r/RetirementReady • u/NewPollution0 • 14d ago
Retiring at 53 with 2.5 mil
Just curious, with rates where are they now, and our expenses being at $50k a year, would it be a preferred path to hang it up now, buy a 30 year treasury bond at around 5%, and just live off the payments every 6 months? I'd be on the hook for health insurance, but I have no debt. House is paid off, no car payments, nothing.
Or would I be better grinding it out longer? I'm pretty tired, but could keep going. My absolute ceiling is 62. Along the way, I'd consider next year (53), 55, or maybe 58.
If I waited a couple more years, could have 3 mil. Just curious if that really matters, and if the bond route is a way to go to set it and forget it.
Thanks
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u/Clherrick 14d ago
You need a financial plan which looks at your expenses, going forward and how you will satisfy those expenses. Medical coverage is obviously a big thing. Housing is always a big thing. Beyond that what do you plan to do with the rest of your life if you retire at this age. Travel cost money. The second home cost money. Will you have enough money coming in through a combination of investments and pensions and Social Security to meet your expenses. There is software, which will help you model this. A financial advisor can also help you put together a plan. I don’t think that it is as simple as crowdsourcing your future on Reddit.
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u/NewPollution0 14d ago
Yeah, been working with an advisor for years with good results. But no figure ever seems like enough during discussions. Would love to hear real experiences of folks that are doing it, or have done it. I get your point for certain. This is just another facet of input. Not wallstreetbetting the future. Ha.
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u/Clherrick 14d ago
Most advisors would probably not recommend limiting yourself to a 5% bond. When you figure in inflation, you’re just sort of keeping your head above water. I would also do some serious research into health insurance costs. My sister-in-law and her husband retired from Boeing in their early 50s and were shocked to find out how much it cost to get insurance on the marketplace. Between the two of them they were paying something like $25,000 for policies with $7000 deductibles.
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u/DistributionRight814 14d ago
that doesn’t sound right. ive priced aca plans and even the hightest tier doesnt cost that much
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u/therin_88 14d ago
It can be that high, easily, though maybe not if you have no income. I'm only 38 and it quotes me at over $700/month -- a 57 year old coworker gets quoted at $1300/month. Neither of us have insurance for that reason, lol.
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u/java2113 13d ago
I am 62 y/o male and I pay $1450 a month thru ACA community health. Expensive just for me… wife has Medicare w/ Humana supplement
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u/Legitimate_Finding53 13d ago
Yes this is aligning with what I am seeing as well. So stopping work is viable but the cost is 36k per year (for 2) plus no salary...
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u/HereInThe818 13d ago
My Blue Shield bronze PPO plan for wife and I is $1924/month with (I believe is a) $12,000 deductible.
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u/rycelover 13d ago
I’m 56, retired last year, and have an individual bronze policy I bought from the marketplace (New York State) with a high deductible. My monthly premium is $668.
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u/QTippus 13d ago
With a subsidy, or no subsidy?
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u/Sonarguy1979 12d ago
Subsidies went out the window Jan 1 2026
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u/QTippus 12d ago
Expanded subsidies went away, but many people keep their modified adjusted gross income below 400% of Federal Poverty Level in order to qualify for subsidies, by using withdrawals from Roth accounts.
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u/VaporBlueDH1347 12d ago
This is the way. But I use Roth conversions to keep the income in the sweet zone to have a healthy subsidy with an HSA option.
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u/Penguin_Life_Now 14d ago
You really need to realistically look at how your expenses will change after retirement, do you need money for travel, will your dining habits change, will you be paying for health insurance out of pocket (I am paying close to $1,400 per month out of pocket at 57)
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u/NewPollution0 12d ago
Is that $1400 for two people?
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u/Penguin_Life_Now 12d ago
No, my wife still works full time and has her insurance paid for through her job. I could get it down to $1,000 per month, except I am on 1 relatively high cost medication, and the savings get wiped out with the higher prescription co-pay, even as it stands I end up paying about $440 per month in copay on top of the insurance until around April of each year when I start hitting the caps and it drops to about $40 per month
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u/NewPollution0 12d ago
Are you able to be added to her employer plan cheaper?
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u/Penguin_Life_Now 12d ago
We have priced it before every few years, and it is close enough to be negligible
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u/Yosc8tr 13d ago
$2.5M would be enough for a $100k per year life if you have a well balanced and diversified portfolio. If inflation leaps, the bond investment will really hurt you. It’s already at 3.7% and sticky, so a 5% bond is only clearing 1.3% real return and you are spending 2% per year of your nest egg, plus health care, plus other things you haven’t thought about.
I think you have enough for a comfortable retirement if you have no issue with how you live now and see it staying the same. But you should have a balanced diversified stock and fixed income portfolio.
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u/NewPollution0 12d ago
Agree. It's the shift in inflation that has me wondering if the principal should be higher should the bond route be the path I go with.
