’t enough money for a real life and your withdrawel needs to be 4% or less of your account value or inflation will het you. That’s a recipe for running out of money. How are you going to chase women being that broke?
Posted on 4/28/26 at 10:44 am to HeyNow
Time > Money
Can always get more money. Not time.
My view: money compounds at increasing rate while time (ambulatory life) decreases at an increasing rate. Don’t wait to enjoy time after these lines intersect.
Never thought this way in my 20s, 30s or 40s.
Retired early for this very reason. Could have traded 2 more years of life for a very juicy severance pkg. Chose the 2 years.
Why? Have had significantly more than “enough” money at the point to never work again. Time with aging parents, enjoying life, not doing work stress, politics, BS…
Hindsight: only thing I did wrong was retire early…and NOT even earlier!
Time! Don’t take it for granted.
I’m posting on a break from hiking in TX Hill country. Honestly, this feeling is incredible.
Can always get more money. Not time.
My view: money compounds at increasing rate while time (ambulatory life) decreases at an increasing rate. Don’t wait to enjoy time after these lines intersect.
Never thought this way in my 20s, 30s or 40s.
Retired early for this very reason. Could have traded 2 more years of life for a very juicy severance pkg. Chose the 2 years.
Why? Have had significantly more than “enough” money at the point to never work again. Time with aging parents, enjoying life, not doing work stress, politics, BS…
Hindsight: only thing I did wrong was retire early…and NOT even earlier!
Time! Don’t take it for granted.
I’m posting on a break from hiking in TX Hill country. Honestly, this feeling is incredible.
This post was edited on 4/28/26 at 10:48 am
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