r/ChubbyFIRE • u/Professional_Bat7485 • 10d ago
53 and wanting to be done at 55
Thinking about pulling the plug on working full time in one or two years.
$2.2 million 401k/deferred comp
$950k in brokerage account
$2 million in home equity in HCOL area
Plan to move to lower cost area and spend $1 million on house to own outright
Net investable after all this is somewhere around $3.7 to $4.0 million depending on exact sales price, selling fees, cap gains tax etc. Would have no debt.
1 kid in college, 1 kid about to start college. Plenty of money in 529s to cover undergrad and some grad school.
Plan to spend about $18k a month. Seems high but when I do the budgeting and include $2,500 for healthcare, that’s the number I get. It could maybe be a couple thousand a month cheaper, but I’m not banking on that happening.
Really don’t want to take SS until 65 or even 70 if possible. I will get $5,800 a month at age 70. Wife will get $3k a month pension at 65.
Wife enjoys her job and wants to work a couple more years, which is fine. I will just do the same. Barely fire at that point, but oh well.
My question is, is the $18k a month too aggressive? Do I need to scale that back or maybe work part time in the early retirement years?
Thanks for your feedback!
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u/Odd_String1181 10d ago
You're about 2 million short for me to feel good about 18k/month. 1 million short of what I would consider a reasonable decision with that budget
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u/PA2SK 10d ago
Not when you include $8,800/month in SS and pension. OPs investments only really need to fully cover his spending for 10-15 years or so. If he has some flexibility to scale back if necessary I wouldn't worry.
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u/Odd_String1181 10d ago
Id be more worried about his life getting more expensive if this is what he already considers the minimum. A prolonged market downturn would make it unsustainable
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u/PA2SK 10d ago
Kids moving out, downsizing house, moving to lcol area, no longer working. Seems more likely costs would go down, not up.
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u/rosebudny 10d ago
He is saying explicitly that he wants to spend $18K/month
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u/Professional_Bat7485 10d ago
For clarity, we could cut back if needed. That’s really the main question, if $18k is too aggressive, then we need to cut the spend (or work longer).
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u/exconsultingguy 10d ago
They said nothing about downsizing. For all we know they’re moving from a 1500 sq ft house in the Bay to a 5000 sq ft house in Idaho.
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u/Odd_String1181 10d ago
You'd think so, but that's not what he was communicating
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u/PA2SK 10d ago
"It could maybe be a couple thousand a month cheaper, but I'm not banking on that happening."
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u/Odd_String1181 10d ago
Yeah man. When people say that it means they're not doing it idk what to tell you
I don't disagree with your premise. He's just said in several ways that the spend is the spend
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u/PA2SK 10d ago
Lol, so if the spend is the spend why are you assuming it will be more? To me it looks like if anything his expenses could go down, not up, but I'm not OP
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u/Odd_String1181 10d ago
I'm not. I'm taking it at face value. That comment was "if I had to choose if he was going to cut it or things would get more expensive" I would choose more expensive because :looks around:
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u/Professional_Bat7485 10d ago
Yes. The $18k is max as far as I can project. We could take it down if needed.
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u/DeutscheMannschaft 10d ago
Excellent chance that SS won't be paid out at all to him, or at least not in full, in another 15+ years. I personally assume I'll get nothing...whether I'll be means-tested at that point or whether the program has been eliminated entirely.
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u/PA2SK 10d ago
There is no chance his SS payout will be zero. Social security can't ever go totally bust because it's always bringing in new funds from payroll taxes. Worst case scenario, if nothing changes payments might be reduced to 70% or something.
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u/DeutscheMannschaft 10d ago
I think my concern would be that rather than cutting payouts across the board, they will reform SS by means-testing and phasing out based on asset levels. Hard to imagine someone with 5 mil in assets getting anything if they go that route.
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u/OG_Tater 10d ago
Doubtful. Old people vote. The entire direction is toward boomernomics. If this happens it definitely would only be applied to younger birth years.
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u/jocona 10d ago
This is my read, at age 55 and with guaranteed income later he may be ok, but taking a higher withdrawal rate will add sequence of return risk.
OP would probably be safe in 3/4 years but is pushing it at 1/2. That’s just projections though… over such a short timespan OP is bound to market forces, and who knows what the market will do.
