In recent years, the concept of retiring early and taking a sustainable break from the traditional 9-to-5 grind has gained considerable traction.
Many professionals, especially those working in high-stress industries like tech, are increasingly seeking ways to generate passive income through investments, which would enable them to step away from demanding careers. One such individual is a Microsoft software engineer who recently took to Reddit to share his concerns.
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With a $1.1 million portfolio, the engineer is considering either retiring early or a career break but is unsure about his financial position. While his financial picture is robust, with $524,398 in a taxable brokerage account, $393,572 in a 401(k), $51,606 in a high savings account, and $120,400 in a Roth IRA, the investor is concerned about healthcare insurance and whether his portfolio can support his lifestyle.
“I’m fed up with my software engineering gig at Microsoft. Years of grinding have left me drained, even though I’m fully remote on my current team. The work-life balance sucks, and on-call is killing me. I’m debating my next move: early retirement, a career break, or maybe just switching teams/companies. Health insurance is my biggest concern if I step away,” he wrote.
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The engineer also mentioned his expected monthly expenses, which include $3,000 per month: $1,650 for rent in a medium cost-of-living city, $300 on food, $800 on medical insurance, and $250 on other expenses.
He has received plenty of advice, suggestions, and insights in the comments, so let’s analyze those.
Is a $1.1 Million Portfolio Enough for Retirement? Reddit Weights In
Reassess Your Financial Plan and Withdrawal Strategy
Commenters pointed out how important it is to carefully plan withdrawals from the portfolio to ensure stability, with several Redditors pointing out that while the 4% rule is a baseline guideline, it may not be enough for a retirement spanning a few decades.
“If you’re in your 30s or younger, you should consider a sabbatical, pivoting into freelance, or moving to a non-tech company (which is often more relaxed). But I wouldn’t recommend full retirement. You have a bit more than a million, which would technically meet your needs if you were aiming for a 30-year retirement at 4%. But if you’re looking forward to a 40 or 50-year retirement, that can quickly become a 3.25%-3.5% [safe withdrawal rate],” a comment says.
A user pointed out that he doesn’t consider the $1.1 million enough for retirement, and suggested the poster use all the benefits Microsoft offers to its employees.
“I don’t think you are there quite yet financially. Regardless, while you are figuring things out, I would take full advantage of Microsoft’s benefits while you have them. You get free therapy sessions, so find a good therapist to help you manage stress and talk through your plans. Use the unlimited PTO to take days off,” he wrote.
“This is silly. You don’t have enough money. If you don’t like your job, find something else to do,” another comment reads.
Against the majority, one commenter mentioned healthcare insurance, which the poster noted to be concerned about, and said he believes the engineer can safely retire with the $1.1 million he has.
“Healthcare would be way less than $800 on the exchange. You don’t need COBRA. I think the math works even at $3,000 a month. You have close to $1.1 million. At 3-3.5 points [safe withdrawal rate], you should be ok. I say, coast until they let you go, although that might be hard for a lot of people,” he said.
Look Into Alternatives
Several Redditors recommended the investor seek out what other options he has, both in terms of work and investments.
“My Roth is at $142,000 and I've only had it open for three years, and it's all in index funds. But I put away $30,000 a year of after-tax money into it,” a comment says.
Connecting to the comment above, one Redditor mentioned tax-efficient investments, such as Roth conversions, to maximize long-term growth.
“Look into the mega backdoor Roth and Roth conversion ladder. Agree with finding a different team within Microsoft,” he wrote.
A commenter gave a few examples of alternatives he sees the poster has, including moving to a low-cost-of-living country and changing companies.
“Consider wider alternatives before deciding, some examples: Take a year off, travel, or maybe dive into a passion project, or a startup/small biz, consider a low-cost-of-living country, such as Vietnam, and find a well-funded AI startup and get a salary jump as a 3rd or 4th engineer–if you’re working that hard, get some equity in the mix,” the comment says.
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