At what age do you plan to retire?

You live larger than I do, and I believe I've been foolish.

Whatever. The dude who has $5 million collected and is still working? Okay, then.

Anything is possible wrote:

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?[/quote]

Flagpole, what is the answer?[/quote]

You will probably hate my answer, but here it is anyway...it depends.

I don't mean that to be flippant. There are just too many variables. I will list some.

1) Say you have a house that is paid for and you live in the SF Bay Area. You bought the house in 1987 for $300,000, and now it is worth $3 million. You could sell that house, buy a $300,000 house or condo in a ton of places in the US and retire easily at age 56 on the proceeds from just the sale of that house. Let's say you only cleared $2 million. Take 4% of that a year, and that's $80,000 per year. A person or a couple can EASILY live a nice retirement on that...if they have no debt, if the kids are out of the house, if they don't have big health issues/costs. I know a person who is in just this situation. He saved and has a 401k too, and he and his wife will also get SS.

2) Let's say you are 56 and have no debt and own your home. You can start taking as much as you want from your 401k at 59.5 with no penalty, and you can get at the contributions before that. Let's say you have $1 million in retirement money. Over the life of your million dollars accumulated, you contributed about $200,000 (give or take), so for 3.5 years you COULD take ~$57,000...that's more than you should take, so let's do 4% and just take $40,000. Can a person or could with NO debt and living in a paid for house live on $40,000 per year? Do note that this particular could can start taking Social Security early age age 62, and assuming they are the same age, that should be another $30,000-$40,000 per year depending on how much they earned...and if one spouse made nothing to little, he/she gets half again what their spouse gets, so if she gets $24,000 because she worked, he gets another $12,000 even though he was a house husband and never worked.

3) Where do you want to live? There are perfectly nice homes in perfectly nice and safe small towns all across American where housing is cheap as are the property taxes.

4) What do you want to do in retirement? If you plan to travel the world frequently, you'd better have more than the average.

5) Let's get to the very low end (and there are frugal stars who can make it happen on even less than what I am about to suggest) - If, at age 56, you had ZERO debt, no kids, a paid for house with property taxes that aren't insane, own a car that works and is paid for, and you live an extremely frugal life, you could get by on $500,000 in a retirement account. Let's say this person earned $90,000 in their final few years, and had a wife who made very little. He will get $24,708 a year at age 62, and his wife will get half again that for a total of $37,062 (used $90,000 for a current 56 year old and what he will get at age 62...SS quick calculator gave the results). So, they have that coming at age 62. If they feel they can live on that, he can spend all of his $500,000 before age 62 if he wants, but that's $83,000, and that's not necessary. If I were to advise in this case, I would suggest he takes 6% of that $500,000 until he's 62. That is $30,000. Assuming market is average, he will still have $500,000 and even a little more than that by age 62, but let's say it was a bad period and he has just $300,000 left. Ok. They take the $37,000 from Social Security and then take 4% a year beginning at age 62 from the $300,000. That's $12,000, so they now have $49,062 per year to live on. That's doable in most areas of the country.

So, I say bare minimum at age 56 to retire if you have zero debt, own a home and a car, no kids around, no costly health issues...$500,000. Again, superstar frugals can do it on less. A million dollars would be better, but honestly, that's not easy street for most. $2 million, and now we're talking, and if you want to have a really nice retirement, $3-$5 million. Beyond that is getting either into high income earners or people who invested early and often and had a good stretch of returns. If you can't make it on $3 million (that's $120,000 per year) with a paid for house, no debt and Social Security to the tune of $30,000 or more by age 62 and even more if you wait a bit, then you've got problems.

I feel like you could have answered this in like 2 pretty short bullets. It doesn’t really “depend” in my book.

You have enough to retire when...

1) Your current and projected annual expense needs (inclusive of all things incl. mortgage if it still exists).

Is less than...

2) You investment income + any other income streams (pensions, SS etc.) AND your investment portfolio is not withdrawn at a rate greater than 3-4% calculated based on the day you retire. 3% being conservative and 4% bing more aggressive. (E.g. you have 1m at retirement you can withdraw 30,000-40.000 annually).

Summary: Deadbeat lives off his wife. Worried about financial security but yet didn’t see a need to work. Dave Ramsey would have ripped you a new one.

highhoppingworm wrote:

I feel like you could have answered this in like 2 pretty short bullets. It doesn’t really “depend” in my book.

You have enough to retire when...

1) Your current and projected annual expense needs (inclusive of all things incl. mortgage if it still exists).

Is less than...

2) You investment income + any other income streams (pensions, SS etc.) AND your investment portfolio is not withdrawn at a rate greater than 3-4% calculated based on the day you retire. 3% being conservative and 4% bing more aggressive. (E.g. you have 1m at retirement you can withdraw 30,000-40.000 annually).

You're not wrong, but Flagpole's detailed answer was a good one as some folks looking for advice need a little more than "Just don't spend more than you have and you'll be fine".

His scenario in example 5 actually describes my situation almost to a T with the addition that I also have a pension that pays 65k/year.

