I’m 45, have $2,500,000 in savings and want to quit my high-stress job in order to travel — how long can my money last?

Retiring at 45 comes with a lot of extra expenses

The first thing to look at when deciding if you can retire at 45 is what your spending habits will look like. You'd have a lot of costs to consider while living off of your savings.

Since you'd be leaving work two decades before you qualify for Medicare, you'd have to fund private health insurance for many years.

The Kaiser Family Foundation reports that the average annual health insurance premium for single coverage was $8,951 in 2024, so this is a big expense you'll need to incur — especially as prices only tend to increase as you age.

You also have Social Security to think about. Benefits are based on average wages in your 35 highest earning years. If you leave work at 45, you wouldn’t have a 35-year work history.

While you can get benefits after as little as 10 years, they'll be lower if you're factoring in decades of $0 wages when they’re calculated.

Plus, Social Security won't be available until at least 62, so you'll need to support yourself for years without it — and if you collect before your full retirement age, you'll permanently shrink your lifetime benefits.

Finally, consider how your money is invested. If most of it is in tax-advantaged retirement plans, like 401(k) or IRA accounts, you can't access it without a 10% penalty until age 59 and a half, so you have nearly 15 years where you'll need money from another source.

All these factors need to be addressed before you begin to consider how long your money will last.

Scammers are smarter than ever—are you protected?

The average American gets 2 scam calls and 3 scam texts every week. Think you can spot them? AI is making scams harder to detect, and in 2023 alone, Americans lost $12.5B to cybercrime. Don’t be next—learn how to protect yourself now!

Learn more

Strategies for moving forward

If you're still thinking about quitting work early, the next big hurdle is to figure out a safe withdrawal rate. How much can you take from your $2.5 million each year to fund your lifestyle while sticking to a realistic budget?

The traditional 4% rule says to withdraw 4% of your balance in your first year of retirement and continue withdrawing the same amount each year while adjusting for inflation. This approach may keep you from running out of money for around 30 years.

Morningstar experts have since revised that down to 3.7%. Since retiring at 45 means you should aim to preserve your account for around 40 years at a minimum, choosing a more conservative withdrawal rate is key.

Assuming your entire $2.5 million is invested in a balanced, diversified portfolio aimed at funding retirement, a safe withdrawal rate would thus allow you to take out $92,500 per year. You'd have to pay for taxes, insurance and all costs with this money — and remember that you'll probably eventually be coping with a lower Social Security benefit to supplement it.

Now, you may decide this is enough — but you may decide it isn't. Only you can determine what your spending needs are and whether you feel confident attempting to make your money last as long as you do.

If you decide it's not enough, you can always explore downgrading to a less stressful job with more time off instead of giving up your career for good. A compromise could elevate your quality of life now, while ensuring you don't jeopardize your livelihood later.