Can I Retire at 55 with $1.5M?
Yes, with planning
Yes, but with careful planning. $1.5M at 3.5% withdrawal provides $53k/year. This requires disciplined spending and healthcare cost management during the 55-65 gap years.
Retiring at 55 with $1.5M is achievable for many people, but it requires intentional planning. At this savings level, you'll need to be strategic about healthcare coverage, withdrawal rates, and potentially supplementing with part-time income during the early years. Let's break down exactly what $1.5M can support.
Withdrawal Rate Analysis
How much annual income does this savings level provide at different withdrawal rates?
| Rate | Annual Income | Monthly |
|---|---|---|
| 3% | $45,000 | $3,750 |
| 3.5%Recommended | $52,500 | $4,375 |
| 4% | $60,000 | $5,000 |
Based on 40-year retirement horizon. Lower rates provide more safety margin.
Healthcare: The 55-65 Gap
Healthcare is often the biggest challenge for early retirees. Here's how it affects this savings level:
10-Year Healthcare Cost
$180k - $252k
Percent of Portfolio
12.0% of your $1.5M
Subsidy Status
At $53k/year income, you likely qualify for ACA subsidies, potentially reducing costs significantly.
Consider Barista FIRE
Part-time work with benefits can solve the healthcare gap while supplementing your portfolio.
Barista FIRE CalculatorHow Different Scenarios Affect This Amount
Single person, low-cost area
Viable$1.5M provides $53k/year - comfortable in a low-cost area.
Couple, moderate-cost area
Possible$1.5M stretched between two people means $26k/person/year. May need supplement.
With pension income
EasierEven a modest $20k/year pension reduces your needed withdrawal from $1.5M significantly, making this amount much more comfortable.
High-cost city (NYC, SF)
Difficult$1.5M is challenging in high-cost areas. Consider relocating or geographic arbitrage.
Risk Factors to Consider
Sequence of returns risk: A 30-40% market drop in years 1-5 of retirement could seriously impact your $1.5M long-term.
Healthcare costs: At $1.5M, the $150-200k healthcare gap (55-65) represents 12.0% of your portfolio - significant.
Inflation: $1.5M today won't feel like $1.5M in 20 years. Your withdrawal amount stays flat while costs rise.
No margin for error: Unlike larger portfolios, $1.5M doesn't leave much room for unexpected expenses or market underperformance.
Your Next Steps
Calculate your exact Coast FIRE number with our tool - $1.5M may be enough depending on your age and spending.
Aggressively research healthcare costs in your state - this is your biggest variable.
Consider part-time work for the first few years to reduce portfolio withdrawals during vulnerable early years.
Plan account access: Can you use Rule of 55? Do you have Roth contributions to access?
Model lower spending scenarios - what would $45k/year look like?
Frequently Asked Questions
Is $1.5M enough to retire at 55?
Generally yes, $1.5M can support retirement at 55 for many people. At a safe 3.5% withdrawal rate, you'd have $53k/year. The key factors are your spending level, healthcare costs during the 55-65 gap, and whether you have additional income sources. You'll need to be mindful of expenses but it's achievable.
How long will $1.5M last if I retire at 55?
Using historical market data and the Trinity Study methodology: At 3% withdrawal rate ($45k/year), $1.5M has a 98%+ success rate for 40+ years. At 3.5% ($53k/year), success rate is around 95%. At 4% ($60k/year), success rate drops to around 85-90% for 40-year periods. For retiring at 55, we recommend the 3.5% rate as a balance of sustainability and livability.
What's a safe withdrawal rate for $1.5M at age 55?
For a 40-year retirement starting at 55, we recommend 3.5% withdrawal rate: $53k/year from $1.5M. This is more conservative than the traditional 4% rule (designed for 30-year retirements) and provides better protection against sequence of returns risk and longevity risk. If you have flexibility to reduce spending in down markets, you might consider 3.75%.
Can I retire at 55 with $1.5M and Social Security?
$1.5M plus future Social Security significantly improves your retirement security. However, you can't claim Social Security until 62 at earliest, and claiming at 67-70 maximizes benefits. Strategy: Use your $1.5M to bridge ages 55-67, then add Social Security. If Social Security provides $30k/year at 67, you'd only need $1.5M to cover the gap years and supplement afterward.
Should I continue working or retire now with $1.5M?
With $1.5M, you have options. Consider: Do you enjoy your work? Could you negotiate part-time? What would you do with the time? If work is causing significant stress or health issues, $1.5M provides enough to retire. If you're neutral on work, another 1-2 years of saving provides extra cushion. The "one more year" trap is real though - at $1.5M, you're likely financially ready.