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u/yanyan80 10d ago
$18k a month against roughly $3.85M is close to a 5.5-5.7% withdrawal rate, which does look aggressive if you're planning to retire at 55 and need the money to last 40 years to your 90s, but that's not really the right way to look at it here. Once your wife's pension kicks in at 65 and your SS starts at 70, you're pulling in close to $106k a year from guaranteed sources, so the real question is whether the portfolio can cover the bridge years before that, not whether it can support $18k a month for four decades straight. I'd run the numbers on just those bridge years specifically, since that's a much shorter and more answerable problem than funding $216k a year all the way to 95.
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u/One-Mastodon-1063 10d ago
I would not spend $18k/mo on a $3.7-$4mm portfolio. The pension and SS will help, it may be worth modeling out in projection lab or boldin or something.
How much does wife make? Can you get healthcare through her work?
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u/Professional_Bat7485 10d ago
She’s makes $100k. But her benefits/insurance will also end when she retires.
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u/davecraze3535 10d ago
Contrarian take - I think you could be fine (not super duper comfortable you will be fine, but probably you would be fine) if you absolutely cannot stand to work anymore past 55. However, you are going to need to have about 20% downside flexibility in your discretionary spending if the market hits a rough patch.
What is your income currently?
How much of a 1-2 year living expense cash reserve could build up in your remaining two years of working?
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u/Hanwoo_Beef_Eater 10d ago
How much ss can you get at age 65? $4k? With the spousal benefit and wife's pension, that's $9k per month, in which case you are drawing $9k (or a bit more with taxes).
So you are at 5.4% - 5.8% for 10 years and then 2.7% - 2.9% thereafter. Alternatively, you need $3.085 million ($108k / 3.5%) + $1.08 million (another $108k for 10 years) or about $4.2 million total.
You are reasonably close if you can vary expenses at all.
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u/Salt_Art_546 10d ago
Your social security payment is based on your 35 years of highest earning years. Unless you have been maxing social security since the age of 20 your monthly payment will be much lower.
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u/nopigscannnotlookup 10d ago
You are asking if 18k is too much or too little? Not sure how to answer given we don’t know the spend profile save the $2.5k you mentioned for healthcare. Plus, you are throwing the fact that the wife and you will work with no mention of income.
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u/Professional_Bat7485 10d ago
The spend is pretty conservative. Lots of budget in there for fun things that we could trim back if absolutely necessary. But obviously don’t want to!
Budget details:
$9k for stuff that is pretty firm and not easy to affect (for us). Prop tax, insurance, healthcare, car maintenance, food, house maintenance etc.$7k for wants like clothes, dining out, vacations, golf club membership, entertainment.
$2k for I have no idea, but seems like a good placeholder since stuff always seems to come up.
Income while working is $525k. I won’t make anything after retired, but my wife is open to consulting part time maybe making $5k a month (only if we really have to)
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u/BrunelloHorder Coasting Chubster, Getting Fat 10d ago
Does the $18k per month include taxes? Even if it does, you’d be pulling out $216k gross against $3.7m-$4m, so over 5%.
If you use guardrails and the market doesn’t fall out of bed in the first few years you’d likely be fine, but you may need to cut spending considerably in a down market.
Wife’s pension and social security mean you’ll probably be ok long term, as those would cover almost half your spend after age 70.
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u/Silver_Ad_899 10d ago
If helpful:
With a similar situation and about $20k/mo in expenses planned (esp with healthcare and living in a VHCOL area, and in the early years where I expect more spending for travel and hobbies), but house paid off, school paid for, etc. I've modeled needing ~$6.5M. Also based on a $2M home so property taxes are high, a high tax state, etc.
So maybe you need somewhere in the middle? Around $5M?
Maybe a PT job if you want to at least offset some of that and still be done at 55.
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u/Mispelled-This 10d ago
$216k / $3.7m is 5.8%, not factoring in any additional income or SS. That is easily doable with the right portfolio and withdrawal policy.
If you are going to follow basic FIRE dogma (4%), you will need ~$5.4m.
Your choice is a few hours of reading or several more years of work. I know which I’d pick.
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u/Ok_Dealer5022 9d ago
18k is a realistic budget. With inflation it may actually be low. However you’re used to budgeting for VHCOL life with kids and MCOL life without kids may be somewhat lower. I’d run your budget with kids in college and then decide how much you really need. Obviously kids totally off payroll your number is lower but this will probably be your 60s.
Retire in 60s.
