I am 57 years old and want to retire next year. I will have two definitions of victory pensions that should earn nearly $7,500 per month. I also have $300,000 in 401(k). My wife has 403(b) and the current price is $650,000. Currently, our mortgage is $1,400 per month, and beyond that, there is very little debt. Through an employer-sponsored program, my health insurance premium is $880 per month, and when I hit 60, it dropped to $567 per month. I said I could retire, but my wife said no. She will also be 60 next year. idea?
Prepare to retire
Related: I am 63 years old and plan to retire. I watched in horror as the market stumbled. Will I have enough time to get into my 90s?
Admittedly: $7,500 a month is a lot. However, if you retire next year, pay yourself for 30 years with a fixed income.
Your question is multiple questions remitted to one: You said your two defined pension plans will bring in $7,500 a month, but how long? Are you pulling 4% from these plans or less? How long do you expect to live? Are you in good health? Would you consider private health insurance until your Medicare starts, or would your wife continue to work and provide employer-sponsored health insurance to both of you? Don't you like your job? Can you work part-time? When will your mortgage be paid off?
This is not a decision that should be taken lightly and (b) without guidance from a financial advisor who browses your assets in forensic details. They will ask you what kind of retirement you imagine: vacations, hobbies, income, etc. It's an attractive and exciting prospect. Of course, everyone should have some downtime, and even if not every American can afford to retire, your wife is engaging in caution. She is not trying to deny your wish. She tries to make sure you both have a safe and comfortable financial future.
You might retire for $1 million to choose a comprehensive number, but there is no guarantee that it will last for life. Using the 4% rule (withdrawing 4% of your nests within 30 years each year), you will spend $40,000. According to a recent study by Northwestern Mutual, American adults said on average they would need $1.46 million in retirement, a 15% increase from the $1.27 million reported last year. The “magic number” for people who are saving retired has increased by 53% from the $951,000 target Americans reported in 2020.
As you age, you may encounter unpredictable healthy activities and if you decide to retire early, you should obviously make sure to fully cover before you are 65 years old. According to KFF, the average premium for a single covered health insurance was $8,951 per year last year, while the average premium for household coverage was $25,572 per year in 2024. You may also want to consider long-term care insurance. The cost of long-term care policies is greater, and you get more costs; AARP says a person who waits until $65 to buy such policies pays about $3,135 a year.
Don't miss: Alessandra Malito's Help Me Retirement Column
The Social Security Bureau and AARP offer retirement calculators to try to answer questions about whether you have enough funds to retire. You can enter your assets, estimated retirement expenses, forecast assumptions, and tax estimates. Lifespan is a very unknown factor. According to SSA, average American men who reach 65 years old can expect to live around 82 years old. Research shows that retirement calculators are also useful because they can encourage economically versed people to save more when they see what’s going on in the future.
If you retire at 58, can you postpone the claim for Social Security until you maximize your benefits? Most people - 28.4% of men and 26.5% of women - receive social security when they reach full retirement age, depending on the year one was born. Meanwhile, according to the Social Security Bureau, 8.4% of men and 9.3% of women wait until they are 70 years old or later to receive benefits. If you wait until 70, Social Security will bring huge benefits.
You receive 100% Social Security Benefits on your full retirement age, which is 67 years old for anyone born in 1960 or after, and if you claim at any time when you reach the full retirement age at 62, you have a smaller income. If you wait until you are 70, you will increase by about 8% each year. Some consultants say that whether you start welfare at 62 or at 70, roughly the same job can be achieved - again, depending on your life span. Given the possibility of survivor benefits and spousal benefits, this is a conversation you and your wife can have together.
Research published by the Federal Reserve and Boston University economists suggests that "almost all" workers aged 45 to 62 should wait until they are 65 to attract their social security, and that people born in 1960 or later should stick with it. Like you, people like you, have a full retirement age of 67. Social Security is 67 years old. The insurance against you is much longer than you. Even if you postpone the claim for Social Security, you still need to sign up for Medicare at 65. Part-time jobs can be compromise.
You have made up your mind for a year. Use your time wisely to explore your future financial landscape.
Related: My wife asked for a divorce after 21 years. She wanted to use our savings to buy a house, but guaranteed to help pay for my mortgage.
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