How much to retire/step back?

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Let’s say at 50… - no mortgage, car payments, or debt - basic utility/monthly bills - live comfortably on $50-$60k a year Is that a good time to step back if you have $1.5 million in investments (401k, mutual funds, stocks)? Maybe get a random job doing something enjoyable that still brings in some level of income? With an average 10% interest return a year on investments could it work?

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I’m a little confused by your framing. You say that you have $1,500,000 in investments. You say that you can live comfortably on $60,000/yr. 5% annual return on $1,500,000 is $75,000. Does this not answer your question, or am I missing something?

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5% annual return on $1,500,000 is $75,000. Does this not answer your question, or am I missing something?

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5% is a pretty risky assumption for a withdrawal rate. Especially at just 50 where you’d need to plan for 40+ years of retirement.

I’d think you’d need at absolute minimum $2M. Probably $2.5M+ especially considering health insurance costs..

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Let’s say at 50… - no mortgage, car payments, or debt - basic utility/monthly bills - live comfortably on $50-$60k a year

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So it’ll take 100-120k a year to live comfortably in 20 years, maybe more..

Some people could do it on a third of that, some people would be so bored they'd blow all their money on entertainment.

Figure out how much you'll get from Social Security. If you think it won't be there, remember the trust is anticipated to cover 70% or so of benefits if the Gov does nothing.

Then you need enough assets to cover your expenses for the years until you can get SS. After you get SS, you will need less money, unless you spend a lot more in retirement.

Me personally, I don't work any more. I am 57. I lost my job in 2021 and decided I didn't want another one. I realized that I was already living on less than half my paycheck because of FICA, 401K, HSA, Roth, health insurance, etc, then savings on top of that, so I really don't need all that much money to live comfortably. That has the added benefit that it keeps me in the lower tax brackets.

Most of your costs go down after you quit working, but you will need twice the beer money.

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5% is a pretty risky assumption for a withdrawal rate. Especially at just 50 where you’d need to plan for 40+ years of retirement. I’d think you’d need at absolute minimum $2M. Probably $2.5M+ especially considering health insurance costs..

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In a vacuum, maybe. But the context of the question is whether he can “step back”, including the possibility of:

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Maybe get a random job doing something enjoyable that still brings in some level of income?

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As long as OP knows themselves well enough to know they aren’t going to want to run off and buy a boat, etc, I see no reason he can’t semi-retire into something more pleasant and conservatively live on that plus dividends as needed without needing to touch the corpus of the investments for a very, very long time, if ever.

Does the $60k include taxes, healthcare etc? If so then that would be a 4% withdrawal rate. This could be doable. This graph shows you have a 99% chance for a 30 year retirement with 75/25 stock-bond portfolio. Your actual investment performance will ultimately decide how long it will last. If you go down to $50k/year, that shows 100% success even for 40 years and 99% for 50 years. The key is to be flexible in bad years.

This graphs comes from here which has more info and details on how they came up with this:
https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/

If you can guarantee 10% annual returns, you will easily make money in retirement, but I question that #.

Get a couple houses. Cash flow without having to dip into the balance will be big. I'll transition to a property manager down the road so it's not as much work.

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I forgot about healthcare and taxes.

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Does the Mrs handle the bills?

Taxes and Healthcare are often the first bills looked at for early retirement.

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I forgot about healthcare and taxes. Plus the lump sum property tax in Texas is quite a chunk. Guess I’ll be running the miserable rat race until 60.

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Tac, It could be done but too risky for me with the assets you have. I retired at 54 three years ago with considerably more in the bank. I had a HS senior and sophomore but college funds taken care of in their 529's. I assume about 6% return but have enough to cover expenses for 40+ years.

Taxes and healthcare can be managed some what. My ACA plan is very reasonable with premium subsidies by keeping my income low. I try to stay in the 22% bracket by converting my IRA to Roth and living off cash and qualified dividends.