Can I financially retire when I turn 57?

[NomDeER]

If you take it at 62 and live to 95 then what?

Putting aside the fact that I'm not taking it at 62, the odds of me living to 95 are extremely slim. The majority of people will not live to the breakeven point. Also, I have made sure to not be too reliant on Social Security. I'm basing my decision based on reason and my own situation, including adapting as I have more information or circumstances change. You do you. Or just go with 70 no matter what. You seem to have made up your mind. You also don't seem too interested in researching things.

People with mortgages won’t know if there are unexpected repair costs, Hoa price hike? Property tax increase?

Which I pointed out. Your rent is almost 100% of your housing costs, and rents in general are rising at a higher rate than overall inflation. So, renting creates certain issues for predicting costs. You actually asked about renting and predicting costs. But you don't seem too interested in responses. Again, you seem to have made up your mind. I think I'm done with this thread. Best of luck.

 

[Out of Steam]

More stocks allocation in retirement? Why? That is more risk. I am 47 now.

Mainly to deal with inflation risk, especially during a long retirement. At 3% inflation, prices will double in 25 years, and at 4%, it will take less than 20.

Quoting the Kitces article regarding sequence of returns:

After all, it doesn't really matter if returns average out in the long run if ongoing retirement withdrawals mean there's no money left when the good returns finally arrive!

 

[F.I.R.E User]

Putting aside the fact that I'm not taking it at 62, the odds of me living to 95 are extremely slim. The majority of people will not live to the breakeven point. Also, I have made sure to not be too reliant on Social Security. I'm basing my decision based on reason and my own situation, including adapting as I have more information or circumstances change. You do you. Or just go with 70 no matter what. You seem to have made up your mind. You also don't seem too interested in researching things.


Which I pointed out. Your rent is almost 100% of your housing costs, and rents in general are rising at a higher rate than overall inflation. So, renting creates certain issues for predicting costs. You actually asked about renting and predicting costs. But you don't seem too interested in responses. Again, you seem to have made up your mind. I think I'm done with this thread. Best of luck.

Putting aside the fact that I'm not taking it at 62, the odds of me living to 95 are extremely slim. The majority of people will not live to the breakeven point. Also, I have made sure to not be too reliant on Social Security. I'm basing my decision based on reason and my own situation, including adapting as I have more information or circumstances change. You do you. Or just go with 70 no matter what. You seem to have made up your mind. You also don't seem too interested in researching things.


Which I pointed out. Your rent is almost 100% of your housing costs, and rents in general are rising at a higher rate than overall inflation. So, renting creates certain issues for predicting costs. You actually asked about renting and predicting costs. But you don't seem too interested in responses. Again, you seem to have made up your mind. I think I'm done with this thread. Best of luck.

In my lifetime my rent has never been more than $698 per month.

 

[pb4uski]

... Rule of 55 has always been around. I don’t see a reason why it be dismissed. Maybe I am grandfathered? What about 72t? ...

You need to find out more about what your 401k plan allows for withdrawals. Even if you have the rule of 55, if your 401k plan only allows a single lump sum withdrawal and no partial withdrawals then the rule of 55 avoids the penalty but not the tax and the tax on withdrawing your entire 401k would be so onerous as to make having the rule of 55 worthless. It happens.

 

[F.I.R.E User]

You need to find out more about what your 401k plan allows for withdrawals. Even if you have the rule of 55, if your 401k plan only allows a single lump sum withdrawal and no partial withdrawals then the rule of 55 avoids the penalty but not the tax and the tax on withdrawing your entire 401k would be so onerous as to make having the rule of 55 worthless. It happens.

What about 72t code?

 

[Koolau]

Firecalc can be used for any number of years. Just because the basis of it was the 4% guidance with a 30 year retirement, it will still give various success rates at any number of years of retirement.

Right. It's true that the more years you plan in retirement the less accurate any financial survival predictions will be. Having said that, FIRECalc is very flexible and can guide you with the data you supply - 30 years or some other number.

 

[F.I.R.E User]

Right. It's true that the more years you plan in retirement the less accurate any financial survival predictions will be. Having said that, FIRECalc is very flexible and can guide you with the data you supply - 30 years or some other number.

Is our FireCalc the king of all calcs?

 

[RetiredHappy]

ChatGPT says I should increase to 5% and 6% since I don’t have a legacy to leave. I don’t want to leave much money at the end.

The issue with higher withdrawal rate is that you will run out of money if you live beyond your "planned" end of life.

