“In this coming year, I’ll save about $150,000. I will get an inheritance, but hopefully not for a long time.” (Photo subject is a model.) – Getty Images/iStockphoto
I am 55 and considering an early retirement in a year.
I’m an attorney specializing in litigation. I have had five major jury trials in the last nine months. Although I love it and my firm — truly amazing people, each and every one — I am simply exhausted. I had a major health scare four years ago, and I’ve seen close friends die from cancer, heart disease, etc., way too soon.
I have about $800,000 in retirement accounts and another $500,000 in taxable brokerage accounts — they generate about $30,000-$40,000 in dividends. I own my home free and clear and have no other debt at all. I tracked my spending for two years and, except for travel, I spend about $45,000 on life. I travel often, which runs about $15,000 a year.
In this coming year, I’ll save about $150,000. I will get an inheritance, but hopefully not for a long time. I plan to take Social Security at my full age, which is estimated to be about $3,500 a month. I’ve looked into medical insurance and plan to do COBRA for the first 18 months, which will cost me $13,000 for the 18 months and hopefully the ACA will be worked out.
Can I spend more time reading, cooking, volunteering and playing with my pups?
Tired & Ready for Less Stress
Related: 2025 has been one hell of a year. Consumers should expect more ‘silent pain’ in 2026.
Your story raises questions about the importance of managing your mental health and acknowledging that you are currently in the “eye of the storm” after a grueling year. – MarketWatch illustration
Your plan to retire next year is both realistic, but I want to be sure that you’re doing it for the right reasons, and you don’t add to your stress.
If you took 3.5% a year from your retirement and brokerage accounts, you would have an extra $45,000 a year (but you would have to take your required taxes out of that). A withdrawal rate at 4%, which is designed for a 30-year retirement, would give you closer to $52,000 a year. That brings you above your current $60,000 a year in expenses, so you could actually withdraw closer to 1.5%-2%, which would be a far more sustainable and comfortable rate.
Your $15,000 on vacations honestly seems like a lot in the era of home exchanges and Airbnb. But you didn’t work all these years not to enjoy life, so I’m not going to begrudge you your well-deserved vacations. Your story raises questions about the importance of managing your mental health, seeking psychological support, and acknowledging that you are currently in the “eye of the storm” after a particularly grueling year.
The “4% rule” for withdrawals is a guideline, which is based on average market returns, inflation, stable spending and no major unexpected costs. If markets underperform or if your costs spike due to a healthcare emergency, burst pipes or broken car, that 4% will start to pinch. Even accounting for your $1.3 million, a 4% withdrawal rate doesn’t leave you much of a cushion, but you probably won’t need to withdraw such a large percentage of your savings.
Your mortgage is paid off. That’s huge. Even if you retire in 2026, remember that the cost of living is only rising. After paying your property taxes, house insurance, healthcare premiums, groceries, utilities, car payments, vacations, etc., you will have a clearer idea of whether you will be able to survive on withdrawals and dividends before your Social Security kicks in. Once that happens, you’ll be able to slash your withdrawals on your investments closer to $15,000 a year.
As you were born in 1971, 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. Initially, you’re looking at managing your investment withdrawals at 3.5% for the next decade or so.
It’s advantageous to delay Social Security. Your benefit is based on your 35 highest-earning years. For 2025, the maximum a person can earn in the year is $176,100. Social Security taxes will not be withheld above this limit. The maximum possible monthly Social Security benefit for 2025 is $5,108 for someone who waits until 70 to claim. To put that in context: Someone with that same benefit who claims at 62 in 2025 would receive $2,831 a month.
You will also face pricey healthcare premiums for the next 10 years until you qualify for Medicare. Before you decide to leave your job, talk to an accountant about income-management strategies and expected costs of enrolling in the Affordable Care Act’s marketplace. Insurance on the open market is, for the most part, more expensive than workplace-based insurance and ACA premiums can be more volatile.
President Donald Trump’s “Big Beautiful Bill” allowed a generous tax subsidy to expire, which helped defray the cost of ACA coverage. That’s poised to lead to increased costs for people with insurance plans purchased on ACA exchanges (also referred to as Obamacare). In addition, premiums could rise by a median of 15% in 2026, because most ACA insurers are requesting premium increases, per this KFF analysis.
If you wanted a green light for early retirement due to stress, exhaustion and the heavy schedule that five jury trials in nine months brings, you have it. But working with people you like is half the battle, and it might be worth talking to your manager/superior about managing your workload, and taking a sabbatical to see if you like not working 24/7. If you can save $150,000 by working for another year, use that money as an emergency fund in cash, CDS and/or bonds.
Ease into this early-retirement plan; consider part-time work and/or pro-bono work, if that would help with your transition.
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Previous columns by Quentin Fottrell:
‘He never asks for anything’: I’m 61 with a $1.5 million 401(k). My girlfriend says I do too much for my son, 28. Is she right?
‘Am I simply the unloved son?’ My mother ghosted me after my father died. Is she stealing his money?
‘We all have economic jitters’: After the Fed cut rates, should my son buy a $600K house?
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