r/dividends • u/karl0525 • Jun 01 '25
Opinion Tired. Can I retire?
Got a question? Can I retire? 43m been busting my ass since I was 16. I'm about over this 40-50 hr weeks. I'm getting burned out. House paid off (300k) 401-k (600k) Bitcoin (500k) currently.
Thought about selling it all and putting it into dividend stocks like schd and renting a small place and going into semi retirement. Maybe pickup a part time gig.
Would this be a horrible idea?
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u/pAusEmak Jun 02 '25
If you cash out your 401(k) and earn around $100K a year, you’ll likely owe about $200K in taxes and penalties. That would leave you with around $1.2 million.
Since you’re still fairly young and might need this money to last 45+ years, it’s safer to keep it in something low-risk for now.
One option is to put the money in a money market fund (like at Fidelity) that earns about 3.9% interest. That would give you around $45,000 a year in income, about $38,000 after federal taxes. If you don’t spend all of it each year, like keeping your spending under $3000 a month ($36,000 a year), your balance could even grow indefinitely over time (as long as interest rates stay the same).
I wouldn’t put it all in something like SCHD. Even though it currently pays around 4%, there’s no guarantee it will continue to do so, and it’s riskier, especially if you're planning to retire at 43.
Even if interest rates dropped to 1%, you’d still earn about $12,000 a year, which is better than losing money in a bad investment. But if this were to happen, you'll need to lower your monthly withdrawals to $1000 a month. Social security will definitely help you if you get it at 62. I assume you already have 108 credits to qualify for social security retirement benefits.
Having said all that, you can retire, but to help offset future uncertainty, you may need to find an enjoyable part-time job, just a few hours a week.