"When you have $2 million saved, you are in an enviable position given that the average 50-year-old has a $592,285 401(k) balance while the median 401(k) balance for 50-year-olds is $252,850, according to Empower. However, while it is clear that $2 million is a lot of money, it is not necessarily enough to retire at such a young age. Before you quit work at 50 because your nest-egg has hit the $2 million mark, there are a few key things that you need to think"
"You can't just take an unlimited amount out of your $2 million investment account balance whenever you want, or your money will run dry. Instead, you need to pace your withdrawals. Morningstar experts now recommend a 3.9% withdrawal rate, which would mean that $2.7 million would produce around $74,000. The calculator below shows what that would look like, including how long your money would last."
"The next big thing to think about is how you are going to handle medical insurance if you retire at 50. You need insurance because otherwise even a single relatively minor illness could be a huge disaster. You aren't going to qualify for Medicare until you are 65, so you'll have to get coverage for a long time. While COBRA allows you to stay on your employ"
When you have $2 million saved, that is well above average 401(k) balances for 50-year-olds, but $2 million may not suffice for retiring at 50. Safe withdrawal rates matter: Morningstar recommends about 3.9%, implying roughly $74,000 annually from a $2.7 million balance, so withdrawing conservatively is prudent when retiring young. Living in a low-cost area or reducing spending can make $74,000 adequate. Medical insurance is a major concern because Medicare eligibility begins at 65, so retirees must secure coverage for many years; COBRA can extend employer coverage temporarily.
Read at 24/7 Wall St.
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