I am in a potential situation that I might retire before my planned date in 2-3 years. I am currently on off-site assignment for work, moved and bought house here. Sold my old house in CA, no family or other ties there beyond my employment. Problem is my off-site assignment may be ending 2 years early. Was hoping to work 2 more years and then retire. My wife also works here and likes living here. She is an RN, so getting a different new job is not concern if she had to move.
My job would have me return to CA. It would only be for shortest time until I could retire and then get out of that high tax and cost of living state. Problem is my wife wants to stay in NM, and for that matter so do I.
I think I could do the early retirement, but not without more concern for long term financial. I am only 50. My wife just turned 61 and could get her SS in 12 months if she wanted, I think about $1250/mo? Need to verify exact amount. I obviously have to wait considerable time for my SS.
One question: If she takes her SS, can I get the spousal benefit? Or do I have to be at least 62 to do that? I could not determine if there is an age requirement for spousal benefit. My SS will be more than hers, so no reversal of spousal benefit advantage.
We have about $400K in after tax investments. About $1M in pre-tax 401k/403b/457 accounts. This year has been very good to increases in accounts
But we also have $230K in current mortgage, however it is at 2.875% so not a real burden. I could get about $1500/mo pension right now, and have some subsidized health ins coverage through the pension. Likely that health ins costs will only go up and become a bigger bite in future.
If I paid off the mortgage, I think we could get by without much sacrifice on $6K/month. My current thought is I would have her work up until her SS kicks in, and I could survive away for the year working in CA. So it puts us at a little under $3K income from my pension and her SS, and would tap the after tax money first to supplement. I would probably pay off the mortgage, the peace of mind with paid off house is comforting and worth it to me once not working.
No kids to put through college or living at home. Just wife and myself with dogs. I am very risk tolerant and have almost all of my investments in stock mutual funds now. Mix of large cap, small cap, international and even some sector specific. It is well diversified, but almost all stock market. I am a bit concerned I should maybe be more conservative.
I do old cars for hobby and can actually make some side cash with that if I had more time at home and less time at work
I also have very small home-based side business related to car hobby that is mostly tax write-off, but allows some money to be generated, less than $500/month right now and foreseeable future.
I have probably $250K of asset value in old cars and other garage stuff that could generate money in a worse case sell off mode. However there is no intention to use that for living expenses.
Both wife and me want to spend more time going away in our motorhome and seeing more of the country. I could live in the motorhome for the year, or just rent something small. No more house purchases in CA. I want to maintain permanent NM residence. Besides weather and good old car scene, rest of CA sucks for me. No desire to be there any longer than I have to.
So the big question and where I am asking for advice and opinion: Would you retire now? Or wait about 12 months from now and have to live apart. Not sure the extra living expenses from being apart would ever be made back up?
If so, what funding plan would be recommended?
What account investment mix should I consider if I am in a distribution mode rather than putting in mode?
Is a fixed percentage withdrawl (ie 4%) or a fixed amount withdrawl better? I am trying to educate myself by reading here and kind of confused on merits of each method. I lean to the fixed amount, as that seems logical and is how we live with a generally constant amount each month.
Thanks for reading all of this and any advice and opinion. Terry