Warning: file_exists(): File name is longer than the maximum allowed path length on this platform (260): C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br/wp-content/cache/supercache/www.forexbr.com.br/2020/02/15/upgrade-im-53-have-1-4-million-in-my-401k-150000-in-savings-and-my-home-is-paid-off-can-i-afford-to-retire/meta-wp-cache-ea2b976a6979908fb91265f5fd61ae8d.php in C:\zpanel\hostdata\zadmin\public_html\forexbr_com_br\wp-content\plugins\wp-super-cache\wp-cache-phase2.php on line 71 Upgrade: I’m 53, have $1.4 million in my 401(k), $150,000 in savings and my home is paid off — can I afford to retire? – Forex Brasil

Upgrade: I’m 53, have $1.4 million in my 401(k), $150,000 in savings and my home is paid off — can I afford to retire?

Hello Catey,

I am a 53-year-old woman who is looking to retire within the next 18 months. I currently have a home that is paid for, which I plan to use as a home base. Outside of that home, my assets are $150,000 in cash savings and $1.4 million in my 401(k). I plan to travel most of the year outside of the U.S. for the first three years of my retirement.

I hope to have a blog documenting travel/living in various places as a single mature woman. Whenever I am in the U.S., I plan to work jobs that provide a small income with insurance to offset my expenses until reaching Social Security eligibility. I am setting a budget of $30,000 annually for the first five years of my retirement, which should leave me roughly one year to work if I don’t wish to pay a penalty for early withdrawal.

Do I have enough to retire and live the life I’m dreaming of?



Dear S.D.,

As soon as I read your question, I knew I’d want to answer it, as there’s a raging debate about exactly how much people need to retire. Remember when financial guru Suze Orman threw out the figure $5 million and the internet went nuts?

Whatever the number or calculation, one thing is clear: The old $1 million benchmark isn’t going to work for plenty of people.

You, of course, have significantly more than $1 million — but you also hope to retire pretty early. So I turned to experts to get their thoughts on whether you “have enough to retire and live the life [you’re] dreaming of.”

Here’s what they told me:

“From a math perspective, yes, you can live the life you are dreaming of,” says Mitchell Hockenbury, a certified financial planner at 1440 Financial Partners in Kansas City, Mo. — but with a major caveat: “I say math perspective because life isn’t always so clean.”

So, the math could work for you, assuming, among other things, that you have smartly invested your 401(k) funds, have saved that $150,000 in a safe spot, and can truly live on about $30,000 a year, according to the experts.

Hockenbury lays it out like this: The $150,000 in savings could indeed give you the money to live on $30,000 a year for five years, as you desire; once you spend that, you will be 58, and could work for a year and then begin withdrawing from your 401(k) without penalty.

“Presumably, you want to do so until you can take Social Security and then reduce the amount you are pulling from the 401(k). Let’s say the 401(k) maintains the current value of $1.4 million (just to be conservative). The rule of thumb is you can pull 4% as a safe withdrawal rate — that equals $56,000 pretax. Take out the taxes and it puts you ahead of your $30,000 [a year] spending target,” explains Hockenbury. “So the math works, but we are not looking at risk, or adjustments to lifestyle.”