55, nearly 56, spouse is 56 and will retire from the military within 0 to 3 years. Could be this summer (if one dickhead does one thing too stupid... ) but will likely be next summer, with a remote chance of going longer. I love my work and can't quite imagine what I'll do with myself if I'm not working, but at the same time we love spending time together, especially travelling. We've got enough put away, plus a solid defined benefits pension that will kick in on spouse's retirement, to retire comfortably now, but a couple / few years more of me working would put us in a position to retire REALLY comfortably, so I'll probably keep at it for a bit, until the time seems right.

Still working on figuring out a plan, although we've never been much for planning. You only get one shot at this is my point of view, so I've focused more on the journey than its (sudden?) end. Planning puts all the focus on the outcome at the expense of the path taken.

Dear god,

I feel sorry for your patient's. I work 75% and love my job as a PT. I save way more than I spend each month. I will retire at 62 and plan on working 3-4 hours a day because I enjoy what I do. How in the world and why did you become a PT ? perhaps you need to learn to be financially responsible and then you can stop crying.

Precious Roy wrote:

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.

This is a good post.

You factor in the younger wife who will keep working a bit when your retire. I do find it interesting when men retire and their wives keep working, considering there was a time when men usually worked while the wife stayed home. I could not retire before my wife. In fact, I'd like to enable my wife to retire a while before me while I keep working. She is two years younger than me.

The post also considers the future employment changing. We all have to think about that.

Something I left out in the questions for this thread, by retire do people mean stop earning and simply living off of your savings/investments or scaling back but still earning a little something in some form?

I completely stopped earning at age 45.

I’m 38, and my plan is to retire at age 52. That is when my son should be out of college. I hope to be financially independent by age 48-50, but I’ll work little longer until no more dependent.

I want to stay living in Seattle until I retire so should provide me with plenty of opportunities for jobs. With COVID, I do wish to move somewhere farther away with a bigger house, but as soon as I move out of Seattle, I don’t think I could ever afford again to live here, so I think a better plan would be to just live in our small house as long as possible and earn pretty good money until I no longer have to work.

highhoppingworm wrote:

I feel like you could have answered this in like 2 pretty short bullets. It doesn’t really “depend” in my book.

You have enough to retire when...

1) Your current and projected annual expense needs (inclusive of all things incl. mortgage if it still exists).

Is less than...

2) You investment income + any other income streams (pensions, SS etc.) AND your investment portfolio is not withdrawn at a rate greater than 3-4% calculated based on the day you retire. 3% being conservative and 4% bing more aggressive. (E.g. you have 1m at retirement you can withdraw 30,000-40.000 annually).

My response was more interesting. :)

Nice! The pension for you sets you apart from most Americans.

There is no situation where you could retire before your wife? In X-Runner's situation, his wife is 7 years younger. Why should he have to continue working after a certain age, and why should she get to retire early just because HE is of retiring age and she is not?

In my case, my wife and I are the same age, but she took 15 years off to be a stay-at-home mom, and she enjoys her job more than I enjoy mine. She WANTS to work longer than I do. Surely that is the case for a lot of women especially.

Now, if the income from the still-working wife is NEEDED to pay the bills, then I say the husband should perhaps rethink his retirement, but even there I give him lots of exceptions including that maybe that's just what the two of them agreed upon.

"Precious Roy's wife"

Flagpole wrote:

There is no situation where you could retire before your wife?

Yes, in my personal situation I couldn't retire before my wife as long as I was healthy and employable.

She's a teacher is often stressed over the administration and the parents and all of the planning. Teaching the kids is the easy part.

I couldn't be hanging around the couch or be out golfing while she came home after a bad day.

That's just me. I'm not judging others and pointed out the age difference.

65 - have worked almost 40 years (including graduate school).

However, plan to keep consulting/coaching work going for a number of years. Part time, on my terms, and something to do. A little extra income won't hurt.

I'm 49 and will likely retire either at 58 or 62. I could retire at 58, but I will have a kid starting college at that point, and likely won't want to sell our family home and move into my retirement place full time until she is out of college.

But if the market produces even 7-8% returns during that time, or if my wife decides to rejoin the workforce so that we all have MEDICAL COVERAGE, I may pull the trigger at 58.

I will have no challenges finding things to do in retirement - the pandemic has confirmed that for me.

How old are you now? 42

At what age do you plan to retire? 45

Has this age changed for you from your earlier plans and how?

Yes. My target age used to be 50 but I am optimistic that my company will be sold, resulting in me getting enough money to retire on by 45.

If I do retire at 45, I would start my own business, so I don't know if that is officially retiring - but it's different from having a job where I work for someone else.

X-Runner wrote:

Flagpole wrote:

There is no situation where you could retire before your wife?

Yes, in my personal situation I couldn't retire before my wife as long as I was healthy and employable.

She's a teacher is often stressed over the administration and the parents and all of the planning. Teaching the kids is the easy part.

I couldn't be hanging around the couch or be out golfing while she came home after a bad day.

That's just me. I'm not judging others and pointed out the age difference.

Ok. That is a reasonable reply. The only reason I commented was because you wrote this - "I do find it interesting when men retire and their wives keep working, considering there was a time when men usually worked while the wife stayed home."

There are just tons of reasons today why women work longer than their husbands, and there's nothing really interesting about that. We very often don't know the reasons behind why a wife might work longer than a husband. For example, I know a woman whose husband has early onset Alzheimer's. He had to retire early, and she needs to keep working, and longer than she had originally planned. He's still living at home, so if you didn't now their situation, you might be judgey.