It's not princely living, but if I had that option, I would seriously consider it. Having the freedom to do whatever you want with your own time, without the pressure of a job, sounds amazing. I think if I were in that position, I would end up doing something monetizable anyway, through hobby programming projects, but it would be so great to have the freedom to do it at whatever pace I want, and to get to pick what I work on.
If retiring on 1.1M cash + 600K 401K doesn't seem like enough, then sucking it up and staying at the 500K/year job for 2-5 years more is also an option. Cut down on champagne a bit, delay the yearly car upgrade, and you should easily be able to put away 100K a year.
Yep, I agree. This is my first thought as well. I don't think it necessarily needs dividend stocks either, general stocks should do the trick. My back-of-the-envelope is:
* expected return on investment from US stocks at current valuation [+]: ~6%
* expected inflation rate: ~2%
* expected real return: ~4%
* assumed tax rate: 15%
* annual investment return: (1100000 * 0.04) * (1 - 0.15) = USD $37.4k / year after tax
Assuming you don't have a large family with many dependants or unusually high expenses (medical care, etc) it certainly sounds doable, but perhaps with a dramatic decrease in annual spend for non-essentials (overseas holidays, living in an expensive part of the country, etc).[+] Compared to historical prices, US stocks are currently very highly priced, hence expected real returns (~4%) are lower than historical average real returns (~7%). See e.g. http://www.philosophicaleconomics.com/2018/01/future-u-s-equ...
As stated elsewhere, getting yourself down to spending 37k a year is going to be the hardest part, no matter where you live.
The problem I see, time and time again as a bystander to the financial industry is that people simple aren't saving enough, or what they have saved is overspent at a rate that's unsustainable. If one needs to live off of 24k/80k/200k a year in retirement; then their investments should reflect that.
OP wants to move to a lower COL area. Around here $600k, even if you take the tax + penalty hit for an early withdrawal, buys plenty of house. We're talking 5,000 sq ft on 3-5 acres about 15 minutes outside town if rural living floats your boat.
I'd do it in a heartbeat!
Definitely. Decide how much a modest retirement is, and then hit that goal. If non-city dwelling is something you like, you can live far away from the city very cheaply.
On top of that, I'd try to find ways to cheapen your life now. 500k/y is a lot, and while everything's relative, you could lower your standard of living and put away a ton of money in just a year or two, getting your goals faster.
Agreed that a 600k condo is a poor choice; move to a college town where you can get a single family home for $150k-200k and the property taxes are only ~$2-3k/year. Avoid an HOA.
You can retire at any time if your investment income can support your expenses. Think about those expenses carefully. It is entirely possible for a family of four to live off of ~$30k/year if you receive ACA subsidies, your house is paid off (no housing expense), and you have no outlier expenses.