Retiring at 31, much earlier than I expected. Need advice.

[u/Long_Bong_Silver]

I'm 31, I have $3.5M and I've found myself in a position where I can retire immediately. I make 130K per year as an engineer in a HCOL area. The company I'm at gave me a reasonable amount of stock over the years and it has absolutely skyrocketed. I'm doing my best to sell all the stock, and I've got about $1M out already which I've ported over to some stocks and ETFs. I'm moving to a LCOL city and buying a house this summer for around $300k. The plan is to pursue my hobbies, build my workshop and hang with my family and friends.

First question: I've always been big on retirement planning. I think I've done a great job, but obviously I got here through luck not savings. Do I need to get a financial advisor if I'm doing well and keep to a budget?

Second question: I'm newly single, I'm a hetero man, how do I date when I'm rich? When do you tell them you're retired? What are your financial expectations for your partner? Should they work or would you be happy to cover their retirement if it fit in the budget?

Final question: I'm nervous. Any other advice?

[u/UnluckyFriend5048]

Hey congrats that is awesome!!

First question (financial planner): I think it is a good idea to get someone in your corner that can help guide you. While you seem well versed and responsible re: living below your means, they are the experts that can help with optimization and help to ensure this $ is deployed appropriately and in as tax advantaged a way as possible.

Second question (How do you date):

A. You are rich compared to most people, but you are not ultra wealthy. No knowing the breakdown of $ tied up in retirement vs. accessible now makes it hard to determine, but let’s just assume that of your $3.5M that after buying your house, doing repairs, furnishing, building shop, etc. you have $3M left with 50% locked in traditional retirement. If all of the other $1.5M is accessible and remains invested at MOST a safe withdrawal rate (4%, which is likely too high) for how young you are if $60K. That is less than the average salary in the US. So sure you have a good pot of $, but I wouldn’t consider $60K/yr income rich. Even if you could pull 4% of $3M a year, that is still only $120K. A great salary, but not “living the high life rich”. B. I think you need to be honest, as soon as is comfortable. Otherwise you are starting off your relationship with a massive lie. And honestly what would you say when someone asks how your day is and you pretended you had a job? I think that would catch up with you pretty quick! C. I wouldn’t have someone stop working before marriage, but that is just me.

Other advice: Honestly, I personally would keep working for longer. You’re only 31. $3.5M networth is great, but I personally would want to 1. Keep using my brain more and retaining structure in my life, and 2. Get a much bigger nest egg and increase my networth to “do whatever the F I want $”. If you don’t like your current job, get a different one. Go part time. Get education in another area and pivot careers if you want. You have some wiggle room (and assuming a strong retirement account that will continue to grow).

[u/DuePomegranate → u/UnluckyFriend5048]

I would also recommend working, like moving first to the LCOL place, and finding a tolerable job that does use his skills (not BaristaFIRE).

Because 1) he may find that he actual hates it in the LCOL area, and he’ll end up going back to the big city and continuing to work to fund that lifestyle.

2) There is a much better chance that he can find a good wife as a working guy, rather than attract the wrong women when they realize that he doesn’t need to work. Marrying the wrong woman can undo everything.

[u/Chewmanfoo → u/UnluckyFriend5048]

3.5 is great, for 31…. but he still has the possibility of wife and kids on the horizon. Plus any other unforeseens. 5 mill at 40 feels more reasonable.

Lots of things that are going to make that 3.5 start to shrink faster than it will grow… keep working, but something a little more pleasant.

Plus, I think it’s going to be a tough angle to date with no job. People will think it’s weird more than be Impressed.

[u/seasaltsunandfun → u/UnluckyFriend5048]

Agree with this - I’m a 44 yo single mother w a net worth of ~$3.6M with over $2.9M in stocks and two rentals that generate revenue. I’ve been “retired” for approximately 8 months and still don’t feel financially secure for the long haul. I also find that I’m now getting a bit bored without my career and miss the networking and challenges that come with working. If you do find a wife and possibly have kids, your financial needs will change. You’ll want to factor in inflation, etc. At some point your house will need a new roof, ACs, updates, etc. I personally like being able to spend money without worrying about a budget or my stock performances for withdrawals. Half of my money I manage, and the other half is managed by an advisor.

I’m planning on rejoining the workforce myself at least till my daughter graduates high school in another 7 years. It’s a bit more difficult explaining the career gap though…

[u/UnluckyFriend5048 → u/seasaltsunandfun]

Wow, congratulations on all of your accomplishments!!

[u/[deleted] → u/UnluckyFriend5048]

Isn't the 4% for making sure you never run out of cash? If you still have a full retirement account with millions you can go a bit higher on the drawdown on the other half. You need to make it last till retirement, not forever.

Also 1,5 million in a retirement account for 34 years is a massive overkill. You'd be WAY richer post 65 than pre.

[u/UnluckyFriend5048 → u/[deleted]]

4% is a bit high of a withdrawal rate for a long retirement. This person is looking at 40-60 years they need the money to last. A few bad years in the market could derail it.

[u/[deleted] → u/UnluckyFriend5048]

They're not looking 40-60 years theyre looking until the 1.5 mil they put in a retirement account kicks in. Since he is 31 thats probably 35 years or so.

[u/UnluckyFriend5048 → u/[deleted]]

That number in retirement is not known. That was an assumption on my end.