Hit $10 million net worth in my 50s — is it finally time to retire and focus on family and health?

Unsurprisingly, everyone has a number in mind that they believe they need to hit to retire comfortably. While we all dream of the day we never have to officially “work” again, this number varies between different individual and family needs. 

In the case of one Redditor posting on r/fatFIRE, this number may be right around $10 million. With this high net worth and money in a deferred account coming soon, the Redditor is very much questioning whether or not, at 53, he and his wife can finally step away from the workforce once and for all. 

What I love about this particular thread is that this individual needs to wake up to the reality that he can walk away now. It must and should be an incredible feeling to know that he can stop working today and the family will be fine for the rest of their lives. 

The Scenario 

Just about to turn 53, this Redditor and his wife are beginning to think about the next step in their world. With two kids in college and 529s that can cover a good chunk of the cost, the Redditor openly admits they enjoy a high-cost lifestyle, spending around $170,000 annually. It’s important to note that this spending doesn’t include medical expenses, which will likely add another $30,000 annually. 

Additionally, the family has around $2.3 million in deferred accounts that will arrive in the next 12 years and be taxed as income. This will be on top of around $3.6 million in taxable accounts and another $2.5 million currently split between 401(k) and IRA accounts. 

The family also has an HSA worth around $175,000, which will at least help with any potential medical expenses in the future. Add $150,000 from a Roth IRA, and you’re starting to understand the family’s financial situation, which is essentially 50% equity, 15% international equity, 28% bonds, and 7% cash. 

Thankfully, the family has already paid off their $1.3 million house, so a mortgage isn’t an issue. The hopeful scenario is that the Redditor can walk away, read, spend time with friends and loved ones, and fully enjoy his hobbies. 

The Recommendation 

While this Redditor should confirm any recommendation with a qualified financial advisor, of which I am not, there is little debate that he can walk away right now. Ultimately, the comments on this Reddit post and I agree that the most significant asset this individual and his family have is time, so walking away now is the best move. 

You have an individual with a $10 million net worth and under $200,000 in annual expenses, making this one of the more straightforward recommendations I feel comfortable providing. Let’s assume, for the moment, that yearly spending remains around $200,000. In that case, they are looking at around $250,000 pretax, meaning they need roughly $8.3 million at a 3% annual withdrawal rate, so they already have around a $2 million expense buffer built in. 

Even though he earns enough, his compensation has totaled around $1 million over the last four years. Yet, he is still prepared to walk away, and even if he still needs to come up with another $100,000 for his children to finish school, plenty of financial buffers are still available. 

The biggest unknown here is medical expenses, which could account for quite a bit of cash until the Redditor and his spouse reach Medicare age. Still, walk away now and enjoy the most precious thing you have available: time. 

The Takeaway

I’m confident that this Redditor is ready to walk away and discover whatever hobbies will help him enjoy life. I also don’t see an issue with consulting or contracting now and then if he feels he needs to occupy his time with something professional. 

Consulting will help keep his mind sharp and experience up to date while not handcuffing him to a 9-5 desk that hinders his desire to walk away. Consulting may be the next best thing, as part-time work likely isn’t an option. Still, this Redditor has handled money well and is ready to walk away if this is of no interest. 

The biggest concern here would be a sudden need to purchase another home, take on another mortgage, and pay additional taxes. Short of anything like this, the Redditor has done very well for himself and should enjoy the time available to him and his family.