Here at Physician on FIRE, I like to help people figure out how they can set themselves up to not only retire early, but to also retire well. Five million dollars should do the trick.
According to DYQDJ, that would put you at about the 98th percentile in terms of U.S. net worth (primary home equity excluded). That’s definitely fatFIRE.
A 55-year old can expect to live an average of 26 (male) to 29 (female) more years, according to the Social Security Administration’s actuarial tables. But you’re above average, right? I’d say you could easily have 3 to 4 decades to enjoy that money.
With $5 Million in retirement savings, you can expect to spend in the range of $150,000 to $200,000 a year using a 3% to 4% safe withdrawal rate (SWR) with a very low likelihood of ever running out of money.
In fact, it’s likely that you’ll have significantly more than $5 Million after a few decades of retirement if you withdraw 4% or less of your money early on and adjust that spend upwards with inflation as time goes on.
The median outcome based on historical returns would be to have $13 to $14 Million after using a 4% SWR plan for 30 years when starting with five million dollars according to Michael Kitces‘ analysis.