‘I spend $7,500 a month’: I’m 47, earn $260K, and have $3 million. Can I retire at 50?

Quentin Fottrell

Wed, February 25, 2026 at 12:00 AM GMT+9 5 min read

“Is retiring at 50 a realistic goal for me?” (Photo subject is a model.) - Getty Images/iStockphoto

Dear Quentin,

I am a single, 47-year-old man who makes $260,000 a year. I own a home worth $520,000 and do not have a mortgage on it. I pay $11,000 a year in property taxes and I spend $7,500 a month, although I think I could pare that back by a couple of thousand a month, if I needed to. I have $75,000 in cash, $1.1 million in a taxable brokerage account and $1.8 million in my 401(k). Is retiring at 50 a realistic goal for me?

Looking to Hang My Boots Up

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Your retirement horizon is at least 35-40 years, so you have as long to go in retirement as you have had during your working life. - MarketWatch illustration

Dear Boots,

Yep. Even modest savings between now and then could materially improve your situation.

To put your expenses into perspective, the average monthly salary in the U.S. hovers at around $5,000. Your house is paid off, so you would be relying on income from your investments from the age of 50 for the rest of your life (that could be a long time). Plus, you will have private healthcare insurance to pay for between then and the age of 65, which could cost anywhere from $600 to $1,000 a month, depending on the plan. Whatever you decide to do, I agree that it’s a good time — whether you retire at 50 or not — to look at cutting your expenses.

Taking $7,000 a month from your retirement accounts, or $84,000 a year, is equivalent to 2.9% withdrawal rate. That’s a very conservative withdrawal rate, particularly if you take it from your taxable brokerage account; you would pay a penalty taking money from your 401(K) before the age of 59½. That rate of withdrawal below 3% will have to last 40 years, which is sustainable given a 5% annual return on your investments (after inflation). If you cut your spending to $5,000, your withdrawal rate would be a very nice and modest 2%.

In your favor, you will not be taxed on all your “income.” Only a part of your withdrawals from investments are fully taxable. In a taxable brokerage account, only gains on your investments count as income. Subsidies under the Obama-era Affordable Care Act are based on taxable income, rather than your net worth or total withdrawals, so early retirees like you can manage the type and amount of your withdrawals to qualify for lower ACA subsidies. (You can read more about those ACA subsidies here.)

Other strategies to access your retirement early, including the Roth conversion ladder, moving money from your traditional 401(k) to a Roth over several years to access funds penalty-free before age 59½, and the Rule of 55, an IRS provision that allows you to make penalty-free 401(k) withdrawals if you leave your job during or after the year you turn 55. Another option: Substantially equal periodic payments (SEPP or 72(t) distributions) allow taxpayers to withdraw funds from IRAs or 401(k)s before 59 ½ without the 10% early withdrawal penalty

Story Continues  

Managing your risk

Your second challenge is to realize that as soon as you hang up your boots, you will not be adding to your principal. Your investments will have to thrive on their own steam (compounding). How much are you prepared to live on every month to give up work? And how much will you be able to live on? They are two similar, but separate, questions. There’s also the possibility that you could face a sequence-of-returns risk, where you are forced to withdraw money from your investments in a down market, which would further erode your capital.

The 4% rule is based on historical market returns consisting of 60% stocks and 40% bonds, adjusted for inflation. It has historically been able to support people for at least 30 years. There are no guarantees, and I’m assuming that close to 100% of your $3 million is in stocks, given that this sum will have increased in the next three years. (Your allocations depend on your risk tolerance.) A third challenge: Your retirement horizon is at least 35-40 years, so you have as long to go in retirement as you have had during your working life.

On the upside, several expenses typically reduce in retirement: Payroll taxes disappear and work-related costs — commuting, daily lunches, buying office suits etc. — also diminish. On the downside, spending on travel, healthcare and leisure activities tend to increase. And as you start taking Social Security benefits, which are likely to be significant given your salary, you will have to rely less on taking money out of your 401(k) and/or brokerage account. (Keep in mind, my withdrawal estimates are done without knowledge of your specific allocations.)

Choosing when to take Social Security will depend on your expected longevity. Your full retirement age is 67. That’s when you get 100% of your primary benefits. The earliest you could have claimed retirement benefits was age 62, but that would permanently reduce your benefit (by up to 30%). If you wait until after your FRA, you earn delayed credits, which increase each month until age 70 by roughly 8% per year. You are also young enough to find another, perhaps more fulfilling or less stressful job and work another 10-15 years.

Given that you are earning such a good salary, I assume you are feeling burnt out by your job; you may wish to consider a sabbatical, part-time work or change of company. Yes, you’re in good shape, but I don’t want you to make a financial decision for an emotional reason that could hurt you later on. You’re young, you’re in good financial shape and assuming the stock market continues to adhere to historical averages and your early retirement is not hit by another Great Recession. You never want to withdraw money from your investments in a down market.

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