‘I’m not looking to leave any money to the kids’: We’re in our 60s with $1.5 million in IRAs. Can we retire next year?

‘I’m not looking to leave any money to the kids’: We’re in our 60s with $1.5 million in IRAs. Can we retire next year?

Quentin Fottrell

Sat, December 20, 2025 at 9:26 AM EST

4 min read

“I also have a health-savings account through work with $300,000 to help us with medical expenses.” (Photo subjects are models.) - Getty Images/iStockphoto

Dear Quentin,

I’m 64 and my wife is 65. We have $1.5 million in 401(k)s and IRAs and $90,000 in a Roth IRA. We are looking to retire next year. I will receive $3,000 in a monthly pension that my wife will inherit upon my death. She will receive $2,600 in Social Security, and I am thinking of waiting until 67 when I would get $3,800.

Our current salary combined is $210,000. We have 2 homes with a primary mortgage of $500,000 at 2.75%. Our other home has a mortgage of $300,000 at 2.75% with a positive cash flow rent of $800 after paying our mortgage payment. We have two challenges: tax optimization and ensuring our money lasts.

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I also have a health-savings account through work with $300,000 to help us with medical expenses. I’m not looking to leave any money to the kids other than at least one of the homes. The properties are worth about $1 million each. What advice can you provide about our plan to retire in 2026?

Now I’m 64

Between your Social Security and pension, you have an income of $112,800 per year guaranteed for life. - MarketWatch illustration

Dear 64,

Congratulations on not leaving any money to your kids! (Aside from one or both of your homes, which is a considerable and generous inheritance.) I’ve said it before and I’ll say it again: Your assets are not your children’s inheritance unless they eventually wind up in their bank account upon your death. Until that happens, it’s your money.

Given your properties, rental income, future Social Security benefits, pension and more than $1.5 million in retirement funds, you are in a very nice place. In fact, between your Social Security and pension, you have an income of $112,800 per year guaranteed for life. And that’s before you dip into your IRA or your annual $9,600 profit on your rental.

If you took 4% a year from your IRA — and you are clearly more than able to take far less than that — you will have another $63,600 a year, bringing your grand total to $176,400. If your withdrawals are controlled, taken with the advice of an accountant, and you avoid withdrawals during a market downturn, then you won’t need to adhere to the 4% rule.

In your favor: (1.) You are not required to rely solely on your IRA. (2.) You have a large HSA with $300,000 to cover decades of healthcare tax-free. (3.) You have rental income that more or less offsets the cost of your housing. (4.) You can increase your cashflow by selling one of your homes. (5.) And you don’t need to worry about leaving money behind.

Story Continues

Required minimum distributions

Your required minimum distributions (RMDs) should be your focus. You are now on track, if you’re not careful, to glide into the 24% and/or 32% tax brackets, which might even be higher than you had during your working years. You also open yourself up to potential Medicare income-related monthly adjustment amount (IRMAA) surcharges.

Your mission, if you choose to accept it, is to avoid falling off that tax cliff into the 32% bracket, and one way of doing that is to start your Roth conversions ASAP (if/when your financial adviser greenlights such a strategy). A typical Roth conversion window is when you retire and before you claim your Social Security.

You do have a rather nice feather in your cap: Your $300,000 Health Savings Account, which you can use strategically during your retirement years. The best part about HSA accounts? Withdrawals are tax-free and don’t impact your Medicare IRMAA, your Social Security tax rate or your other taxable income.

And there is a wind in that feather, working in your favor: time. Under the SECURE Act 2.0: your first RMD for you and your wife will be at age 75. These apply to traditional IRAs and 401(k)s and do not apply to Roth accounts, which were funded with after-tax dollars. At 75, your RMD is that age divided by 24.6, equating to 4.07% of your tax-deferred balance.

Other jobs for your “to-do” list: Estimate your monthly expenditure in retirement and stress test that against your income. Decide whether to claim your Social Security at 67 or wait until you’re 70 (and get roughly 8% a year more). Create a “tax map” with your accountant to estimate your brackets before and after your Social Security and RMDs.

Go forth and retire, and keep your accountant on speed dial.

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Previous columns by Quentin Fottrell:

‘He never asks for anything’: I’m 61 with a $1.5 million 401(k). My girlfriend says I do too much for my son, 28. Is she right?

‘Am I simply the unloved son?’ My mother ghosted me after my father died. Is she stealing his money?

‘We all have economic jitters’: After the Fed cut rates, should my son buy a $600K house?

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