Ask an Advisor: I’m 47 With $1.87 Million But I'm 'Burned Out' From My Stressful Career. Can I Retire Early at 51?

Help me! I read the column frequently—huge fan! I’m 47, married, and severely burned out after 25+ years in a fast-paced and stressful field. We have $750,000 in a personal brokerage account (I contribute $30,000 annually), $760,000 in a rollover IRA, $210,000 in a Roth 401(k) (plus a $13,000 company match), $150,000 in crypto, $20,000 in an HSA and two rental houses (about $230,000 in equity, plus $600/month in rent proceeds).

We have about $850,000 in equity in our primary residence and plan to sell in around three years and then buy something all cash somewhere warm. We have money set aside for our kids’ college. Other than the primary residence, we have no debt. Can I quit/retire at 51? – Scott

Hi Scott, thanks for reading! You’ve provided a pretty clear picture of your resources, and I think most people with your assets and income sources would be able to comfortably retire at 51. But retirement is a highly specific undertaking. We really need to consider how your assets and income stack up against your individual needs before we can say whether or not you can retire. I’ll walk you through how I see things and hopefully leave you with a better feeling of how to do that.

Not sure when you can retire? A financial advisor can help you build a plan and stress-test it. Connect with an advisor for free.

Setting the Stage

For a simple illustration, imagine you walk up to me and show me that you can bend down, stretch and maybe even do a vertical jump. That gives me some feel for your physical fitness, right? But then you point to something out of my view and ask, “Can I pick that up?” Pick up what: a coffee mug, a suitcase, a bag of concrete?

With all of the information about your assets but none about your lifestyle spending needs, that’s analogous to the situation we have here. You’ve given me a clear picture of your assets, but we don’t yet have your lifestyle spending needs. What we can do, though, is get you in the ballpark of what I think you’d be capable of supporting. I think this will give you a good idea of where you stand based on your own understanding of your spending needs.

Everything that follows from here can, and should, be tweaked depending on your preferences and details we don’t have. However, I think this will get you close enough to make a reasonable estimate of how prepared you are to stop working.

(And if you need additional help planning for retirement, consider working with a financial advisor.)

Assessing Your Assets

A man rubs his eyes while analyzing reports at his desk.

Let’s start by assessing your investment balance and translating that into withdrawals. Right now you have about $1.87 million, excluding the HSA. As a default starting assumption, I’d treat the HSA being earmarked for unplanned medical expenses and exclude it from the regular distributions.

You are saving about $67,500 per year. Let’s say you do that for four more years for a total of $270,000. Ignoring investment performance, that would put you at $2.14 million when you turn 51.

Now let’s turn that into cash flow. At this stage I like to think in terms of withdrawal rates, and I start with the 4% rule. I’m not saying you should follow this method, but I do think it’s a good way to get an initial rough estimate. So with a $2.14 million balance you’d be looking at an $85,600 annual withdrawal.

(If you need help converting your assets into a stream of retirement income, speak with a financial advisor and see how they can guide you through the process.)

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Accounting for Social Security

Although you’ll still be many years away from claiming Social Security benefits, you still need to factor it in. An important note about your benefits is that your statement estimate won’t be very accurate. That’s not because they are “wrong,” but because they are built on assumptions that won’t apply to you. If you look at the explanation on your statement you’ll notice that it says they assume you’ll continue earning the same amount you have been up until the given age. So, your benefit at age 67 assumes you’ll continue earning your last reported amount until you reach age 67.

This is important to understand. Your actual benefit is likely to be meaningfully lower than the estimates shown on your statement. A major reason for that is your benefit being based on your highest 35 years of earnings history. If you retire at 51, you’re likely to have quite a few zeros on your earning record, and certainly some years in which you had much lower earnings than what you’re making now. Because the statement estimate assumes you keep working and earning what you earn now until your estimated filing age, it likely overstates your benefit.

To bridge the gap between retirement and beginning Social Security benefits, you may want to explore some type of fixed, guaranteed income source.

For example, let’s say you retire at 51 and plan to claim Social Security at 67. That’s 16 years. You might consider a period certain annuity or bond ladder that would provide an income stream equal to your future Social Security benefit. That does two things:

Provide some protection from sequence risk, which you’ll have considerable exposure to if you retire that young.
Smooth out your distributions, making it easier to plan around.

If you do this, don’t forget to subtract the amount you use from the investment balance above before calculating your withdrawal estimate. (And if you need additional help exploring guaranteed sources of income, speak with a financial advisor.)

Examining Your Expenses

Estimating retirement expenses is a critical piece of the puzzle. In the illustration I gave, this lets us know how big and heavy the object you’d like to lift is. You may already know what your expected expenses will be, but let’s review what you need to include just to be sure.

Regular budget items like food, utilities, and general lifestyle spending
Healthcare, which tends to increase the older you get. Since you’ll be so young, give special attention to how you’ll acquire and pay for health insurance before you become eligible for Medicare.
Long-term care, which is sometimes lumped in with healthcare, is unique and needs to be considered separately.
Estate planning goals, such as whether you want to leave anything to heirs
Taxes, including federal, state and local taxes

It’s common for expenses to change over time in retirement. Considering your young age, I’d say it’s even more likely for you. People tend to spend more in the early years when they are still active, with activity and spending gradually slowing with age. Expenses often start to pick back up again in later years as health-related expenses increase.

(A financial advisor can help you account for both planned and unexpected expenses in your retirement plan.)

Depending on your personal health you’re probably looking at a still very active period for the next 15–20 years. The fact that you have your kids’ college expenses taken care of, won’t have a house payment, and have no debt is a huge bonus.

Putting it All Together

"Early retirement" written in a notebook.

Let’s suppose that you estimate your monthly expenses will be $5,000 per month, or $60,000 per year. Based on what we’ve said above, your withdrawals alone would likely cover that, even without considering Social Security or the rental income. If you expect to need $12,000 per month, on the other hand, you might be starting to stretch your assets. But even that is doable, you just need to be more deliberate about your long-term withdrawal plan.

I don’t want to put too fine a point on it, because there is just so much that influences this beyond what we know and can adequately discuss in a single article. (For a more in-depth examination of your retirement plan, connect with a financial advisor.)

If we assume your spending needs are similar to the average person, then you are almost certainly capable of retiring at 51 with your assets. But that average is made up of a very diverse set of households. What matters is whether you can support your spending needs in a way that is comfortable for you.

Retirement Planning Tips

Retirement success is driven by whether your assets can reliably support spending, not by the size of your portfolio alone. Mapping expected expenses against guaranteed and variable income sources helps reveal pressure points that net worth figures often obscure.
Retirement planning involves investments, taxes, income timing, insurance and estate considerations that interact in complex ways. A financial advisor can help integrate these pieces into a coherent strategy. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Brandon Renfro, CFP®, is a SmartAsset financial planning columnist and answers reader questions on personal finance and tax topics. Got a question you’d like answered? Email AskAnAdvisor@smartasset.com and your question may be answered in a future column.

Please note that Brandon is not an employee of SmartAsset and is not a participant in SmartAsset AMP. He has been compensated for this article. Some reader-submitted questions are edited for clarity or brevity.