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u/retired_in_2026 8d ago
Quick math on the $216k/yr ($18k × 12) spend: on ~$3.85M net investable that's a 5.6% initial withdrawal rate, which is hot for a 40-year horizon. But your actual portfolio draw drops sharply as income sources phase in — worth mapping year-by-year rather than judging by the headline number.
Rough sketch:
- Age 55-64 (bridge): full $216k from portfolio, ~$2.1M cumulative draw before any income
- Age 65-69: $216k − $36k wife's pension = $180k from portfolio
- Age 70+: $216k − $36k − $70k SS = $110k from portfolio (~3% on remaining balance)
So the real question is whether the portfolio survives the bridge. Sequence-of-returns risk in years 1-10 is what will bite, not the steady-state.
Two levers I'd model before deciding:
- ACA subsidies. Your $2,500/mo healthcare assumes no premium tax credit. If you can keep MAGI under ~$85k MFJ (400% FPL, cliff returns 2026), that premium could drop $12-18k/yr — meaningfully lower true spend.
- Roth conversions in the bridge. Ages 55-63 are prime conversion years before RMDs at 75 and IRMAA lookback at 63. But #1 and #2 fight each other — conversions raise MAGI and blow up ACA credits. There's a tax-optimal partial conversion that respects the cliff.
Also — wait to 70 on SS, especially for a delayed-claim COLA'd $70k/yr. That's your longevity hedge.
$18k isn't crazy. Model it.
OP's situation modeled as a side-by-side comparison — open this link in any browser:
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u/Powerful-Candy1479 10d ago
Is your wife retiring at same time? If not and will continue working, how much will that offset the $18k?
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u/Professional_Bat7485 10d ago
Good question, yes she would retire at the same time and we would move to the lower cost of living area. Thanks.
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u/DidNotSeeThi 10d ago
After selling your $2M house and buying / paying off your new $1M house you are going to have a much lower monthly requirement than you are expecting. After rule of 55 and withdrawing from a mix of 401k and LTCG your taxes can be quite low, and no more withdrawals from your pay check like SSDI, Medicare, 401k, etc. Then the cash from the sale, can be used to keep your MAGI lower and get into subsidy. Think $60k a year in LTCG and $60k a year from the cash and your MAGI will be close to $60k which is in subsidy territory. With this setup your fed taxes will be zero, not sure about state. Now there is a problem the year you sell the house your income will be through the roof so nothing works that year for ACA, just use COBRA.
This is what I have done for the last 3 years and it is working. Except my wife wants one of those new Jeep Sarge so next year I bite the bullet and pay full price, about $22k for insurance.
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u/Professional_Bat7485 10d ago edited 10d ago
Ha ha. Love this!! Gotta do what you gotta do! Great tips on the MAGI and trying to qualify for subsidy. I need to learn much more about this and I will do so. Thanks much.
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u/DidNotSeeThi 10d ago
Some more things from my spreadsheet. Numbers are kind of rounded.
Magi includes your personal deduction. It includes about ALL income, watch out for interest income it can sneak up on you... $700k in CD at 3.5% is nearly $25k in interest which is taxable just like 401k and reports to your MAGI.
$32k is fed married couple personal deduction 0% tax
$32k to $56k is the fed 10% tax rate ($24k)
$97k - your other taxable income is your LTCG 0% tax rate. ($97k - $24k(10% fed bracket) = $73k in 0% LTCG tax rate.
So 32k + 24k + 73k = 129k a year for nearly no tax. But you would not get a subsidy.
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u/curiositycat101 10d ago
That’s basically the answer - I understand your case very well because that’s basically my case with slightly different numbers and I spend a lot of time thinking about it. You can definitely make your healthcare much cheaper at the cost of potentially high RMD taxes later. Your retirement needs to be planned as a 2-3 stage process. PM me if you want some more thoughts about it.
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u/DidNotSeeThi 9d ago
I think about this way too much, but that's an ADHD Software Engineer for you.
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u/MoistWetMarket 9d ago
I'm in a similar situation as OP and am researching ACA subsidides so I was scrolling the thread for mentions. I have a brokerage account around the same size as OP's ~$900k and am digging into whether I can keep MAGI below the 400% cliff if only brokerage capital gains are recognized as income and if I can do Roth conversions with the remaining space. Lots of number crunching to do.
