At what age do you plan to retire?

Today’s my birthday and I’m 57. Worked in the grocery business all my life. Took some financial hits in my forties and now I’m behind. Still the goal will be 65. I might have to work a few days a week after that if I want extras but that’s ok. Plan on not working in the grocery business after 65 because it’s just too hard on my body. Will find something else.

Are you willing to move? California is so expensive and just a God-awful place for so many reasons other than the climate. I spent my formative years there but will never return. If you were willing to move to a much cheaper domicile, I’m sure you could still find good employment, work another 10-15 years, max, and then retire or semi-retire. Especially as a minimalist. If the wife isn’t willing to leave CA, well then, she needs to work. Pretty simple. Choices.

Flagpole wrote:

54 now. Will be retired by 56.

While I have enough money right now to retire and enable my wife to retire too, she wants to work until age 60. She's a college professor and makes more than enough to pay our bills just with her income alone, so not really that big of a deal financially for me to retire at any time.

She took 15 years off from the work force to be home with the kids, so she's enjoying her time working again (been back at it for almost 10 years now).

If I find a need to do something after retiring, I might find a job working with dogs. Perhaps do some part-time work at a Kennel/Doggy Day Care or something like that. Dogs are the best.

This is an interesting thread. Having a plan for when to retire is much different than having one for how to retire. I’m not sure many people really know what they’ll want to do in retirement, and it may not be as palatable as simply “evolving” and doing something else for work, part time.

Anyway, you seem to be one of the resident financial advisors on here, & we are roughly the same age, so I’m wondering how much you think is enough to retire on at say, age 56? I know that answer is different for everyone, but I’m assuming home paid off and kids out of college. What is the rough number to be able to retire, assuming a lifespan of 30 years +/- beyond the mid-50s?

I'm 54 now and have hated my job for several years. At my job, we can early retire at 55, so I plan to do so the minute I see this year's bonus payout in my bank account.

I've fortunately lived frugally all my adult life, and have over $5M net worth with no debt.

Wifey makes more money than I do, and plans to keep working several more years, which helps too.

Soon as I can wrote:

I'm 54 now and...

I've fortunately lived frugally all my adult life, and have over $5M net worth with no debt.

That is beautiful. Good work.

GettingFasterDude wrote:

Soon as I can wrote:

I'm 54 now and...

I've fortunately lived frugally all my adult life, and have over $5M net worth with no debt.

That is beautiful. Good work.

Not really. What are you gonna do, take the 5 million with you to your grave while you bragged about saving money and not having any fun your whole life?

Now, I do understand if people want to leave a bit behind for a few family members when they die, but if you work to make money you're not going to use to enjoy life, then what was the point of it? You worked your arse off for nothing because you didn't even use the money. For context, I ain't some broke bum telling you this. I'm worth as much as you are right now and I plan to exponentially increase that while having fun and enjoying life, not waiting for "retirement" to give myself permission to enjoy life. Tomorrow aint guaranteed. We dont make money for no reason. There's no need to hoard cash to your graveside, buddy.

Flagpole, what is the answer?

Why are acting like he's going to drop dead tomorrow? This guy probably has 30 years or so to live, and has 5 million to live off of. I don't see anything wrong with that.

It depends what "frugal" means. Going out to expensive restaurants and paying $100 per meal or spending $25 on a meal? Driving a 2012 Toyota or a 2019 Acura? A $400 per night hotel or a $250 per night hotel? Buying the fanciest shoes and clothing? Or even bringing a salad to work everyday like I did or paying $12 a day for a salad like my colleagues.

coach wrote:

A $400 per night hotel or a $250 per night hotel? Buying the fanciest shoes and clothing?

What about a $100 night room with a free breakfast?

50. Probably need to work until I am 67 to make 401k savings pay off. Wife is seven years younger and will be able to carry things for a few years so that I will not have to tap retirement accounts too heavily until she retires.

My main issue is going to be that the people I work for are going to probably retire in about 7-8 years and may sell their book of business to someone who won't want me around for another 10 years. That may require a big career move in my late 50s, which will be a big challenge.

Anything is possible wrote:

I’m wondering how much you think is enough to retire on at say, age 56? I know that answer is different for everyone, but I’m assuming home paid off and kids out of college. What is the rough number to be able to retire, assuming a lifespan of 30 years +/- beyond the mid-50s?

Agree that the number is different for everyone, but since I am planning to retire this year at 56, maybe you'll find my process and guidelines helpful.

1. Get a firm grip on your current after-tax needs. Your tax situation after retirement is likely to be very different from what it is now -- so focus on your spending, not your income when planning. Don't forget to account for health insurance, especially for the 9 years until Medicare kicks in.

2. Calculate your net worth precisely. Take college costs off the top if that's a commitment you will make, as well as any other one-time expenses that you can foresee.

