Hello. . . new here and lots to learn

[Rainy]

Hello everyone,

I am 51 years old, a single parent who raised two kids alone but they are now both on their own.

My employer had an early retirement incentive program recently that I was not set up to take advantage as of yet. Not enough savings and a pension now at only 36% of my income, would have been too low. But it has motivated me to make sure that I use the next 3.5 years to get myself ready for that step.

At 55, my pension will be 60% of income and will include benefits. I have a plan to save at least $1000 each month, thus increasing my savings. That will also accustom me to living within the retirement income budget.

I currently rent, but am planning to purchase a home that has a payment well within the retirement income budget.

I would appreciate any other suggestions on what I could do to be more prepared to retire at 55.

Thank you.

 

[Alan]

Welcome to the site

It sounds like you have a pretty good handle on things, with a target date set to ER with a secure pension and benefits (I assume including health insurance).

I'm sure there will be others along to offer some good advice to you. If you believe you can live on 60% of your income you must have an idea of your expenses. As a start I would suggest you try putting your numbers into Firecalc to see how you are doing. (link is also at bottom of page). As well as retirement expenses, Firecalc is going to need that you know what retirement savings you have, and what your estimated SS benefits and pension income will be.

You can estimate your SS income here. (it allows you to enter a 'stop working' date of 55).

 

[chinaco]

Welcome.


You need to create a complete financial plan. There are many books on the subject.

Here is a book recommendation: "Unveiling the Retirement Myth" by Jim Otar.

You can get it from his web site otar retirement calculator

or through Amazon. It provides a good overview of most popular options.

Depending on your financial background... it can be a little deep. It assumes certain knowledge. But do not let that stop you... you will still learn a lot about creating a retirement plan.

 

[mh]

my suggestion would be to go farther than getting 'accustomed' and actually live within your estimated retirement budget for a year at least, perhaps without the rent/mortgage factored in, and see how you do.

i did it the boneheaded way by making a special checking account for the experiment
and paying my "trial retirement expense" items from there (e.g., everything except rent/mortage). at that point i felt had i a good sanity check on my budget projections.

i didn't try to factor out things like smaller bills for auto, gas, or clothes, etc.. in retirement mode. I figured if that was going to tip the scale of being under/over budget from those expenses, then my budget projection wasn't leaving nearly enough wiggle room anyways.

 

[Rambler]

Make a detailed budget, pick off things that you do out of habit as opposed to doing because you like doing them, and see how your budget changes. Then add the new costs you expect to incur, such as hobbies and travel in retirement, and spoiling the eventual grandkids. Make the way you live match your new retirement budget, and see how it feels. Most of all, figure out what you plan to do in retirement as retiring to nothing can be unsettling unless that is what you truly want. Retirement is a big step and can really be unsettling if you are not prepared, financially and otherwise...

R

 

[obgyn65]

Hello and welcome, Rainy.