Turned 62 this past August and thinking seriously about retiring

[Mel324]

Greetings. I've been perusing this site over the past couple of days and reading about the members experiences and advice has been a great help.

Short story is, I'm 62, single, two grown children, both parents passed away. My sole debt is $49,000 on a house appraised 5 years ago at $112K.

Social security will be $17.5K/yr. If I wait until 66, it will be $25K/yr. My break even age is about 76.

If I retire end of this year, I have two options as to health care. I could go with the ACA, but I couldn't keep my current doctors. The insurance would be about $300/mo. for what would amount to major medical, but I'm might be having shoulder surgery (I'm pushing for having it by year's end) and would like to keep my current doctors for any complications that might come up in 2016.

COBRA is an option, and offhand, my COBRA might be close to what I would pay on the ACA if I took a distribution from my IRA and paid off my mortgage (too much income for the tax credit subsidy). That would be psychologically attractive, and there would be some savings on the interest ($2,200/yr or so). Other than the shoulder thing, I'm in pretty darn good health.

To pay off my mortgage, I would use the funds from an IRA that is in investments too volatile for my age. They told me that they charge a loading fee for reallocation, if you can believe that.

Between IRA's and cash, I've got about $236K. I would have to get part time employment and draw some amounts from savings depending on how much I would make. I'd need about $8K a year to fund the shortfall to my budget.

I really, really dislike my job and the stress is making enjoyment of life very difficult. Work worries are on my shoulders all the time, whether I am at work or not, or trying to do the things I enjoy. I've tried various coping strategies, but when I think about the things I could be doing with my life that I enjoy, it is making less and less sense to stay in my current situation.

The "golden handcuffs" are an impediment to pulling the trigger. I think "if I can only go one more year." Also getting in my way is the deep feeling that I have no right to seek happiness.

It will be risky to retire and I would be better off financially by waiting. However, the missed opportunities of not retiring now is a big factor for me.

If I retired at 66, I would have about $220K in cash, no mortgage, and $25K in SS income. If I retire now, I will have less income and a significantly less cash cushion, but I could do it. If push comes to shove, a reverse mortgage could get me over any unexpected hump. I'm not planning on leaving anything to my sons if I need it to live.


That's my story. I don't have any specific questions, but thanks for reading, and any comments are welcome. Nice to be a member here.

[W2R]

Hi, Mel324, and welcome to the Early Retirement Forum!

Believe me, I understand your desire to retire at this point. I retired at age 61, and before that my username here was "Want2Retire".

Have you tried living on the income you expect in retirement, or less, just as an experiment? That's always fun to try, and sometimes leads to more retirement savings too.

Part time work is fun for some, but depending on it for income may not be feasible. At some point, many people find that they are no longer able to work at all due to old age. Of course, that could be many years from now.

[MBAustin]

Welcome, Mel!

I agree with W2R that it is critical to know what your expenses are/will be to know if you would be successful. What kind of part-time work would you be looking for? Have you explored options to see how easy it would be to get that and what the pay would be?

Good luck and feel free to post questions as they come up.

[Bestwifeever]

Welcome to the boards! You probably could swing retiring now but you potentially have 30 or 40 years ahead of you. For many of us, enduring the last few years of work was made easier by knowing we were on the cusp of being able to throw in the towel, so when things get tough, just remember that nice nest egg you've been able to accumulate.

Just throwing out a few ideas:

Do you have your actual expenses tracked so you can forecast what they might be in retirement?

Is the $8k shortfall only if you start SS at 62 or is that ongoing?

Can you refinance the balance of your mortgage to 30 years? You would have some flexibility in how much you pay every month (you can always pay more) and your nest egg would stay higher. It probably wouldn't affect any ACA subsidy if you go that route but check it out.

COBRA might be a lot more than you anticipate and will go up every year. ACA will go up too. Even Medicare when you turn 65 will cost you something, for Part B (a little more than $100 a month now) and for a supplement. Consider those future costs too. Some of any COLA in Social Security will probably be eaten up by increases in the Medicare premiums.

