Can You Retire Early with $2 Million and a Six-Figure Pension?

"Without a pension, I'd say this poster might be able to retire now, but there would still be a meaningful level of risk involved. A $4.5 million portfolio is an impressive achievement, but for someone retiring in their mid-50s, withdrawals would likely need to stay around 3 percent per year to preserve that balance. That works out to roughly $135,000 in annual income."

"So when I came across this Reddit post, my initial reaction was that this person is likely in excellent shape to retire now. Not only do they have a 401(k) valued at $2 million, but they also hold an additional $2.5 million in a brokerage account. And the real difference-maker is their pension - a substantial benefit that provides a reliable income stream regardless of market performance."

Early retirement in one's 30s or 40s requires savings to last far longer and carries significant risk. Retiring in the mid-50s reduces longevity risk by shortening the retirement horizon to roughly an extra decade. The person holds $2 million in a 401(k) and $2.5 million in a brokerage account, totaling $4.5 million. Without a pension, a sustainable withdrawal rate might be about 3 percent, producing roughly $135,000 per year, which could represent a significant lifestyle reduction for high earners. A $120,000 annual pension beginning in 2026 with cost-of-living adjustments that could reach $170,000 provides a reliable income foundation and makes early retirement far more sustainable.

Read at 24/7 Wall St.