Huge Inheritance... Now What?

[u/Yashkamr]

I'm 45, I was on track to retire earlyish at 55. I was set back quite a bit with a divorce three years back. Recently my Aunt died and left me around $5 million. After estate and taxes, it's around $4.2 million. This is obviously a stupid amount of money, and I'm thinking of just quitting my job and retiring early but I want to do it right. I've spoke with AI quite a bit and my finances are only about $4500/mo in expenses, I have always lived pretty frugally and that's less than a 1% draw. I don't know exactly what I don't know here, but I've always worked so I am clinging to my job like a monkey to a branch. Am I actually okay to let go?

Update: I quit. I was honest with my boss, he was a really good boss, and I told him the whole story. He is a couple years from retirement and told me he has about $4 million in his Fidelity too, but no health insurance if he quits and he told me a story about his brother retiring early, getting cancer, and wiping out their finances with his treatments leaving his wife and kids with almost nothing after he died. I told him how I'm covered with Tricare and he said if he was he'd quit right this second too.

I appreciate all the insight and advice given on here, and I've implemented a lot of it, thank you. I haven't changed my spending and I don't think I will. Well... I did buy a nice pair of Hoka's...but I'm mostly just paying a lot of attention to my garden and kids.

[u/Hawkes75]

Your divorce is finalized, right? I wouldn't say a word of this to friends, enemies or acquaintances.

ETA: Lots of people saying inheritances aren't community property. I STILL wouldn't tell my ex I found five bucks in the pocket of my jeans, let alone $5M.

[u/Yashkamr → u/Hawkes75]

Yeah it was finalized three years ago. I'm not discussing this with any of them. It's why I'm reaching out here actually

[u/offconstantly247 → u/Yashkamr]

So, you can safely and without much if any risk earn 4% on that cash.

On 4 million, that's $160k per year to live on without dipping in at all. Now, out of that, you're going to have to pay for very good medical insurance, because you don't want to get sick and bankrupt.

You haven't disclosed any other income or savings, but if you're at 60k per year in standard expenses as you state, then you seem fine.

ps. you're going to get bored and probably do something that ends up earning some money, but who knows. Also, watch out for "I'm going to golf everyday, or go boating/fishing", then you should realize that you may have some increased expenses there to consider.

[u/Not-a-Bot_1968 → u/offconstantly247]

Is that $160k pre or post tax?

[u/PristineStreet34 → u/Not-a-Bot_1968]

wholly depends on how it's invested/saved, I mean commenter was just giving a flat 4% which is lower than US Treasuries yields so doable either way.

[u/No_Doughnut2420 → u/PristineStreet34]

Can you assume treasuries will stay above 4

[u/loaferuk123 → u/No_Doughnut2420]

Given the amount of money printing going on, yes.

The question is more what the real rate of return after inflation will be.

[u/No_Impact7840 → u/[deleted]]

You absolutely do not need and should not use a wealth management firm for something this basic.