My situation is not so different from yours. If you assume that your investments are now worth $500K, and you can buy stocks that pay dividends of 4% on average, that’s $20,000 of pre-tax income. Call that $15,000 after-tax.
Even if you got a home for free, you don’t have anything close to enough to retire or semi-retire. If you pay $300K for a home, then you will get that much less in dividend income, maybe $6K a year after tax. It’ll just pay for property tax and basic maintenance costs or HOA fees.
Last year, I had well over a million in dividend-paying stocks, throwing off over $75K a year in pre-tax income. Now, I have… less:) I still have $300K in separate cash funds for a home, and another $200K cash waiting for the right opportunities in more dividend stocks, but I don’t consider myself even close to being able to retire.
My brother-in-law, who is retired, gave me this advice even last year, when I had much more: It’s a lot more expensive than you think to retire. (He’s doing fine, but he knows what it’s like to have lots of time and the desire to travel, play golf, and engage in other amusements, and he knows it costs money.)
Don’t let the nostrums of the financial planners catering to the baby boomers fool you. Assets won’t earn enough in the foreseeable future to let you retire for most of your life for less than the cost of an average home.
My advice is to keep working hard and saving and investing. And only buy a home in the near future when it’s cheap, doesn’t take much of your own cash, and you can get cheap financing at a fixed rate.
