Q: I am a single woman who began saving aggressively for retirement the first chance I got — maxing out my 401(k), investing in individual stocks, waiting until I could pay cash for a reliable used car and carefully considering other purchases before I made them. My income was not great, but it was steady. And I never married or had children. I am now 52. My mortgage can be satisfied by writing a check. The retirement calculator provided by my financial adviser shows I am clear to retire at any time without sacrificing my current standard of living. The calculator assumes a drastically underperforming market and adjusts for inflation. I factored in a sufficient amount for health care, regular vacations, hobbies as well as the necessities such as food, clothing, shelter and transportation. I am desperate to quit and enjoy a work-free lifestyle, but I’m scared to death. Can I actually rely on a computer program to tell me I am safe to retire?

Jane, Minneapolis


A: You’re asking one of the most difficult, nerve-racking questions in personal finance. How much is enough? How do you know if you have enough money and resources to live well as you age? There are so many imponderables to consider.

So, your finances are in good shape. You’re an avid saver. You live frugally. My concern — no matter what the computer program calculates — is you’re still young. You’re only in your early 50s. You face a long work-free retirement, living off your accumulated assets and savings for perhaps another 30 to 40 years. I’m skeptical it’s practical. I do think it’s risky.

I would shift your focus from finances and computer programs to explore different questions: “What do you want to do next?” and “What really matters to you?”

What is it about a work-free life that attracts you? Are there jobs or organizations that would let you engage in the kinds of activities you like, even at the price of a greatly reduced salary? The other day I interviewed a woman who had done well in her career and lived frugally. When she lost her private-sector job she had the savings to take her time to think about what she wanted to do next. She found her cause at a nonprofit. The price tag for meaningful work was a 75 percent pay cut, but she loves what she does. A really good, practical resource for thinking through a major life change is “The Encore Handbook: How to Make a Difference in the Second Half of Life” by Marci Alboher.

I’d consider looking at your finances slightly differently, too. You have the wherewithal to take the equivalent of a personal sabbatical, leaving your job and work behind for several months, maybe a year. Use the time to do some things you’ve always wanted to do but didn’t have the time. But I would also reach out to people who are doing something you admire. Network and explore. Perhaps you’ll end up working part time. You might figure out a way to travel and make some money along the way. Perhaps you’ve always dreamed of starting your own business.

It’s clear to me that you are in a good financial position to make a major life transition, a change that may mean you earn less money. I’ve interviewed a lot of people who have made the shift and most of them found the economics worked because they (and not the bank) owned their home. Yet I’m skeptical that you can stop working altogether.


Chris Farrell is economics editor for “Marketplace Money.” His e-mail is cfarrell@mpr.org.