‘I feel prepared to leave’: I’ve saved $400,000 for retirement and am considering leaving my job after three decades. Is this possible?

Considering Retirement: A Reader's Dilemma

After inheriting an IRA from my sister-in-law, I made the decision to buy a home in Portsmouth, Virginia. To secure the mortgage, I added my daughter to the property deed. (Photo for illustration purposes only.)

Seeking Retirement Guidance

I am 62 and have dedicated over three decades to the same employer. Now, I feel ready to leave my job behind.

My 401(k) suffered a setback because I couldn’t contribute for a decade due to a poor real estate choice. For the past 11 years, I’ve contributed the maximum, but my balance is still only $227,520. The IRA I inherited fluctuates between $179,000 and $182,000, depending on the market.

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Twelve years ago, I moved in with my father to help him and have not paid rent since. The house has had a reverse mortgage for over two decades, so I don’t expect to inherit anything from it, even though it’s in a desirable part of California.

During this time, I managed to save nearly $80,000. After receiving the IRA, I bought a house in Virginia, with my daughter co-signing to help me qualify for the loan. The mortgage is $1,600 per month, but my daughter, her spouse, and a roommate cover 90% of the payment. Once my father’s affairs are settled, I plan to relocate to Virginia.

I am extremely unhappy at work, despite working remotely. Burnout has taken its toll, and I want to spend more time with my 92-year-old father, whose health is declining. Having worked since I was 18, I qualify for full Social Security, which would pay about $1,900 monthly at this point.

My tentative plan is to use the inherited IRA to support myself for the next three years (since I must withdraw it within 10 years), bridging the gap until I’m eligible for Medicare and possibly delaying Social Security until then.

While my father’s military service provides him with free healthcare, I won’t have that benefit and am aware that unexpected events can happen at any time.

What is your advice?

Signed, Need a New Start

Advice for Need a New Start

Before making any decisions about leaving your job, it’s important to fine-tune your retirement strategy.

Your desire to retire is understandable—spending time with your father is invaluable, and after so many years of work, it’s natural to seek relief from burnout. However, careful planning for your future is essential.

Healthcare and Financial Considerations

Healthcare costs can be significant. While your father benefits from free coverage, most people do not. If you retire before qualifying for Medicare, private insurance could cost upwards of $1,300 per month. The Affordable Care Act’s Marketplace premiums and deductibles are also unpredictable. It’s wise to thoroughly estimate your healthcare expenses before making any moves.

Consider part-time work as a way to earn income and spend more time with your father. Many flexible, remote opportunities exist, though finding a new job in your 60s can be challenging. Assess whether your skills are transferable to part-time roles.

If your current employer offers a 401(k) match, make sure you’re taking advantage of it. If burnout is overwhelming, discuss the possibility of changing roles or responsibilities with your manager.

Increasing your income now allows you to save more, especially if your living expenses remain low. Contributing to a traditional or Roth IRA can provide additional flexibility and tax diversification in retirement.

Although you must withdraw the inherited IRA within 10 years, you don’t have to spend it all immediately—just move the funds out of the original account. Preserving these assets while you’re still able to work can strengthen your financial position later.

It’s impossible to predict the future—you could live well into your 90s or face unexpected events. Many retirees worry about outliving their savings, especially with inflation and emergencies. If your daughter moves out, your housing costs could rise.

Long-term care is another major potential expense. Some studies estimate that nursing home care can cost around $120,000 per year, depending on location and facility. These factors should be part of your financial planning.

Understanding the 4% Rule

Suppose you combine your savings and inherited IRA for a total of $410,000. Using the 4% rule, you’d withdraw about $16,400 in the first year, adjusting for inflation annually. However, this rule is debated—some experts suggest withdrawing less, and it doesn’t account for Social Security or other income sources. It also assumes a 30-year retirement period.

Social Security timing is another key consideration. Claiming at 62 reduces your monthly benefit, while waiting until full retirement age (67 for those born in 1960 or later) ensures you receive the full amount. Delaying even longer increases your benefit by about 8% per year until age 70.

You can also coordinate your withdrawals and Social Security benefits—perhaps withdrawing more from your accounts before claiming Social Security, then reducing withdrawals once benefits begin. Consider how this strategy would affect your overall financial picture and whether you’re comfortable with early withdrawals.

Carefully track your expenses for housing, utilities, transportation, healthcare, and emergencies. Don’t forget to include Medicare premiums, copays, and prescription costs in your calculations.

While some people quit their jobs as soon as they feel ready, you’re in a strong position: you’re still working, healthy, and able to earn and optimize your assets. Lean on your support network to help you create a solid plan. As tempting as it may be to retire immediately, take time to make a thoughtful decision about this major life change.

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