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Thanks to some astute (or lucky) investment decisions I find myself at the age of 57 with a nice pot of money in my retirement accounts. We have no kids and the house is paid off. Present annual income is about $60K.

If I take an early retirement I will get a small pension of about $700/month. I'll get maybe $1200/month from Social Security starting in three years at age 62.

The retirement funds are over $600,000 at the moment. Is that enough to retire on?

Also, my wife thinks I am “too young” to retire at 57. Any opinions on that?

IndyBob
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Thanks to some astute (or lucky) investment decisions I find myself at the age of 57 with a nice pot of money in my
retirement accounts. We have no kids and the house is paid off. Present annual income is about $60K.

If I take an early retirement I will get a small pension of about $700/month. I'll get maybe $1200/month from Social
Security starting in three years at age 62.

The retirement funds are over $600,000 at the moment. Is that enough to retire on?

Also, my wife thinks I am “too young” to retire at 57. Any opinions on that?


You can take 4% to 5% out of your 600,000. That's 24,000 to 30,000. Don't forget medical insurance.

See http://home.earthlink.net/~intercst/reindex.html for more info.

Note a link is on the site that takes you back to the Fool and another board on early retirement.
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<<<If I take an early retirement I will get a small pension of about $700/month. I'll get maybe $1200/month from Social Security starting in three years at age 62.>>>

Combined with your 600k retirement fund, which would give you about 30k/yr, you'll be "living" off of $3200/month for awile and then up to $4400/month. Your biggest fear isn't is that enough now, but is that enough 20-30 years from now. Due to inflation, that $4400 buying power could be down to $2000 when you're 75-80 and in no position to work.

<<<Also, my wife thinks I am “too young” to retire at 57. Any opinions on that?>>>

Personally, I'll never "retire" because I love doing what I do. However, I'll definitely slow down some. Not work as many days per week or what not. Or change from a paying job to a volunteer/charity job. I do have some older friends that have made their hobby their second career. Some have become golf course marshalls on a part time basis so they get all the free golf they want. THAT'S what I need to look into.

JLC



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That depends greatly upon what you want to do in your retirement. Do you want to travel the world several times over? You might find yourself hard-pressed to afford that lifestyle. Do you want to go to a part-time work schedule? That might be more manageable.

You should discuss with your wife what you think of when you say "retirement". You should try to have a plan -- it seems like many people who don't have a plan, quit their jobs and then don't know what to do with themselves. Look into the costs and options for health insurance. And run some numbers to see what kind of lifestyle you could afford. It may be that a transition period is the way to go. This could be a one or two year period where you don't work as much (work part-time, take more vacation, or just work less overtime) and start doing some of the things you say you want to do in retirement -- maybe you'll volunteer, travel, whatever you think will make you happy. Then, you'll know whether or not those activities really do make you happy before you give up your position.

Best of Luck,

Teresa

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$600,000 in a GNMA bond fund will return about 39K per year right now. Add your 8.4K pension and you reach about 79% of your current income. In 5 years you will be sitting pretty. Right now it's a close call. Maybe part-time work till SS kicks in? Good luck.
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Thanks for the link to the "Retire Early" home page. There is a lot of interesting material there.

I will spend some time studying it.
IndyBob
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At 1st glance it doesn't look like enough.

$600K over longterm with 75/25 Stock/Income investments has a safe withdrawal rate of 4%. I decided to accept a tad more risk and withdraw at 5%.

5% of 600K is $30K. $700/mo x 12 = $8,400 yr for a total of $38,400 income.

To bring it up to $60K, you'd need twice the amount or $1.2M.

In 5 yrs you'll be 62. At 3% inflation you'll be making about $69.5K. With $700 pension and $1200 SS per month this would be an additional $22,800 per year and that means you'd need about $46.7K per year from your investment. At 5% withdrawal that would require
$934,000.

If you leave your 600K and average 11% per year (which is the average return for the stock market), your nest egg will be $1.01M.

If you can stick around another 5 years, get reasonable return on your 401K, it looks like you'd have a comfortable retirement.

Of course there are a lot of if's but it is not unreasonable to assume this possibility.

BGP

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It sounds like you are a little short-but the key is what you are going to be doing when you retire. many others have done the math and most of them make sense.
I have a similar situation with my wife who thinks I am too young to retire, but we have addressed that over the two years that I have been retired. She works now, likes to work and probably won't quit for 2-3 years. I showed her on paper that we could afford to have her retire now, but she is skeptical. I emphasized that she do what she wants and I do what I want and we should be happy.(the Mars/Venus factor here means that she apparantly doesn't see the same figures I do).
I think the "wife" factor may be your biggest hurdle.
Good Investing!
Mr. Flash
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