Hello,
I intermittently lurk here, but recently have found myself coming here more. I think that’s my subconscious telling me I should early retire soon.
People frequently ask whether they can afford to retire. I think that I can afford to retire. The real questions are how much I should plan to spend each year and the related questions of where I would live and what my standard of living would be.
I’ve always lived below my means, so I’m pretty sure I can make it work. I have tracked my expenses for the last couple of years, but that seems to be of limited usefulness. Putting aside the COVID effect, I think my expenses will be different in retirement, but I’m not sure exactly how.
I probably will live in a different city and state, which will impact my expenses depending on where that is. I moved to where I am now because of my job. For a variety of reasons, including health issues, I am considering retiring early and moving to another city and state sooner or later. I want to choose where to live – state, city, and particular home – in part based on what I think I can afford.
Big picture, I’m just not sure how much I should plan to spend each year. I don’t have long term care insurance, so I’m basically self-insured. I’m not sure how to build that into my budgeting. I don’t have a spouse or kids, so I don’t have to worry about leaving money to survivors, but I also don’t want to worry about running out of money before I kick the bucket or not being able to afford care and assistance that I may need. My parents and most of my grandparents did not live to old ages, but you never know.
I am concerned about inflation and sequence of returns risk if I were to retire soon. One of the reasons to retire early is to greatly reduce stress, so I don’t want to spend my retirement living on the edge financially. Although I eventually might want to get a part-time job for fun, I don’t know how likely that is, and I don’t want that to be a financial factor that I consider.
So, I have several questions I would welcome feedback on.
First, how have you budgeted for changing costs at the time you retire, including moving to a new city and spending your time in different ways?
Second, especially for you solo retirees, how have you budgeted for expenses later in life when you might need assistance?
Third, especially for you solo retirees who retired before the traditional retirement age and then moved to a new location, how did you choose your location and how did you meet people and adjust to the new location?
Fourth, and most importantly, how much would you be comfortable spending each year if you were in my position and were retiring soon?
Here are my vitals:
Age 56. No spouse or kids. No debt. Not a homeowner.
I've got $250k in cash.
Of my non-cash funds, about 300k are in bond funds and about 2140k are in stock funds.
So, there's a total of about 2,690k.
The non-cash funds are roughly divided as follows.
Roth- 350k
Non-Roth retirement funds- 1,240k
Non tax-advantaged mutual funds - $850k
If I were to retire soon, I would get about 16k per year in pension (no COLA).
I’d get about 24K per year if I took SS at 62. I’d get about 34k at 67. I will evaluate later on, but I may take SS later than that, partly as a hedge against living longer than anticipated.
Thoughts?
I intermittently lurk here, but recently have found myself coming here more. I think that’s my subconscious telling me I should early retire soon.
People frequently ask whether they can afford to retire. I think that I can afford to retire. The real questions are how much I should plan to spend each year and the related questions of where I would live and what my standard of living would be.
I’ve always lived below my means, so I’m pretty sure I can make it work. I have tracked my expenses for the last couple of years, but that seems to be of limited usefulness. Putting aside the COVID effect, I think my expenses will be different in retirement, but I’m not sure exactly how.
I probably will live in a different city and state, which will impact my expenses depending on where that is. I moved to where I am now because of my job. For a variety of reasons, including health issues, I am considering retiring early and moving to another city and state sooner or later. I want to choose where to live – state, city, and particular home – in part based on what I think I can afford.
Big picture, I’m just not sure how much I should plan to spend each year. I don’t have long term care insurance, so I’m basically self-insured. I’m not sure how to build that into my budgeting. I don’t have a spouse or kids, so I don’t have to worry about leaving money to survivors, but I also don’t want to worry about running out of money before I kick the bucket or not being able to afford care and assistance that I may need. My parents and most of my grandparents did not live to old ages, but you never know.
I am concerned about inflation and sequence of returns risk if I were to retire soon. One of the reasons to retire early is to greatly reduce stress, so I don’t want to spend my retirement living on the edge financially. Although I eventually might want to get a part-time job for fun, I don’t know how likely that is, and I don’t want that to be a financial factor that I consider.
So, I have several questions I would welcome feedback on.
First, how have you budgeted for changing costs at the time you retire, including moving to a new city and spending your time in different ways?
Second, especially for you solo retirees, how have you budgeted for expenses later in life when you might need assistance?
Third, especially for you solo retirees who retired before the traditional retirement age and then moved to a new location, how did you choose your location and how did you meet people and adjust to the new location?
Fourth, and most importantly, how much would you be comfortable spending each year if you were in my position and were retiring soon?
Here are my vitals:
Age 56. No spouse or kids. No debt. Not a homeowner.
I've got $250k in cash.
Of my non-cash funds, about 300k are in bond funds and about 2140k are in stock funds.
So, there's a total of about 2,690k.
The non-cash funds are roughly divided as follows.
Roth- 350k
Non-Roth retirement funds- 1,240k
Non tax-advantaged mutual funds - $850k
If I were to retire soon, I would get about 16k per year in pension (no COLA).
I’d get about 24K per year if I took SS at 62. I’d get about 34k at 67. I will evaluate later on, but I may take SS later than that, partly as a hedge against living longer than anticipated.
Thoughts?