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Married, 48. Saved $2.5M. App. $.7M in 401K. How long should I continue to work?

#11
Like others have said, there is not much info in your post, so it is hard to address. It seems a bit odd to me you would have $700K in a 401k, but a million-eight elsewhere?


Anyway, the caution I would issue is that medical insurance is really costly, and retiring that soon just means the costs go on, and rises, until age 65, when Medicare will kick in. Also, you can't normally access a qualified plan without penalty prior to age 59-1/2, if I recall correctly. You may be able to elect distributions from such a plan if you commit to an actuarial distribution prior to 59-1/2, but I don't know how early you might do that. In any case, it appears to me you would have to live from your-non-401 funds until you are 59-1/2.
My gestalt answer to your question is that 48 is too young to retire for a lot of reasons, not all financial. I retired 'early' at 55 because I happened to have a terrific defined benefit plan that allowed me to withdraw over 5 years, rollover and invest in an IRA. This has worked well for the 12 years since retirement.
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#12
There is a way to begin taking distributions from your 401(k)/IRA without penalty (you will still pay taxes, of course) by taking a72t early distribution. It allows you to take a “Series of Substantially Equal Periodic Payments”, based on a calculation involving your current age and the size of your IRA.
But once started, you must continue taking the periodic payments for five years, or until you reach age 59 ½, whichever is longer. Also, you will not be allowed to take more or less than the calculated distribution, even if you no longer need the money.
I'm looking into this provision for my early retirement plans 
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#13
Sounds like you have " a job " & all that entails - if you were successfully self-employed, with more discretionary decision making, i.e., less stress - may wish to continue working in some capacity - you did not state your family situation - children etc.
 
Note: Just not enough information provided for an outsider to comment or make recommendations on.
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#14
Retirement takes years of planning, both personal and financial. While you have amassed quite a tidy sum, 48 years old may be too early.  Here are some things to consider:
 
Will you work part-time?  Will your wife continue to work? Have you investigated the cost of health insurance for you and wife?  [I pay over $1k per month for my plan] ?  How much money do you have to live on for the next 11 years as distributions from IRAs and 401k have a penalty for withdrawal prior to 59.5 years?  What is your monthly mortgage payment (or is house paid off)?  Real Estate taxes?  In other words, you need to have a realistic annual budget to determine how much money you will need to live in your current lifestyle.
 
On the personal side, what do you plan to do with all that free time?  hobbies, travel, etc.  Those cost money.  They will have to be included in your annual budget.
 
My suggestion:  Plan to work for another 5-7 years [55 seems like a good age].  Max out your 401K, including the 50 and over when you reach there.  By 55, you could have $5MM in assets, a much stronger position for a comfortable retirement which will allow you to live an active and exciting lifestyle.
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#15
You can take withdrawals from the taxable portion while the 401(k) grows.  Once you retire, you can convert your 401(k) to IRAs (Roth or traditional depending on inputs to 401(k)).  I do not understand how sriinvestor suggests this person could only get $35 / year to live on.  That is 1.4% per year. 
While I do suggest targeting BELOW 4% per year when retiring this early for withdrawal rate - the withdrawal rate can be well above 1.4% per year unless you really are not investing for growth. 
There is no reason to not try to keep as much in tax protected vehicles (IRA and 401k) for as long as you can - so I don't agree that the percent you can live on must be calculated from the apparent $1.8 million in regular savings and investments.  Just manage the cash flow apparently through the age when you can access the 401(k) - that should be easy with the numbers you shared as long as you are not spending too much anyway.
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#16
[font=Helvetica,Arial,"Lucida Grande",sans-serif]Not a day longer than want too, you are in great shape, just work out you needs and wants, adjust your lifestyle to fit and you are good to go.[/font]
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#17
I have been retired for 11 years, so I have some experience in watching the cost of living expenses, health care cost, insurance premiums, and all other life's necessities increase every year.  If you are in good health, you could live another 40 years or even longer, with steady increases in your cost of living.  The name of the game in retirement is cash flow.  So you have to ask yourself if you can generate at least the same cash flow you have now without working, and an increasing amount of cash flow in future years.  Even if you are now debt free, $2.5M may not be enough to sustain a long-term retirement.  Keep working until you can convince yourself that you will have the cash flow you will need, especially if it will require selling equities during half a dozen bear markets in the next 40 years.  Before you retire, read a few books on financial planning for retirement, to get very good advice.
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#18
There are 3 simple questions:

1. Have I had enough ( am I tired of working, hate my boss, burnt out, etc.)

2. Do I have enough (there are plenty of calculators out there - Firecalc, Fidelity, etc. that can answer the question given current assets, expected expenditures, assumed longevity)

3. Will I have enough to do (retiring just to sit around being bored is no fun. Do I have hobbies, charity work, travel, children/grandchildren, etc.)

I know many people with very little (but enough) money who had good answers to #1 and #3 who are successful at retirement. I also know many people who have good answers to #1 and #2, but no clue about #3 who are miserable in retirement.

How much money you have is only part of the equation. In fact it may be the least important part
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#19
<p>One of two major benefits you get with your Fidelity account is access to their <p>401k Calculator</p>. Take the time to fill it out in detail. It is well worth the time spent. Their financial planners will meet with you to help you accomplish that. Get that done! It provides clarity as to whether you can truly breath easy or might ring an alarm bell putting you on a course of action to put out a potential fire.

Work till they lay you off or until you cant stand it a moment longer if you must continue working. If you have to keep working do something that will make you happy. It will not take that much income to preserve your nest egg a bit longer if necessary.</p>
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#20
I think the question about working and wealth are separate issues. I could retire at any time, but choose to work less and do what I want to do. Since I have my own business, I simply take more vacations, work fewer hours, and have taken on some community efforts like board member on a non-profit, local homeowners group, etc. I keep very busy on all levels and I think that is the key to a long life. Plus I find that I can earn the same as before with less work and I am not dipping into retirement funds.
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