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This is a question impossible to answer with any accuracy due to the limited info you've given and the very large number of moving variables. I'm not trying to be evasive, but having done this stuff for a living many years ago, I can say the decision making here are complex. But here's some of the more important starting points.

Health care: If you deferred the Part B premium due to coverage by your group health plan, you'll have to include this and other coverage as a new household expense. Otherwise, as you're over 65 you don't have to fuss with obamacare coverage. This has made the decision making much easier

Household income requirement.

Begin by taking your total household income from work. That's the gross total, or box 5 of your last year's W2 form, assuming all/almost all household income comes from the one employer.

From this subtract the following (use annual figures or estimates):

- contributions to your retirement plan at work and to your IRA if applicable
- contributions to an HSA, FSA or employer health plan, if applicable
- FICA tax withheld
- Federal and state Income Tax withholdings
- Any other allotments you might have that you will no longer be paying (dues, charitables, etc)
- The reduction in auto insurance premiums if you commute by car
- Cost of dry cleanings or work clothes
- Professional fees or dues you no longer plan on continuing

Then add to this amount expenses you'll have because you are retired
- Medicare part B premium if this has been deferred due to coverage by employer plan
- A Medicare part D and Medigap policies premiums....or....Medicare Advantage plan premium if they have been deferred while covered by your employer plan
- Healthclub, golf or other recreational memberships you plan on
- Monthly loan costs for RV or Boat
- Hobby expenses
- Travel
- Season tickets to whatever

Divide this number by 12 and multiply by 1.10 (increase by 10%). This will be your monthly income need

Compare this to your expected income from Social Security and your pension. If these are not sufficient and you have retirement plan savings, then figure out what % of that you'll need to withdraw each year to meet household income need. If this exceeds 6-8%, you'll likely have a retirement funding problem, unless you do other things like downsize your home or shed other income consuming assets.

If you do not have Fed/State tax withheld from SS or Pension, you'll have to pay quarterly estimated tax payments. Depending on your Fed and State tax brackets, this will usually come out to be somewhere between 10% and 20% for most retired households.

Are you handy in Excel? It'll help if you are :-)

BruceM
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