New on board with retirement question

[Lanie]

It is much to late for us to ER. We are 62 and 68. I wonder if we will ever be able to retire.
In the past have always had jobs that were low paying and no 401's. We raised our family and they are now through school and on their own. In 1990 finally got a decent job and now have about 45K in a 401K plus stocks, bonds, and savings are about 150K. So we have around 200K total. House valued at about 400K and owe 50K on it. Hubby is sick with emphysema and diabetes so he is not able to work. I am total support. His ss is about 14,000 yr and mine is almost 4 years away. It should be about the same. Any good suggestions for me.
Many thanks!

 

[bunny]

Lanie,
I am also new on this board but have been reading it for a lonnnnnnnnnnnng time. I am retired and living on my ss of 1,200 plus working 2 days a week for spending money. My house is paid off so that is not a problem. Anytime I want I can pick up extra work. You don't need a fortune to retire on. I am very happy doing the smalll things in life and enjoying it fully.
Good luck.

 

[Martha]

Lanie, have you put together an expense budget and then tried running programs like FIREcalc to get a rough idea on how much more you need to retire?

What part of the country do you live in? Is downsizing the house an option?

Martha

 

[Lanie]

Martha,
Yes! There will be a definate downsizing. We are in the high cost area of Washington D. C. We will be moving but not sure where at this point. Thinking maybe PA but are looking at many differnet areas.
My plan at this point is to work until 66 and start collecting ss then continue to work at least part time. I am thinking with about 28K in ss and hopefully dividends of around 10K a year. We are currently reinvesting stock dividends and they are still growning at a rate of 7%. I think we will be ok but just wanted some opinions on what we can do to improve the situation or even if we need to. Most say you need at least a mil to retire these days.

 

[John Galt]

Re. "Most say you need at least a mil to retire these days".................

"most" are wrong. That is crap!

JG

 

[Jarhead*]

Martha,
Yes!  There will be a definate downsizing.  We are in the high cost area of Washington D. C.  We will be moving but not sure where at this point.  Thinking maybe PA but are looking at many differnet areas.
My plan at this point is to work until 66 and start collecting ss then continue to work at least part time.  I am thinking with about 28K in ss and hopefully dividends of around 10K a year.  We are currently reinvesting stock dividends and they are still growning at a rate of 7%.  I think we will be ok but just wanted some opinions on what we can do to improve the situation or even if we need to.  Most say you need at least a mil to retire these days.

Lanie: In my opinion, you are in better financial shape then you seem to feel you are.
Nothing in your post about your job being a problem.
If you continue to work until you're 66, and save along the way, you should be in very good shape by then.
Regarding the requirement of "at least a mil to retire these days", that is such a broad statement that it's hard to even comment on it.
If you are 40 years old, with a young family to take care of, I wouldn't want to try it with even a mil.
In your situation, on many different fronts, that is not your case. You've raised your kids, so a lot of the heavy lifting is behind you. (We also don't need to plan for as long as they do. I'm 67
Fact of the matter, with your current $550,000 in assets (including your home), adding Soc Sec. benefits, and Medicare, you already have the l mil covered
I can understand how you feel because of your husbands health, you want to continue to work. (Probably good for mental health).
However, if your job was getting to you, and you were willing to locate to a less expensive area, a pretty good case could be made for being able to bail out now.
Good luck to you, Jarhead

 

[Lanie]

ex-Jarhead, Thanks!
That makes me feel much better. I have heard so much about the mil needed that it had me worried. I was getting concerned that we might never be able to retire.
I also know that we can always do a reverse mtg. or sell the house outright and live off the profits.
All comments are appreciated.
Lanie

 

[John Galt]

Okay Lanie, here's a comment. This is a repeat, but after 2000+ posts I guess it's unavoidable.

The only time my net worth has ever cracked the 500K
barrier was in my first marriage just before I ERed, and
my ex. got half of that. Now, 7 years later we own 2 homes. No debt.
If our other investments went to -0- ( that's right 100%
lost) I would still not need to go back to work. We would sell or lease one home and reverse mortgage the other. That plus 2 SS checks should put us in great shape. Later on with a little luck, there might be a small
inheritance but I'm not counting on it. Worst case
scenario planning is how I make all major financial
decisions.

JG

 

[bow-tie]

Hello Lanie,

Considering you have already told us what your assets are, a helpful next step would be to share what you have in expenses. There are many folks here, already retired, or living off/with their investments, who can use those two pieces of info to give you some great feedback.

 

[Lanie]

Thanks John!

Bow-tie,
My only expenses are a house, car & truck payment and anything associated with them. All total under 1,400 a month. Car & truck will be paid pre retirement. House we are working on and hopefully will be within the next 4 years. Hope this helps. Am hoping at the time of retirement to have no expenses except the usual utilities, etc.

 

[MJ]

Thanks John!

Bow-tie,
My only expenses are a house, car & truck payment and anything associated with them. All total under 1,400 a month. Am hoping at the time of retirement to have no expenses except the usual utilities, etc.

Hi Lanie,

Does the $1,400 include food, clothing, medicine, out of pocket medical & dental, eating out, travel, charity etc.

MJ

 

[yelnad]

I read somewhere (Fortune magazine, maybe??) that PA is the worst state to retire in. Unfortunately, I don't have the data to back that up. Anyone?

 

[wzd]

Lanie -

To get a handle on what your expenses are, I would suggest that you do two things - first, just estimate them based on your current monthly costs. Second, take annual numbers for SS and salary, and then subtract savings and taxes. If you got the money, and did not pay it in taxes, and did not save it, then you spent it. The annual spent number you come up with should match with your expenses calcluation. When (or if) it doesn't, start looking more closely to find out where the difference went.