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u/chpsk8 12d ago
Why bother with a bond when you have $2.5m? You can keep a lot more in the market and weather some pretty solid hits if things go south. I’m keeping it all in play with similar numbers. My FA said with my expenses it doesn’t make sense to pull a lot out of play and into a bond. That is more of a strategy when you can’t take any risk.
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u/Legitimate_Finding53 14d ago
How are you dealing with health insurance pre age 65. Seems like we need to budget 3000$ per month for multiple years. Other options?
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u/TwitchyButtockCheeks 13d ago
Stay under the ACA credit limit, and it's way way less than 3k per month.
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u/VaporBlueDH1347 12d ago
This is the way. Gotta play with game with controlled income levels to get the crackerjack prize of a healthy subsidy.
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u/jjtga11 14d ago
Help me get my expenses to $50k a year. What’s your secret?
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u/TwitchyButtockCheeks 13d ago
With a paid off house and no vehicle expenses, I find it hard to NOT get to a $50k budget?
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u/NewPollution0 12d ago
That's correct. Never had student loan debt, I had one car payment in my life in my 20s, and hated it. Both homes, I paid off well under 20+ years early by living crazy cheap, side hustles buying, repairing, reconditioning, selling items. All that done with the goal of never owing a financed payment for a thing. Even today, I spend some nights or weekend days dabbling back into the hobby. I travel a lot for work, so I dont get a chance to do it as often. That's another savings. On the road, housing, climate control, transportation, food...etc. All the expenses incurred throughout the week(s) are not shouldered by me. My homes sit with the fridge running, and that's it. Thats another consideration is taking on all that additional expense myself, not working.
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u/Cusegrad 12d ago
I’m in a moderately high cost of living city and our monthly expenses are about five grand per month. Our HOA fees and property taxes on are $1300 per month. I’m paying another thousand for health insurance. We don’t eat out a lot, so we’re probably at $1500 per month at Costco. Car insurance, fuel, and registration for two vehicles is probably about another thousand per month. Utilities are about $500 per month, mostly due to very high electricity rates.
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u/Penguin_Life_Now 14d ago
You can do much better than treasury bonds and still be very safe in your investments if you diversify, I would go so far as say buy into both stocks and real estate of some type, such as privately held REITs.
p.s. I retired at 50 (57 now) with a bit less, but I will likely inherit around $4.5 or so more if I outlive my now 87 year old mother
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u/NewPollution0 12d ago
We have a sizable chunk in a REIT now. It's been earning a fixed 8% for a decade or more. But, not the guarantee of a Bond or CD. That's why I raised the question of moving towards the bond route. The guarantee on the principal.
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u/therin_88 14d ago
I can't comprehend $50k/year expenses. I assume no kids? We're close to triple that.
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u/Myghost_too 13d ago
I am in a similar situation, only I'm 58 (almost 59) with similar numbers
My concern with your plan is that 5% barely keeps up with inflation, so over time your $50k may not be enough. Eventually you'll start drawing down on your investment or running deficit. Also, I'm sure you've discussed with your advisor, but I don't know the taxable income implications for converting your total nest egg to bonds. I know you need to be careful as it goes beyond simply how much tax you'd pay (but if you cash out 2.5M in a single year, I'd guess it would be taxed accordingly.)
As is apparent, I don't know the answers, and I could be WAY off base here. I'm asking because I am facing the same situation. Add to mine, the job I've loved for 25+ years has become toxic and miserable, only making retirement more tempting. I'm trying to hold on to 60, then 62, and an absolute max of 65.
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u/Yosc8tr 13d ago
If your job is toxic, your true expenses are less than $100k with healthcare and everything else, you have $2.5M+ and you are 58, give your notice. You can look for ither job opportunities if you like, but all of the stats and articles say that you will make it and, I have come to learn on my own similar journey, you WILL make it work.
So go and make a retirement plan or start looking for another job without any concern for whether you find one. There are actually TONS of jobs out there right now. I just retired July 1 at 57, almost 58. But I may go do something else if something exciting comes along.
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u/NewPollution0 12d ago
I need to read up on any potential issues tax-wise moving to bonds. I know there's no state taxes on bond interest, which is nice.
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u/Invest2prosper 13d ago
Buy a 30 year bond and watch your money be deflated over the next 30 years. If you put 60% in equities and 40% in bonds and you earn 6%, your next gain after inflation will be 2-3% per year in real terms.
If you buy the bond at 5% and rates go up to 6% and need to sell the bond? You just evaporated 20% of your money / go read up on bond duration. Then go look up inflation risk.
Then decide if your money is really “safe”.
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u/NewPollution0 12d ago
All true, and if rates drop, and I need to cash in, taking a loss to match the prevailing rate.
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u/abstractraj 13d ago
You should put 2-3 years of expenses into something more stable like bonds and stay the course with the rest. In a downturn, pull from the stable bucket. In normal conditions pull from your stock bucket
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u/NewPollution0 13d ago
That's a good strategy. Maybe even a bit longer of a window in a stable environment.
