A Reddit user with $19 million is contemplating retiring at 40 while spending $250,000 annually. Initially, it seems feasible with a safe withdrawal rate suggesting he could live on $703,000 yearly. However, plans to purchase a $6 million home raise concerns as it would decrease his liquid assets to $13 million, limiting his annual income to $481,000, and potentially increase additional expenses. The complexities of high spending and significant lifestyle changes create uncertainties in ensuring financial stability in early retirement.
With $13 million invested after accounting for the house, the income his accounts could safely produce would go down to $481,000.
A safe withdrawal rate of 3.7% would allow the OP to produce $703,000 in annual income, far exceeding his $250,000 spending.
Buying a $6 million home would reduce his liquid assets to $13 million, increasing expenses from insurance and property taxes.
Retiring early as a high-spender brings complexities concerning rising living costs in addition to lifestyle aspirations.
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