Hi Money Minder,
Hey Money Minder,
So, I’m in my mid-30s and sitting on a nice pile of $350k spread out across stocks, 401k, Roth, and HSA. The stock market has been wild lately, right?
I’ve been stashing away 30-50% of my salary since I was 18 – I guess my future self thanks me for that! The only bill I’m rolling with is my mortgage, but it’s not a huge priority with stock returns soaring over 6%. It’s honestly mind-blowing.
I’m itching to retire sooner rather than later. Any idea how much I can dip into without going broke?
I’ve been doing my own little research and apparently, I’m way ahead of the game compared to those universal retirement saving guidelines. But still, I’m torn. Can’t make up my mind if I should take the leap or hold on a bit longer.
Any wise words or personal experiences to share? Would love to hear your thoughts, even the regretful ones (or the ones that made you do a happy dance!). Thanks a bunch in advance!
Take care,
Savvy Investor
Response from THE MONEY MINDER:
Thank you for reaching out. Can you please provide more details about your inquiry so that we can better assist you?
"Hello There,"
Congratulations on reaching such a significant milestone in your financial journey by diligently saving and investing over the years. Your disciplined approach has put you in a strong position with $350k in various investment accounts. However, as you mentioned, the stock market’s recent growth has been unusually high, leading to favorable returns.
Given your desire to potentially retire early, it’s essential to approach this decision thoughtfully. While it’s fantastic that you have surpassed many conservative retirement savings benchmarks, withdrawing from your investment accounts needs careful consideration. A commonly recommended approach is the 4% rule, which suggests withdrawing 4% of your total portfolio each year in retirement to maintain financial stability. In your case, this would translate to an initial annual withdrawal of $14k.
Since you have mentioned that your mortgage interest rate is lower than what you are earning through investments, it may not be necessary to pay it off immediately. However, balancing your desire to retire early with ensuring long-term financial security is crucial. It might be beneficial to consult with a financial advisor who can help create a tailored retirement plan based on your individual circumstances and goals.
It’s essential to strike a balance between enjoying your hard-earned savings in retirement and ensuring they last for the long haul. Reflect on your priorities, risk tolerance, and lifestyle choices before making decisions about withdrawals and retirement. Remember, financial planning is a journey, and adapting along the way is key to achieving your goals.
Best of luck as you navigate this exciting phase of your financial life.
Farewell from THE MONEY MINDER.