Post that and what you think you could cut it by and I'm sure you will get some more input. You will also have more of the data you need to put into firecalc, and a higher confidence in that number. It's my opinion that people fool themselves when trying to estimate their expenses - either by over or under estimating, depending on their personality.

And I agree with the posts above - with a paid off home(almost), dual SS, and savings, you don't sound to be in bad shape. Good luck with the rest of your planning and retirement!

 

[Bob_Smith]

Lanie,
I am also new on this board but have been reading it for a lonnnnnnnnnnnng time.  I am retired and living on my ss of 1,200 plus working 2 days a week for spending money.  My house is paid off so that is not a problem.  Anytime I want I can pick up extra work.  You don't need a fortune to retire on.  I am very happy doing the smalll things in life and enjoying it fully.
Good luck.

Bunny, your post is interesting. Can you elaborate? What type of work do you do? How long have you been doing this? Does your SS cover all of your expenses except entertainment? What area of the country do you live in? After all the reading you've done here, do you have any advice for the rest of us? I'm not sure, but you may be the first person posting here who is living off SS and part-time work. I'd be interested in hearing more from you.

 

[haha]

Lanie, I agree with all those who say you are OK. As Jarhead says, many big expenses are behind you. Your husband is on Medicare. I assume you have medical insurance at work, and maybe even have his supplemental covered from your work.

I know that in suburban Washington $400,000 is an everyday house.

One thing that comes to my mind is that you may not have to leave your home, and there may be very good arguments for staying put, if you basically like it there.

If you keep your paid up home, and pay off all debt, should your husband need custodial care, you have a relatively protected asset. Cash is not. I don't know the rules where you live, but you may even be able to get tax abatement, etc. to make it easier to keep your home. Or your kids could help!

Your old friends, family and support system are known and familiar to you. Work opportunities will be easy to come by, should you want or need them. Your doctors and medical support should be at least the equal of anywhere in the world. Since your husband is ill, this alone gives a lot of peace of mind.

Also moving at any age and good health is a stressor. In poor health, and nearing 70 it is even more stressful. Should your husband die and leave you alone, you will be in a more supportive environment if you have stayed where you are.

I live on an island where may people from all around come to retire. Many go right back to wherever they were, or one dies, or they split up. Great system for the realtors, but I have my doubts about it for the homeowners/retirees. At least for some of them.

If I were in your shoes, I would rather work part-time after retirement, and stay put, than fully retire and have to move to a strange environment.

Anyway, you have good social security, and will soon have a paid up home. You might be able to sell one of your vehicles, if not now maybe when you retire from full time work. So my approach would be to go slow, be careful, and make any changes after fully thiniking over all aspects.

Mikey

 

[haha]

Lanie,
I am also new on this board but have been reading it for a lonnnnnnnnnnnng time.  I am retired and living on my ss of 1,200 plus working 2 days a week for spending money.  My house is paid off so that is not a problem.  Anytime I want I can pick up extra work.  You don't need a fortune to retire on.  I am very happy doing the smalll things in life and enjoying it fully.
Good luck.

Bunny, you sound like a real success story. Would you share a little more of your lifestyle? What sort of p.t. job do you have? Do you enjoy it?
Mikey

 

[Lanie]

Thanks to everyone for your responses. There are some really good ideas out there and I will put some of them to use. I feel much more secure then I did when I wrote this.
Thanks again

 

[bunny]

Hello Bob_Smith
Well in answer to your question. I receive 1,440 in ss. I have taxes taken out so I actually get about 1,050 a month. House is paid. I work anywhere from 2 and once in a while 3 days a week depending on the work load. I would say an average of around 12,000 a year. I am a mechanic and have been for over 40 years. I have a truck and the payment is $237.00 a month. Other then that what little food I buy and utilities. I enjoy yard work and spend a lot of time on that. If I travel it is short trips and usually stay with family or friends. Don't do much else just enjoy my home and my life.

 

[Bob_Smith]

Bunny, thanks for the reply. I hope you keep posting here.

 

[renferme]

Quote " read somewhere that Pa is the worst state to retire in".
Don't know why they would say that. Surely not the best, but, I'm drawing a pension and Pa. does not tax pensions.
Also, pensions are not taxed locally either ( I'm referring to the 1% local wage tax). A negative: property taxes are high.
But, if looking for a low cost of living area, I don't think you can beat Florida. FL is not a favorite of mine, but there is no local or state taxes, property taxes are low, housing is still relatively cheap in some areas, certainly at least half of the DC area.

 

[John Galt]

As I recall, Florida has some sort of "intangibles" tax.
I am sure it wouldn't effect me but someone with a
big pile might need to check it out. Otherwise, I agree
with the post. Florida is a pretty low cost state,
especially housing.

JG

 

[Cross]

As I recall, Florida has some sort of "intangibles" tax. I am sure it wouldn't effect me but someone with a big pile might need to check it out. Otherwise, I agree with the post. Florida is a pretty low cost state, especially housing. JG

I've heard of this but it must not amount to very much since FL has been a retirement haven for yrs and I dont know any people from NYC etc that dont have a"pile" who can up and move to FL

 

[JWR1945]

As I recall, Florida has some sort of "intangibles" tax.
I am sure it wouldn't effect me but someone with a
big pile might need to check it out. Otherwise, I agree
with the post. Florida is a pretty low cost state,
especially housing.

JG

The intangibles tax does not apply to retirement accounts. IIRC, money in a bank and in Treasuries are excluded as well. I am not sure about Money Market accounts.

There are minimum (exclusion) amounts as well. I have had to file (by telephone) several times, but not to pay.

Republicans have been trying to get rid of the intangibles tax for years. They have cut it already. It looks as if they are going to get rid of it this time around.

(Maybe it is already gone and no one has told me. I have not received my intangible tax forms yet.)

Have fun.

John R.