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Author: Adenovir Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76418  
Subject: Re: Start taking from savings or file for early Date: 6/13/2004 9:19 PM
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Susan,

I don't know any details of your health status, but if you could find some kind of employment that would pay you what SS would give you (at 65.5), then you should probably wait and maximize your SS benefits. If you can't then I don't see much choice but to take the SS now.

From your $250K nest egg you could safely draw $10K/year (about 4% of the principle), assuming that you hold around 75% equities and 25% fixed income (50/50 would probably work too).

I don't think your going to be able to live at the 50-60K/year level that you had been, but if you can build up your nest egg with the severance pay, then you may be able to take out more, basing the annual withdrawal on the 4% rate.

I assume that you are still paying off your mortgage, but you should consider the $100K in equity in your calcuations. If you were to sell your house and add the 100K to your 250, it would allow a $14K safe withdrawal rate. Is owning the house better than the extra 4K/year? You will have to decide based on your circumstances. Depending on where you live, you may be able to own a smaller place for the 100K, freeing you from paying a mortgage or rent.

Good Luck, you have some difficult choices ahead.

Adenovir

P.S. Your post has been cross posted on REHP:

http://fireboards.fool.com/Message.asp?mid=20887076&sort=whole

You may want to check if there are any more good responses there.

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