Accumulating $1 million by the age of 45 opens up the possibility of early retirement, particularly when living modestly. Many within the FIRE movement seek financial independence and use the 4% rule to evaluate their withdrawals. This approach suggests a sustainable withdrawal rate of $40,000 annually, not including potential Social Security benefits starting at age 62. However, considering a $40,000 yearly budget stimulates reflection on lifestyle choices and locations for retirement, ensuring that funds last while still enjoying life.
If you have $1 million saved up by 45, it's definitely worth considering early retirement.
Traditionally, most people looking to retire early look at the 4% safe withdrawal rule as the baseline for whether or not it's affordable to quit.
Knowing that you only have around $40,000 to spend annually ahead of Social Security might make you think twice about where and how this money would allow you to retire.
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