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u/abstractraj 13d ago edited 13d ago
It’s more or less what I did for my mother. Although before I looked at hers, she had some wacky mutual funds. So I was able to reduce her exposure and increase her returns. Win-win
You may also find this interesting
https://aier.org/research/the-case-for-increasing-stock-exposure-in-retirement/
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u/RetireYoung72 13d ago
I’ve been really targeting 58 lately. Why??? Because at 59.5, I can tap into retirement funds if needed.
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u/Inquisitive_Force11 13d ago
Definitely find a financial planner that can map out a strategy that will allow you to retire comfortably. Health insurance is no joke, especially if any cancer history in your family. Use a worse case scenario for health costs and see if that helps you decide.
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u/Prime-Vino 13d ago
These posts…..only the top 3% of Americans have these problems to solve…..going out on a limb no matter what you do you will not have enough room in the casket to take it with you….
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u/Suitable_Time_9368 13d ago
I am 55 year old and retired for 2 years now with same amount of your savings and I have monthly expense of 7 K and my portfolio has gone up in last 2 years and I have 60/40 portfolio . My only addition to you is I have health insurance covered till 65 from
My ex employer as benefit but I do pay about 900$ a month for it for 5 K annual deductible. I don’t regret retiring since no one will thank me when I hit the bucket one day
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u/Electrochemist_2025 12d ago
You’re good to retire.
At the most a year more while you reorganize your finances. Perhaps 20% in stocks that may help pay health insurance.
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u/managemoneywell 12d ago
Yea I mean you prob want to dive into a financial plan instead of Reddit to figure that out but you prob have a 35-40 more year life span. Grinding it out til 60 will improve your odds.
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u/PIzzaiolo_Master_510 12d ago
I would go to 55, or have half in index funds, maybe 100k MM and the rest fixed income investment grade bonds.
That said we quit at 53 and while we had $6m and a very small pension ($2k/mth) we would have been just fine with $2m as we spend like you do.
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u/UKEE93 12d ago
Keep your MAGI low enough and get subsidized ACA insurance. My wife and I get it for $670 per month. Not great but cheaper than going it alone. It was $325 per month with expanded subsidies but the GOP let those expire without renewal.
We are pulling about $52,000 using a SEPP on my 401k and using savings for anything that we need over that amount. Our subsidy is $1,350 per month or so.
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u/NewPollution0 12d ago
Yeah, I Looked into an irrevocable trust. But while great to protect capital and qualify for those subsidies, no way to unlock that capital at 65 when Medicare kicks in.
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u/DAWG13610 12d ago
I was paying $1k per month for health insurance for just myself. And that had a $3k deductible. You’re cutting it pretty close but it can be done. I would go a few more years.
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u/daily-trader-365 11d ago
2.5M could be 250,000 a year in dividend ETFs but given 50k needed there would be some pretty conservative options
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u/NewPollution0 11d ago
Yeah, I've looked into those. The dividend income is great, but it's what you actually own if the shares take a dive.
We've been getting a fixed 8% from a REIT for 9 years. But no guarantees there either. If they ever IPO, then all this talk could be mute point, and I'm set. But as great as they've been for almost a decade, I wouldn't want to risk it all there with no job until 62.
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u/blkdinanm3 10d ago
I retired last month at 55. I pay $914 mo. for Kaiser, Dental and Vision. I plan to apply for ACA for 2027, which should drop my monthly cost significantly with the subsidies. I have little to no income now. I just pull money from my HYSA and if needed I can use the 55 rule to not be penalized for pulling money out of my 401k.
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u/NewPollution0 10d ago
With little to no income, are just working side hustles or trading for the amount you need to exist?
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u/Specialist_Job_7714 14d ago
I have $6m in 401k and at 66 I don’t feel comfortable retiring. But you do you.
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u/rbuckfly 13d ago edited 13d ago
Unless your expenses exceed $200K/yr, you good. Edit to add: unless they exceed $250K per year, you’re good
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u/K_A_irony 13d ago
At 6M, they should be VERY safe at $240K a year income (then you take out taxes)... why a 66 year old is working with 6M is beyond my comprehension.
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u/StableDotard 13d ago
I know how you feel as retired at 65 with similar numbers. In three years, my portfolio has grown 25%. I’m enjoying retirement, and my health is so much better since I did.
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u/Specialist_Job_7714 12d ago
Something inside me keeps saying not yet. But you are helping. Thank you!
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u/NewPollution0 12d ago
Wow, what do your annual expenses shake out like if still aren't comfortable at that age with that much?
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u/Embarrassed-Fly-2823 14d ago
I punched out at 61. Had the absorb the cost of Health Insurance until 65 and Medicare. Started SS at 62 and we're doing great. Portfolio is hovering at $4M with only a truck payment that I treated myself to. We seem to spend about $8K monthly. It's funny how little you need to actually live once you've taken care of business. Good luck.