I have $550,000 saved. I'm 35. Can I stop saving and still retire at 55?

Answer 1

That's really good to have that much money saved at such a young age.

Unfortunately, you probably should continue saving. In 20 years, it'll have about $1.6 million worth of buying power (assuming about a 10% return with a 3% inflation rate). Current rule of thumb is that you should be able to live on 4% of that, which would be about $64,000 per year. So if you have an idea of what your lifestyle costs today, you can estimate whether this will be enough in the future.

You probably need to also factor in whether your house is fully paid for, money for your children's college costs, health care expenses, etc.

Be sure to invest your saved money wisely.

Answer 2

I have never seen a U-Haul at a funeral? Have you? You can't take it with you but you surely can stop or at least stop thinking about what is enough? What is enough? Firstly I make the assumption that the savings came from earnings not inheritance. To have saved $550,000 in such a short time span would indicate that you have been very successful so far in your life. If you graduated university you have saved almost $40,000 a year which is more than what the average person makes.This success will most likely continue or gain momentum for the rest of your short working life. Unless your lifestyle changes drastically and you start to spend more than you earn I would safely say that savings or investments will have to be made without choice. A lot of people would love to be in your situation. Please also remember that the generosity that you put out into your universe comes back to you three fold. Don't worry, be happy.

Answer 3

If the $550,000 is invested in good mutual funds, and earns 12% (the long term average of the US stock market), it will be worth $5.3 million in 20 years. I would NEVER stop saving, but you can probably afford to slow down.

Answer 4

That depends entirely on how you would like to live once you retire. If you can earn an average of 7% on that money until you retire, and an average of 6% after you retire you will be able to pay yourself a salary of 70,000 until you are 89. However, if you do use that much each year and live past 89 you are in big trouble. Use a calculator like the one on MSN money to try different numbers!

http://moneycentral.msn.com/retire/planner.aspx

Answer 5

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Answer 6

First of all, good for you! That's quite a bit of money, but you might think of investing it in something that will produce income for your retirement, for example a multi-family house.

If the company you work for has a 401K plan, I would max out the contribution percentage while you are working. If they do not provide one, I would look into a Roth IRA.

Answer 7

Why would you want to stop saving... save a little bit each year so then when you retire you can do or buy what ever you want.

Answer 8

You probably COULD but I don't see any reason why you should and I have no doubt you would regret it if you did. It would continue to grow but the actual value of the money would be far less 20 years from now than it seems to be now.

Answer 9

Sure, just don't expect to eat.

Answer 10

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