re: Retiring at 50 with $2MM in savings

You’re gonna be just fine…congrats btw thats about the exact position I want to be in as well

I recently retired from a major.

You have already won the war, so to speak, depending on your retirement spending / lifestyle plans.

Your current liquid level (and it’s potential) may have you at statistically zero risk of running out of money, even with removing significant equities market exposure. Whether or not that is your plan (aside), from experience, that is an amazing and liberating feeling. Congratulations!

Some similarity in approach here. The stay-at-home mother for children is the one that caught my eye. We did same. We view that as a pension-like balance sheet “receivable” in perpetuity. We see the value via our early adult children in numerous ways that has paid / continues to pay us back in spades. Hope same for you.

Lived solidly below means most of career, while blessed still with nice lifestyle…to say ‘sacrifices’ makes the financial freedom worth it.

Congrats and best to your family!

Thank you for the kind words. It is a very liberating feeling. Once we passed certain financial thresholds, I went from worrying about losing my job to hoping I lose my job. We always adjusted our lifestyle to accommodate our savings rate. We did not adjust our savings rate according to residual income. This is what I meant by "save till it hurts." We fully maxed out the 401k (this year it's $80,000 with employer match), fully maxed out Roths for me and my wife. We also fully maxed out our HSA and we still had residual left over to fund a money market where I keep emergency cash (approximately $210,000 right now). I often look at what we've accomplished and I find it hard to believe it myself. I watch a lot of retirement videos these days and it seems as if we have far more saved than even the most prolific savers. It's an accomplishment for which I'm very proud. I post these details to hopefully inspire others that working for others vs. working for yourself in a business you started does not preclude one from amassing a fairly healthy nest egg. It just takes discipline. What we accomplished we accomplished while also paying tithing to our church plus paying for fairly substantial medical expenses as I'm a Type 1 Diabetic and have been most of my life.

While I'm proud of our financial achievements, it pales in comparison to the pride I feel in my kids. They're self-reliant, level-headed, smart, down-to-earth and not spoiled. We had the means to spoil our kids, but our Christmas's and vacations were always modest. They now have modest expectations in this life but the smarts to achieve extravagance. For them to go to college and take on no debt while also not having me pay for books and tuition is something I'm very proud of and has paid prolific dividends thus far. Good on you for your retirement. I hope to join you once my youngest is off to college.

Hear, Hear!

No, I did not come up with it myself. I have been reading Jason Kelly's books and weekly notes for about 15 years. I have been following his plans partially for the first 5 years and completely in the last 10 years. His 9Sig growth plan has put me in a position to retire early and "live and give like no one else" (thanks, Dave Ramsey). I have more money than I ever thought I might, and I planned from an early age of having a lot. My planning, combined with his plans, put my assets on steroids.

The Kelly Letter YT Landing Page

Jason's website is by subscription and it's not cheap at $1050 a year. I've met Jason a few times and he is a very thoughtful and genuine person who got into this driven by the desire to help his mother and family get more from their limited assets. I'm not compensated for my endorsement, but he has it and my family and I are indebted to him.

While I would love to share his research, it's how he makes his living (outside of his investments). I will, however, share characteristics of the plan which is this:

* Rules based, not opinion based.
The plan uses predefined actions instead of market guesses, headlines, gut feel, or emotional reactions.

* Quarterly decision cycle.
It is not a day-trading or weekly-tinkering system. The plan is designed around quarterly review/action points.

* Income-first orientation.
The primary goal is generating usable portfolio income while still maintaining a disciplined structure around risk and rebalancing.

* Built around repeatable process, not prediction.
It does not require knowing whether the market will go up, down, or sideways next. The value is in following the process through different market conditions.

* Uses allocation discipline.
The system has defined roles for different parts of the portfolio rather than treating all holdings the same.

* Emphasizes rebalancing.
The strategy periodically forces action based on allocation targets/signals rather than letting winners, losers, fear, or greed dictate the portfolio.

* Designed to reduce decision fatigue.
You do not have to constantly ask, “What should I do now?” The answer comes from the plan.

* It can be emotionally uncomfortable but mechanically simple.
Like most systematic strategies, the hard part is not the math. The hard part is doing what the system says when the market environment feels scary or euphoric.

* It separates portfolio management from market commentary.
News may explain why something happened, but it does not drive the quarterly action.

* It is not a magic yield machine.
It still involves market risk, sequence risk, fund risk, and behavioral risk. The advantage is discipline, not immunity from losses.

* It is best suited for someone who values process over improvisation.
A person who wants constant discretion, stock picking, or macro forecasting probably will not appreciate it.

To summarize, Income Sig is a quarterly, rules-based income strategy. It uses predetermined portfolio actions rather than forecasts, emotions, or market headlines. The goal is to generate income while maintaining allocation discipline and reducing guesswork.

There is a monthly subscription option. If I were interested, I would subscribe for a month, review the User Guide (which provides the details of the plans), read current and past Letters (including the ones at the end of quarters to see what actions were taken), and check out the calculators he provides. Then you can decide if you think the price is worth admission. If your assets are small, then maybe it's not justifiable. If you're retiring and looking for income, then $1050 is a pittance compared to what you would pay someone else for AUM fees.

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I've heard that for the last decade.

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Oh, I get it.
But a broken clock is also right twice a day.
No one knows what the future holds.

Some of us are in a situation where we need not worry.
But someone electively retiring at 50, under a 5% annual withdrawal premise, is unnecessarily risk exposed. Sorry, but that is just the way it is.

If the market proceeds to produce 7-12% annually for the next 40yrs, the 50y/o retiree who immensely enjoys his first 15 retirement years, made a brilliant bet. If the markets drop 40% in year two, and take a decade to return to previous levels, it's a terribly different story. Run the numbers for his mid-long term buckets under those circumstances. It would be pretty awful.

Again, the OP is addressing the possibility of electively ceding nearly 40% of what are likely peak earning years in a career. For most folks, even wit a $2mm portfolio, retiring at 50 entails real and avoidable risk. That's my point.

Granted, there are situations where early retirement is forced thru disability, illness, family scenarios. In those virtually obligatory situations, the OP risk mitigation concepts are helpful. Likewise, in scenarios where savings vs expenses are 2x the OP portfolio-income ratio, and job fatigue is at issue, her premise of workable retirement is definitely worth a look.

I just don't see the OP relegated to those areas.

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I retired this year at 55. Stage 4 colon cancer.

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Good luck to you, sir.

Beat it, Tall Corn! All the best.

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You need 80% of your current salary to maintain your lifestyle

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This is often cited, but there have been studies refuting it. Everyone's situation is different. The only way you're really ever going to know is to make your own budget, representing your own lifestyle(s) that you want to live, and then measure against the income you expect to generate. In many cases, 80% may be more than you need.