[Mel324]

Quote:

Originally Posted by W2R Have you tried living on the income you expect in retirement, or less, just as an experiment? That's always fun to try, and sometimes leads to more retirement savings too. Part time work is fun for some, but depending on it for income may not be feasible. At some point, many people find that they are no longer able to work at all due to old age. Of course, that could be many years from now.

Thank you for the comments. I've been living on less for the past few months. Prior to that, I probably spent $600 a month eating out. No more, and I'm spending about $250/month on food. Very nutritious food, as well.

I also stopped buying "things" on a whim. I used to indulge in a lot of "retail therapy" but that has stopped.

If I do wind up doing the "one more year" thing, it will be a good thing to be frugal, earn what I do, and save more, making it more feasible to retire early.

[Mel324]

Thank you all for your comments and ideas!


What kind of part-time work would you be looking for? Have you explored options to see how easy it would be to get that and what the pay would be?


I'm open to a lot of things, but looking primarily at part time clerical work/office help. I like to think back to jobs I had in the past before I had a "career" and what I enjoyed. I haven't found anything suitable so far, and I'm working on a narrative to explain why I am where I am, and whys of the decisions I made. Truthful of course, but not "Jeez, I was so stressed where I worked I couldn't stand it." Because of your question, I drilled down on it a little more, and if I got a job that paid $10/hour that would be close to getting me over the hump at 20-25 hours a week.

Years ago I had a job repairing and rebuilding audio speakers. I would go back there and do that 20 hours a week right now at the drop of a hat!

Do you have your actual expenses tracked so you can forecast what they might be in retirement?
Yes, and the interesting part is that it seems like almost every other day I go back to it and say "oops, I forgot this and I forgot that."

Is the $8k shortfall only if you start SS at 62 or is that ongoing?
The shortfall is only if I start SS at 62.


For many of us, enduring the last few years of work was made easier by knowing we were on the cusp of being able to throw in the towel, so when things get tough, just remember that nice nest egg you've been able to accumulate.

I'm going to tell myself this every day, several times a day.

[Walt34]

I can't add to what they others have said but here's a link to some questions for you to answer for yourself:

http://www.early-retirement.org/foru...ml#post1399715

[Bamaman]

Whatever you do, go ahead and get the shoulder fixed--if necessary.

And drag out your sick leave as long as the doctor will let you. Shoulders take a long time to rehab under the best of conditions. It's about 1 year until most people get back to 90-100%.

[Sunset]

One consideration is a lot of people say they will get some part-time job, the issue they often forget is that any part-time job that is different means they probably don't have the skills to do or will be paid much less per hour than in their current job.

Once I told DW I'd rather work OMY at my job than go work at Walmart for an extra 7 yrs, because Walmart would not pay me like my current job.

The other issue is delaying SS means much bigger SS per year, with your small savings it looks to me like you would be tempted to take SS as early as possible, thereby resigning yourself to lower income for the rest of time. Have you considered delaying SS to 67/68/69/70 ?

Not sure where you have your IRA, but it certainly does not sound like Vanguard which has incredibly low fees. You can transfer an IRA , check vanguard.com site for a look.

[Mel324]

Quote:

Originally Posted by Sunset Not sure where you have your IRA, but it certainly does not sound like Vanguard which has incredibly low fees. You can transfer an IRA , check vanguard.com site for a look.

My IRA's are at a few places. I just opened one up with Vanguard this year, and I like them. Thrivent (f/k/a Lutheran Brotherhood) is the one with the awful fees.

[Sunset]

Quote:

Originally Posted by Mel324 My IRA's are at a few places. I just opened one up with Vanguard this year, and I like them. Thrivent (f/k/a Lutheran Brotherhood) is the one with the awful fees.

If you are not working at a place, you can transfer your 401K into a vanguard IRA.
Make it a direct transfer, just call vanguard and they would help with it.
I just transferred an IRA to vanguard and it was easy as pie.

[Sasset]

Almost 2 years ago I had an IRA at Thrivent. I just called Vanguard and they did all the work with moving the money to an account there. I now have fees of less than .05% instead of over 1%. This forum is what lead me to do it. I am so glad I did!