They have $3M invested and 2 kids headed to college — retiring at 60 could still be within reach

The average net worth for someone in their 50s in the United States is $1,364,050, while the median net worth is $180,227, according to Empower (1). The average is driven up by wealthy Americans, while the median reflects the fact that many people in their 50s are still far from rich.

But what if you’re at the higher end of the scale?

Must Read

Say that Joe is 56 and his wife, Anna, is 54, and they have $3 million invested. They also have two kids starting college, but are considering retiring when Joe turns 60 anyway. They want to know if that’s feasible given their investment balance. So, is leaving the workforce an option?

How is the money invested?

The specifics of how their money is invested matter a whole lot.

If Joe and Anna have $3 million in 401(k) and brokerage accounts, that’s a very different scenario from having $1 million in brokerage accounts, a $1.5 million house, and $500,000 invested in a 529 for college.

If the couple has $3 million in a retirement plan, their investments would provide them with an annual income of $120,000, assuming they follow the 4% rule. If they have $1 million in liquid investments, they’d have a $40K annual income.

How much will the money grow?

Joe and Anna still have four years for their money to grow, so compound growth will do more work for them. Joe and Anna can also keep contributing to their retirement accounts until 60.

Because they’re both over 55, they can contribute not just the standard $24,500 401(k) contribution (2) (as of 2026) but also catch-up contributions totaling an extra $8,000 per year.

If Joe and Anna have their entire $3 million invested, and they each contribute an extra $32,500 over the next four years, they’ll end up with around $3.88 million by the time Joe is 60, according to investment calculations (3). That would bring the available annual income from their investments to $155,200 at a safe withdrawal rate.

Read More: BlackRock warns buying and holding the S&P 500 isn’t enough for retirement anymore — here’s why

What’s the plan for college?

Of course, the elephant in the room is the cost of college education for their children.

The average cost of a four-year public school (4) for an in-state student was $11,950 in the 2025-26 school year, while the average cost of a private nonprofit four-year school was $45,000.

Tuition is only going up, so it will likely be higher when Joe and Anna’s kids start school. If Joe and Anna foot the bill for a four-year private school they’d need to take out at least $360,000 from their retirement plans, not including extra costs like room and board.

If their $3 million drops to $2.64 million because they raid it for college costs, their income would still be a relatively respectable $105,600. But whether that would be enough depends on the couple’s obligations and goals.

Can they cover their costs?

Ultimately, the question of whether Joe and Anna can retire is going to come down to their spending.

Many people could live comfortably if their investments produced between $105,600 and $155,200 per year. In fact, the median income (5) for all households in the U.S. was around $83,730 in 2024.

But whether Joe and Anna can will be determined based on their lifestyle. They must make sure they can pay their bills from investment income at a safe withdrawal rate. And they’ll need to do that for a few years without Social Security, as they can’t claim until at least 62 (and ideally won’t claim until much later to avoid shrinking benefits).

When deciding if they can make the budget work, they must consider:

• Taxes: If their money is in a Roth account and their distributions are qualified, this won’t be an issue. If not, they’ll owe taxes on distributions, and their income will likely exceed the threshold at which Social Security benefits become taxable.

• Read moreWhat do rising airfares mean for cruise?

  Medical care costs: Retiring at 60 means leaving work five years before Medicare eligibility begins. They’ll need to buy coverage on the individual market or potentially keep COBRA coverage through an employer for as long as possible (typically 18 months after retiring). Either way, costs are significantly higher without an employer to subsidize premiums.

If Anna and Joe are confident they can afford their costs, including any contributions they want to make toward college, retiring at 60 in their position certainly seems possible. It just depends whether they want to prioritize early retirement or lavish spending in their later years.

You May Also Like

Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

Empower (1); Internal Revenue Service (2); Investor.gov (3); College Board (4); U.S. Census Bureau (5)

This article originally appeared on Moneywise.com under the title: They have $3M invested and 2 kids headed to college — retiring at 60 could still be within reach

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.