I was laid off at age 52. I already have $3M saved — can I just retire now, even though I’m years from Social Security and Medicare?

Let’s say, for example, that Joshua was let go from his job at 52. He has $3 million saved, and he’d prefer to simply stop working rather than start the job hunt. However, Joshua isn’t sure whether quitting actually makes sense, especially given how many years he has left until he can claim Social Security and enroll in Medicare.

So, should Joshua quit, or does he have to stick it out a while longer to preserve his financial stability?

It’s all about the spending

While $3 million sounds like a lot of money, the reality is that this number isn’t the only one that matters in determining if Joshua can (or should) retire at 52.

“Three million isn’t the answer,” Niels Buksik, a CFP professional and the founder of ANCHORY, told Moneywise. “Your spending is.”

Haleh Moddasser, a CPA and senior wealth advisor at Hightower Signature Wealth, agreed, explaining to Moneywise that you must make sure your savings can cover expenses, including routine costs, as well as taxes on portfolio earnings, healthcare expenses and home maintenance, which she warned is “typically higher than people assume.”

You must also take rising prices into account, since your investments have to support you for a long time. Moddasser said to anticipate “3% inflation for normal living expenses, on average, and 5% or more on healthcare costs.”

Finally, she cautioned that you can’t forget deductibles, drugs and other out-of-pocket expenses, especially as you won’t have Medicare coverage until age 65. Before that time, Joshua could rely on spousal coverage if his wife has it available through work, or may have to pay for a private health insurance policy on the individual market.

Determine if your income can cover you

Once Joshua has an idea of all of the costs he’d incur if he retires now, he’ll need to make sure his money stretches far enough.

The 4% rule is a strategy that can help you avoid running out of retirement money. It recommends withdrawing 4% of your savings in the first year of retirement. If Joshua took that advice, his $3 million could produce $120,000 in income his first year of retirement and then would rise with inflation each year.

“If you can live on that, retiring is realistic. If you’re used to spending $200,000, it isn’t, yet,” Buksik said. He also stressed the importance of making sure your savings plan can support you for a long time.

“With the progress in medicine, and now AI speeding up healthcare research, I’d plan to age 100 rather than 90,” Buksik said. “That could mean 45 to 50 years of withdrawals.”

Deal with the logistical challenges

Joshua also has more to consider, beyond making sure his savings will cover his spending needs. This includes logistical challenges, like how to access his funds.

Typically, you can’t make withdrawals from your retirement accounts until age 59½ without incurring a penalty, but Joshua has years to go until he reaches the required age. In fact, he’s too young even to qualify for a rule set up for early withdrawals.