Should I quit my teaching job with a $3 million inheritance waiting for me?

A Reddit user who is soon going to receive a large inheritance is trying to decide what her best course of action is. She is 51 years old, and she is weighing whether to keep working or take the money and live off it now.

This decision could shape her financial future for decades, so it is worth carefully thinking through the pros and cons of both paths. Her situation has a wrinkle that makes the math more interesting: a few more years of work could unlock a benefit worth far more than most people realize.

Does it make sense to quit a job with an inheritance coming?

The Reddit user explained that she is on track for an inheritance of around $3 million. She is debating taking that money, leaving work, and simply living off the inheritance. That idea has real merit.

A $3 million inheritance invested conservatively could generate substantial income for decades. If the Redditor follows a 3.9% withdrawal rate, which Morningstar’s 2025 State of Retirement Income research identifies as a safe starting rate for a 30-year horizon with a 90% success probability, she could withdraw roughly $117,000 per year. That is a comfortable income for most households, though it comes with one major caveat: private health insurance costs real money before Medicare kicks in at 65.

At 51, she faces 14 years of buying coverage on her own. ACA Marketplace Silver plans now average around $1,100 to $1,200 per month for early retirees, and that figure only climbs as she ages toward 64, when premiums can top $1,766 per month for a full-price benchmark plan. The enhanced ACA subsidies that helped offset those costs expired at the end of 2025 and were not renewed by Congress, so anyone with substantial investment income will likely pay close to full price. Over 14 years, healthcare alone could consume a meaningful portion of that $117,000 annual draw.

Several Redditors also warned the original poster not to consider quitting or making any change until the inheritance is actually in her bank account. Something could always go wrong, the amount could be smaller than expected, and the probate process can take time. Once she has the money, though, if she is confident she can live well on approximately $117,000 per year after healthcare costs, quitting becomes a genuine option.

There’s a pension at stake, and that changes the game

In many situations, an inheritance large enough to live on gives someone every reason to stop working, assuming they have something meaningful to fill their days. Trading time for money when you already have plenty of money and limited years to enjoy life rarely makes financial or personal sense.

In this case, though, a teaching pension fundamentally changes the calculation. If the Redditor works another nine years, she qualifies for a full teaching pension. Even four more years earns a reduced pension. That pension represents decades of deferred compensation baked into her employment contract, and walking away before reaching either threshold means forfeiting it entirely.

Pensions are valuable precisely because they provide inflation-protected, guaranteed lifetime income that no market crash can eliminate. Across the U.S., retired teachers typically collect between $40,000 and $55,000 annually in pension income, with wide variation by state. A fully vested California teacher can earn more than $70,000 per year. The lost pension income from retiring too early is not just a number on a spreadsheet; it is guaranteed money the OP earned through years in the classroom.

There is also a meaningful change in federal law worth factoring in. The Social Security Fairness Act, signed on January 5, 2025, repealed the Windfall Elimination Provision and the Government Pension Offset. Those two provisions had historically reduced or eliminated Social Security benefits for teachers who also had credits from Social Security-covered jobs. With both repealed, teachers who worked in covered employment at any point in their careers can now collect their full Social Security benefit alongside their pension, adding a potentially significant stream of guaranteed income to the picture.

So unless the OP is genuinely unhappy teaching and wants out immediately, working at least four more years for the reduced pension makes sense. Working nine years for the full pension is likely even better. Teaching typically comes with generous time off and summers free, so she can still do much of what she wants in the meantime. The inheritance can compound and grow further while she earns her salary. By the time she retires with the full pension, plus the invested inheritance after additional years of growth, she will have built a retirement picture that is difficult to improve upon.

A financial advisor can help the OP model the exact tradeoff between retiring now and working longer, and make sure she understands the lifetime value of the pension she would be walking away from.

Editor’s note: This article was updated to reflect Morningstar’s 2025 safe withdrawal rate research, which raised the baseline figure to 3.9% (up from 3.7% in the prior year’s report), adjusting the estimated annual withdrawal on a $3 million portfolio to approximately $117,000; current ACA Marketplace premium data was added to quantify the pre-Medicare healthcare cost burden; and a paragraph was added covering the Social Security Fairness Act signed in January 2025, which repealed the WEP and GPO provisions that had historically reduced Social Security benefits for teachers with pension income.