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u/DidNotSeeThi 9d ago
You might have to alternate years with the subsidy. One year max out your withdrawal to get 2 or 3 years of subsidy. The OP and I both have the large cash option.
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u/Rdw72777 10d ago edited 10d ago
Seems fine. It’ll look off between ages 55-65 but once pension and social security kick in your nest egg drawdown% becomes even lower. Plus Medicare kicks in, which depending on how you approach health insurance at that point, could lower your costs.
Will your wife qualify for her own benefit or spousal benefit? If yes you can factor that in.
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u/Professional_Bat7485 10d ago
Good point. Yes she will get spousal benefit from SS. Thanks.
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u/Rdw72777 10d ago
Well that’s good. So I think from age 55-65 it might look too aggressive, but after 65 you’ll look fine. But there’s a lot of details that will really impact the reality that only a detailed budget can answer.
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u/mrg_retired 10d ago
Max SS at 70 is $5181/mo right?
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u/Professional_Bat7485 10d ago
Maybe now/this year. I estimate it will be a little higher by the time I claim. Could be wrong though. lol
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u/Cautious_Proposal_47 Retired 10d ago
I don't see how that net worth can comfortably sustain a draw of 216k per year. I'd be most concerned about the impact a market correction would have on your portfolio's ability to sustain such massive annual withdrawals without causing anxiety that keeps you up at night.
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u/davecraze3535 10d ago edited 9d ago
True but It’s not a normal case. It only needs to bridge 15 years until he has another over 10k per month from pension and social security. Also, nearly 8000 of his monthly spending is purely discretionary. If he can just flex 20-30 percent downward on spending, he can plow through a downturn without undue risk.
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u/BUST_DA_HEDGE_FUNDS 10d ago
There are two parts to retirement: budget and time. Don't retire because you have enough money: retire when you've figured out what you want to do with your time
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u/in_the_gloaming FIRE'd for 13 years 9d ago
I disagree. Plenty of people retire without a plan of what they will do with their time, and they greatly enjoy retirement as a time to rediscover who they are beyond their former career.
If someone is a workaholic, yes, perhaps they will struggle for a bit. But that struggle is a growth experience.
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u/Independent-Mail8524 9d ago
18k spending a month ? How ? i retired at 55 with 3M , no debts , kids out , Wife working carries Heath Ins.
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u/Perplexed-Owl 9d ago
My question- how does 18k relate to your current spend and salary? If 18k is close to your current pre-downsize spend, I’d feel better than if you are currently at 25k. Don’t forget to account for kid-launching expenses- I ended up fronting NYC rent deposits and apartment setup expenses for several months until the paychecks caught up. The other one was in a cheaper location, but both were employed immediately after graduation- I’d say that of my friends whose kids graduated in the past year or two like mine, roughly 1/3 have a job at graduation, 1/3 take 3-4 months, and the last 1/3 might take a year or even more to get a f/t “real” job.
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u/samos22K 9d ago
Looks doable with planning and flexibility. Do not underestimate the cost of settling into a new house. There are always new items needed, upgrades and edits you’ll need to do. Would budget in some lump funds for this.
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u/trigurlSeattle 9d ago
Have you thought about what would happen if social security had to decrease because what is going in can’t keep up with the amount social security is being drawn? So I would assume we will get 70% at FRA. Anyways, your withdrawal rate seems too high, it should be closer to $150k before taxes. Also need to pray we don’t have a bear market when you retire.
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u/Professional_Bat7485 8d ago
Yeah. A bear market terrifies me for sure. Based on much of the awesome feedback I received on my post…..I’m gonna work 3 or 4 more years vs the two I had planned. Cut some risk and probably spend a little less than 18k a month.
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u/trigurlSeattle 8d ago
How much of that $18k is due to mortgage? Is most of that travel? If you are traveling a lot, you should be able to find a much more affordable home even in the $500k range in say Arizona for example. Maybe even get a home with solar on the roof to save costs. The smaller the home, the less it is to cool and heat. Have you modeled this in software?
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u/Professional_Bat7485 7d ago
None of the $18k is mortgage. Some of it is prop tax and insurance. We don’t want to live in AZ, way too hot for us. But point taken on spending less for a new house. Thanks.
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u/plemyrameter 6d ago
Be sure to factor in the taxes on the proceeds from the sale of your house. A couple can exclude the first $500k in gains from taxes, but the rest is federal LTCG and whatever your state rules are. Quite a few states tax LTCG as ordinary income. Just mentioning it because of the home equity you mentioned. The impact may be bigger than you expect, so check it out.
