Retirement Plans on Hold

[Reader Lou]

I've been reading for a while, and I guess it's time to jump in. My husband and I are in our late 50s. We had hoped for him to retire in a couple of years, but with the stinky economy, we're not sure. He works as an engineer for a large corporation and makes a little over 100K. I've worked from time to time, but usually have had to leave jobs when we've been transferred. Retirement looks like this, I think. About $800K in his 401K in various funds that have all lost tons of $$ lately, of course. Also, I have an inheritance of about $800K invested with Edward Jones in a balanced portfolio. It also has lost $$. My brother and I own a farm together that we hope to sell sometime in the next ten years so that we can CLEAR somewhere near $1million each. We'd like to retire somewhere in the north where the weather isn't sticky like here in the south. We have two sons who we'd like to leave nice inheritances to. (They're good kids and have never caused us a minute's worry.) We have 529 accounts for our two grandkids. Personally, I don't think my husband will be happy in retirement unless he's busy. He loves woodworking and makes furniture so I hope he can do something with that. I'm an artist. Any thoughts for us In advance, thank you!

[rs0460a]

Welcome to the board.

While you will receive a lot of "input" on others if you should retire now, or shortly in the future, I must ask you when will be the "right time" for you?

Why I ask this is that you could retire on an "up year" (as I did last year) and suddenly the market drops (as it has, this year).

Knowing what I know now, early last year, would I have continued working?

The simple answer is NO! Assuming you have a plan that works for you (including accounting for down periods) any downward change in the marketplace should not keep you from retiring (or cause you loss of sleep).

What does that mean? It means that you have to come up with a plan that you can live with, regardless of the situation.

For me, it meant converting a portion of my portfolio to cash to allow me to live, regardless of the market for a few years (number of years is up to you).

It also meant converting a portion of my portfolio to a Single Payment Immediate Annuity (SIPA). As a disclaimer, you will find a lot of folks on this forum that will tell you never to do what I did (but until they pay for my retirement, I'll do my "own thing" ).

You can always look for the "perfect plan". Unfortunately, that means that you will also risk the rest of your life persuing something that is highly unlikely.

All you can do is plan prudently (based upon your personal "risk level"), create a plan, and execute the plan.

Your future? Well, that's up to you !!!

- Ron

[Moemg]

Welcome, Maybe you should track your expenses so you know when retirement is doable .

[Coach]

Lou, since you have a couple of years to go, there's a reasonable chance that the stock market will recover nicely by the time you're ready to retire -- so don't be too discouraged by what you see today.

It sounds like you could easily be sitting at $3M in a few years. By rule of thumb that would support you in a $120K a year lifestyle in retirement, and you would still probably leave the sons a big bundle.

If you haven't yet, spend a little time with FIRECalc -- there's a link at the bottom of this page.

You're in a financial position many would envy.

Coach