3. Separate pre-tax and post-tax assets. They are not the same. A dollar in a checking account or personal stock account (principal) is a dollar you can spend. A dollar in a retirement account may be worth 80 cents in spending power (maybe less, maybe more). On the bright side, even your (long-term) taxable assets won't be taxed as heavily as your W-2 income was, since you won't be paying into SS and Medicare anymore -- and you won't be paying into a retirement plan, either. To the extent that you can limit spending from taxable accounts to an amount near/below your deductions, your taxable income could be little or nothing many years. [ Note: for the next 3-4 years, you have to avoid drawing from retirement accounts with penalties for early withdrawals.]

4. Assume 4% return on your investments over time. This is a fairly conservative estimate, but you may want to assume 3% if you are very conservative -- or 5% if you aren't.

5. Calculate what you'll get from Social Security and any pensions you may have. If you don't have a statement handy, you can get all you need here:

If you've been paying in for 30 years or more, you can expect to get close to the maximum for someone at your salary level. If you've been averaging $100K or more for 30 years, you can expect close to 50K/year if you delay SS until age 70, and that comes with cost of living adjustments.

6. Divide your after-tax assets by 25 and your pre-tax assets by 30. Can you live on that amount until you begin taking social security? If so, you can afford to retire without spending down your next egg at all. If not, divide by 20 and 25 and reassess. If that is enough, you are still in quite good shape, but your net worth will go down by about 1%+inflation each year until SS/pension kicks in. If it's still not enough, you can add your SS income into the mix and make a plan for bridging the gap to the age at which you plan to start drawing SS. I'm conservative, so I waited until I met the most stringent standard above, and I am thinking of Social Security as extra money that I will have after age 70 to make up for any shortfalls, investment mishaps, health crises, inflation spikes, etc. Same goes for any inheritance I might get.

To clarify the calculation in #6, can you cover your annual spending with the sum of your after-tax assets/25 + pre-tax assets/30?

Soon as I can wrote:

I'm 54 now and have hated my job for several years. At my job, we can early retire at 55, so I plan to do so the minute I see this year's bonus payout in my bank account.

I've fortunately lived frugally all my adult life, and have over $5M net worth with no debt.

Wifey makes more money than I do, and plans to keep working several more years, which helps too.

I am 62 now and retired at 61, but I spent four years getting fully retired. The reason for that was the nature of my consulting business where project commitments were 4-6 years, and the payments on the backend were low (a lot more paid up front when there was a lot more work to do). It took me four years to wind down the work I committed to.

Anyway, like you I have a high net worth. But for four years my net business income was horrific -- down from $240k per year to less than $15k. Because I was not 59-1/2 when I started closing down the business I looked around for ways to get money out of my IRA and fat 401k to help me get by until I could properly retire.

Here is what I can tell anyone in a similar retire-early but need money situation. I did both of the following prior to "retiring".

You can take money out of an IRA without tax penalties using what the IRS calls a 72(t) distribution. The limitations are that you have to amortize the distribution based on IRS life-expectancy tables. You divided the amount in your IRA by your life expectancy. You can take that amount out annually without penalties, but you have that amount out for five consecutive years (the IRS calls this substantially equal payments, so they amount does not have to be identical ever year).

You can take as much money out of a 401k as you please if you are the custodian. There are no penalties because you as the owner can make up your own retirement requirements, like starting distributions at age 40 if you like. You do not have to be retired to take 401k distributions.

I will add that, I took some $300k out of my IRAs and 401k over a four-year period prior to retiring. My accounts are worth about $400k more than when I stated distributions. The increasing markets are responsible for my staying far ahead of my distributions. That was not expected when I started the process.

From what I can tell this Steve the Addict character made a small amount of money off crypto currency (like low 7 figures) and somehow now things he is incredibly wealthy. Additionally he seems to equate spending money with "having fun" and "living in the moment" both of which are patently ridiculous to anyone who has actually accumulated money via more traditional mechanisms. I wouldn't pay him much credence. 5m and mid 50s for retirement is a very common story right now given the market run-up. I hope that Soon as I can enjoys his retirement and lives it up for as long as his body is able.

You have a house in California. It's gone WAY up in value even just the past two years. You could sell it now, and move to somewhere in southern Arizona, where you can likely pay the house off in cash.

I'm not terribly different than you are, but am planning retirement based largely on my largest investment - my California house.

Stats say that only 8 percent retire at 59 with 1 million invested.

It doesn't surprise me that this thread is full of multi-millionaires who will work forever, but how much money do you need? I've done the math, and we'll have no mortgage, and more money coming in than we've ever had.

The kids are adult. Short of catastrophe, I'll probably be burning cash to get rid of it, and we don't have that much!

Thanks. Yes, my definition of frugal is not blowing money stupidly. I've had plenty of fun while saving, but blowing money on a new BMW every two years, a boat, country club memberships, and expensive hotels/meals aren't my idea of fun. We have 3 cars - all imports - with an average of 140k miles on them. I rarely buy new clothes, and when I do they aren't fancy. I spend more on running clothes and shoes than work clothes. We eat out fairly often (or did pre-pandemic at least), but rarely is the bill for the whole family over $100. Vacations are in beautiful spots but at $200-$250/night VRBOs. I didn't grow up with money, but didn't have a deprived childhood either. So to a large extent, I'm sticking with the pleasures and expenditures I grew up being satisfied with, even though I could afford more if I felt like it.