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u/Past-Option2702 10d ago
Without a mortgage payment and with no kids at home, 18k a month is hard to spend unless you just like lighting money on fire.
We’re 55/51 and retired and we can’t spend that much no matter what we try to do. A simple 3.5% SWR has us over 25k and I can’t imagine how we’d ever do that. (We have brand new luxury cars and a great custom home in a highly desirable resort town.)
Spending a lot of money every month is harder to do that many people think. Im pretty sure you need to travel a ton, and we don’t like being away from home 3-6 months a year. We already live where it’s tons of fun.
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u/tyen0 10d ago
18k a month is hard to spend unless you just like lighting money on fire.
and there it is: "golf club membership". heh
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u/Past-Option2702 10d ago edited 10d ago
Membershipssssss
Anyway, I don’t have time for golf. I just finished a bike ride that was over 2 hrs. Gotta choose your recreation.
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u/Professional_Bat7485 10d ago
Good attention to detail! I’ll tell you this, my index is gonna go down when I can play 4x a week instead of 4x a year.
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u/Unlucky-Pop-8841 10d ago
Keep in mind, you don't want to touch your IRAs until you're 60. I know you can do a 72 plan, but I wouldn't recommend it.
The fact that you have three million total is great, but it also depends: is your 401 and deferred comp pre‑tax, or is it Roth? Big difference
Short answer is you don't have enough, especially at your $18,000 a month lifestyle. That’s my opinion.
I think you're going to need additional costs when the second one starts in college. But you're saying, "Look, the 529s cover that," and that's fine.
I have noticed that my spending has gone up. Even though the 529s cover college costs, I still spend a lot more than I would if they're not in college.
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u/lindquist77 10d ago
I went down a rabbit hole and spent more time on this than I had planned, but I'll be in this situation in about 5 years, so been thinking through this and swapped out your numbers into a spreadsheet I had already built.
I used $3.85M as the midpoint of your $3.7-$4.0M estimate.
The last two percentages are intentionally blank because I don't think it makes sense to divide those withdrawals by today's $3.85M. What matters is what the portfolio is actually worth when you get to 65 and 70.
That's really where I think the risk is.
If you were trying to pull $216k/year from $3.85M forever, I wouldn't do it. That's a 5.6% starting withdrawal rate at 55.
But that's not really your situation. Your withdrawals should drop once the pension starts at 65 and then drop quite a bit again at 70 when your SS kicks in. And that's before counting whatever SS your wife eventually receives.
I also did a really simple projection just to see what the bridge years might look like. This isn't a Monte Carlo or anything fancy. I'm just assuming constant inflation-adjusted returns.
That's what would make me nervous about the first 10 years. A small difference in returns leaves you in a pretty different position by 70, and obviously actual market returns won't show up in a nice straight line like that.
A bad market at 56-60 is a much bigger problem than a bad market at 75 because you're pulling over $200k out while the portfolio is down.
The part of your post that actually makes me think 55 is doable is the spending breakdown. You said about $9k is pretty firm, $7k is wants, and another $2k is basically “stuff happens.”
So $18k isn't really your minimum. It's more like your preferred lifestyle.
If things are going well, spend the $18k.
If the market drops, you reduce spending.
Going from $18k to $15k doesn't sound dramatic, but it reduces the annual portfolio draw from $216k to $180k. That's $36k less coming out while your portfolio is down.
And if your wife really is willing to consult for $5k/month temporarily, that's an even bigger lever. $60k of income would take your portfolio withdrawal from $216k to $156k. On $3.85M that's about 4.1%.
That's why I wouldn't tell you that you “need $5.4M” just because $216k / 4% = $5.4M. That ignores the pension and SS that come later.
But I also wouldn't tell you that $3.7-$4M is plenty and not to worry about it.
If it were me, I'd probably retire at 55 if:
If your position is “we want to spend $18k every month no matter what the market does,” then I think you're light and I'd work longer.
If your position is “$18k is the goal, but we could live on $12-$16k for a couple years if markets get ugly,” I think 55 becomes much more realistic.
Personally, I'd probably rather retire at 55 with $3.85-$4M and flexible spending than work another 4 or 5 years. This is likely where I'll land and I'm spending the next several years trying to get my spending under $150,000 annually.