Meet Rachel and Thomas

Rachel (60) and Thomas (61) live in Bend, Oregon—a scenic, fast-growing town nestled in the Cascade Mountains, perfect for biking, paddleboarding, and family hikes. Their lives have been a blend of work, parenting, and a lot of careful planning. Thomas spent 35 years as a product development manager for a regional tech firm, while Rachel worked as a marketing consultant, splitting her time between client projects and raising their daughter, Zoe—who’s now 8 years old.

While most people their age are entering their peak earning years, Rachel and Thomas are doing the opposite: they’ve decided to retire now.

Their reasoning? “We want to be there for Zoe’s childhood—not just her college graduation,” Rachel explains. With $2.5 million saved and no pension, the big question is—can they afford to retire comfortably while still raising a child?

Let’s take a look.

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Family Snapshot

Current Ages: Rachel 60, Thomas 61, Zoe 8
Retirement Timing: Retired now (2025)
Home: Paid off; valued at $650,000 in Bend, OR
Total Retirement Savings: $2.5 million

• $1.5M in traditional IRAs/401(k)s
• $400K in Roth IRAs
• $600K in taxable brokerage

Social Security (at age 67):

• Thomas: $3,200/month
• Rachel: $2,700/month
• Combined: $71,000/year

Healthcare Costs (Pre-Medicare): $25,000/year via ACA plan
Annual Retirement Spending Goal: $115,000 (includes living expenses, child costs, and college savings)
Investment Return Assumption (real): 4% net of inflation

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Can They Retire Comfortably—Even with a Young Child?

1. Retirement Spending (Before Age 67)

They’ll need to support their lifestyle for about 6–7 years before Social Security begins.

Annual need: $115,000
6-Year total drawdown: $115,000 × 6 = $690,000

With a starting portfolio of $2.5M and a 4% real return:

• After 6 years of withdrawals, their portfolio is projected to be ~$2.2M by the time they’re both 67

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2. Social Security Kicks In (Age 67)

When they both reach 67:

• Thomas: $38,400/year
• Rachel: $32,400/year
• Total SS income: $70,800/year

That covers more than half of their $115,000 budget. The remaining $44,200/year comes from their portfolio.

With $2.2 million still invested, their withdrawal rate is just 2%—well below the classic 4% rule. That gives them excellent long-term sustainability.

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3. What About Zoe’s College?

Rachel and Thomas have already saved $80,000 in a 529 plan and plan to add another $5,000/year for the next 8 years.

They’ve budgeted future college costs into their spending projections, and because of their high flexibility in income sources, they can manage college funding without derailing their retirement.

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What Makes Their Plan So Strong?

1. High Savings, Low Fixed Costs – With no mortgage and reasonable living expenses, their burn rate is controlled.
2. Diverse Account Types – Their mix of pre-tax, Roth, and taxable accounts gives them maximum tax flexibility in retirement.
3. Early College Savings – Factoring Zoe’s future early meant no scramble later.
4. Healthcare Planning – They’ve accounted for pre-Medicare expenses using an ACA-subsidized plan until they turn 65.
5. Delayed Social Security – By waiting until 67, they lock in strong guaranteed income, reducing long-term portfolio stress.

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The Verdict: Can They Do It?

Yes—and with room to breathe.

With $2.5 million in diversified savings and smart, forward-looking assumptions, Rachel and Thomas can comfortably raise Zoe, pay for college, and enjoy the retirement lifestyle they want—without a pension, and without running out of money.

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A Peek into Their New Life

On a Tuesday afternoon, Thomas picks Zoe up from art class while Rachel sets up a family bike ride by the river. There are no email alerts, no back-to-back Zoom meetings. Just time. Time they couldn’t buy before—now available because they planned well.

Retirement isn’t just about stepping away from work. For Rachel and Thomas, it’s about showing up—for their daughter, for each other, and for the life they spent decades building.

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Think you can’t retire early with kids still at home? Think again. With intention, strategy, and clear priorities, it might be more achievable than you think.

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