Can I Retire at 55 With $5M?

Is $5M Enough to Retire at 55?

The 4% rule — pioneered by financial planner William Bengen in 1994 and validated by the Trinity Study — suggests withdrawing 4% of your portfolio in Year 1, then adjusting for inflation annually. With $5,000,000, that's $200,000/year or $16,667/month. The average retired household spends $4,065/month (2022 BLS Consumer Expenditure Survey). At this portfolio size, you have a 12,602/month cushion above average expenses.

Withdrawal Rate Comparison

How Long Will It Last?

Retiring at 55 means a 30-year retirement to age 85 (average life expectancy for a 55-year-old is actually higher — about 87 for women, 84 for men). At 4% withdrawals with 7% average investment returns and 3% inflation, a $5M portfolio historically lasts 30+ years in 90%+ of historical market scenarios. The risk: early retirement (pre-60) spans more market cycles.

Social Security Consideration

If you retire at 55, you can claim Social Security as early as 62 (at 70% of full benefit) or delay to 70 (at 124% of full benefit). Delaying to 70 increases your monthly check by 77% vs claiming at 62. For most healthy individuals, delaying maximizes lifetime income — but only if you can fund the gap years from portfolio or other income.