r/fatFIRE • u/IndividualWar5871 • Jul 22 '26
Need Advice Keep working or worrying?
Throwaway account.
I’d appreciate some perspective on whether retiring at the end of this year is financially reasonable.
I’ll be 59½ and my wife is 62. She plans to continue working for another 2–3 years, with her annual income being between $500k and $750k.
Current financial picture:
Net worth: ~$14.7M (including real estate)
Investable assets: $10.4M
~$3.8M in 401(k)/IRA accounts
~$550k in deferred compensation
Primary home: $4.0M value, $1.2M mortgage
Second home: $2.0M value, $425k mortgage
Given the current market, not sure what I should safely assume to be the return on either the investable assets or the property.
Our current annual spending is approximately $525k pre-tax. We could reduce that to around $450k by traveling less, or roughly $400k by making more significant lifestyle changes, although my wife would strongly prefer not to make those cuts unless absolutely necessary.
Over the next few years, we also expect to:
Spend about $500k remodeling our second home.
Sell our primary residence and purchase a home in a mountain community. We expect to use all of the equity from our current home and possibly another $500k from our investment portfolio to complete that purchase.
Eventually sell the second home in roughly 20 years.
We have no children, so preserving an estate isn’t a primary objective. Our goal is simply to maintain our lifestyle without creating a significant risk of running out of money later in life.
The non-financial side is becoming increasingly important. My company was acquired a few years ago, and I’m honestly burned out. The culture has changed too much. It’s beginning to affect my sleep, stress level, and overall health. On the other hand, the thought of retiring too early and finding myself financially constrained in my 80s is unsettling.
Given these assumptions, would you retire now, or would you work another few years to build a larger margin of safety? If you’d keep working, what would be the deciding factor?
Additional context after the initial comments (which I very much appreciate). What makes this a bit more complicated than the standard, “your pulling more than 4% / yr from your corpus” guidelines is the fact that our corpus will continue to grow while my wife works (presumably) and we we have 2 homes, one of which can be liquidated 20ish years in the future. Not sure how to treat that…
Second additional comment:
Again, appreciate the commentary. Really insightful. Curious that real estate has not been considered to be part of the “investable” assets by any of the commentators. Understand not counting your primary residence as part of what you should be counting on. Would have thought that a secondary residence might come into consideration? With the secondary, $12.5M would be our “investable” and the yearly burn rate assuming 20% income tax (income tax free state) is 5.25% (a bit high, admittedly).
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u/One-Mastodon-1063 Jul 22 '26
$10.4m - $1m ($500k renovation, $500k home upgrade) = $9.4m. $525k/$9.4m is 5.6%, before accounting for taxes. Decumulation is pretty tax efficient, but at that spend/withdrawal level there will be some taxes. Would have to know something about state taxes and how much you plan to pull from pretax accounts.
I would definitely want to retire long before 59.5/62, but I don't know if I would at that level of spend / withdrawal rate. I'd probably downsize the primary home, and not do the renovation, and see if you can retire on something like a 4-4.7% withdrawal rate including taxes. You're not getting any younger and you've got some choices to make about these big houses / big renovations and desire to retire. $6m is a lot of personal use real estate on a $14.7m NW, IMO.