In our case, the longer we live, the Fidelity retirement planner says the more money we will have. In other words we should not run the risk of running out of money if we were to live until 100.

 

[F.I.R.E User]

The issue with higher withdrawal rate is that you will run out of money if you live beyond your "planned" end of life.

In our case, the longer we live, the Fidelity retirement planner says the more money we will have. In other words we should not run the risk of running out of money if we were to live until 100.

But if I don’t go beyond 4%. I will die with a lot of money?

 

[RetiredHappy]

But if I don’t go beyond 4%. I will die with a lot of money?

Sure. It is called insurance against living/dying in poverty.

 

[Fermion]

Everybody jokes that they want their last check to bounce but I would rather die with a bit of money.

 

[F.I.R.E User]

Sure. It is called insurance against living/dying in poverty.

Is there a middle ground somewhere? I don’t care to leave a legacy. Die with zero book did not help.

 

[F.I.R.E User]

Everybody jokes that they want their last check to bounce but I would rather die with a bit of money.

Yes. Some money is fine but not millions.

 

[RetiredHappy]

Is there a middle ground somewhere? I don’t care to leave a legacy. Die with zero book did not help.

I think that will be called variable withdrawal method. Pull more if your portfolio is up, less when down.

 

[Retired Expat]

OP talks about money received towards the care of his mum, but not about said care and costs. A nice CCRC can be a fortune! Memory care if needed makes it much more! Depending where think $6000 to $10,000 a month. I am sorry but don’t see the plan here. Savings and investing is all good but without the projected costs and expenses mapped out including inflation what do you have?

 

[Dtail]

Is our FireCalc the king of all calcs?

There is no one king of calculaters. Firecalc is one of the more popular ones, especially on this site.
Pralana, Boldin and Fidelity are other popular calculators, but there are many more.

 

[F.I.R.E User]

I think that will be called variable withdrawal method. Pull more if your portfolio is up, less when down.

I wonder if Annuity is a good option for me?

 

[F.I.R.E User]

OP talks about money received towards the care of his mum, but not about said care and costs. A nice CCRC can be a fortune! Memory care if needed makes it much more! Depending where think $6000 to $10,000 a month. I am sorry but don’t see the plan here. Savings and investing is all good but without the projected costs and expenses mapped out including inflation what do you have?

Mom gets max SSI $994 a month.
SNAP: $161.
Insurance food benefits: $181.
$0 premium Medicare/Medicaid. She has no deductible. Everything is 100% covered. She has no assets. If we need to put her in assisted care facility they would be 100% covered by Medicaid too.

 

[F.I.R.E User]

There is no one king of calculaters. Firecalc is one of the more popular ones, especially on this site.
Pralana, Boldin and Fidelity are other popular calculators, but there are many more.

I use multiple calc.

 

[RetiredHappy]

I wonder if Annuity is a good option for me?

First of all, never buy one of those variable annuities, they are pretty much scams, with at least 3% going to commission and fees every year.

Secondly, annuities are good for those who want fixed income or longevity insurance like a QLEC. The returns are very low. If you are afraid of running out of money, you can buy a QLEC (you can look it up) that starts say at 85 years old, which is the lastest age that you are allowed to start with tax deferred money. This is to ensure that you have a steady income stream that is not inflation adjusted, starting at 85 years old or whatever age you choose until end of life. It will be to supplement Social Security income.

I don't think it is a good fit for you to start one when you retire due to returns of about 5% if you buy a fixed period term annuity, say a 10/20-year term. If you buy a single life annuity, you don't really get breakeven for at least about 20 years.

On the other hand, we have large enough retirement investable assets when we retired that I bought 2 fixed period income annuities to supplement our income, to create a pseudo pension for ourselves. It was only about 12% of our investments.

 

[Al18]

You can buy a fixed deferred annuity (MYGA) today from an A rated company for 6 years at 5.40%. The commission is paid by the insurance company, not the buyer. If you deposit $50,000 today, you'll get $68,551 in 6 years. This is very similar to a CD from a bank or credit union, but the rate is much higher (about 3.80% today). Unlike a CD, you can withdraw up to 10% per year penalty free. The only real downside I see is you will pay a 10% penalty to the IRS if you withdraw any money before you are age 59 1/2. At the end of 6 years, you'll get all your money+interest back.

 

[F.I.R.E User]

First of all, never buy one of those variable annuities, they are pretty much scams, with at least 3% going to commission and fees every year.

Secondly, annuities are good for those who want fixed income or longevity insurance like a QLEC. The returns are very low. If you are afraid of running out of money, you can buy a QLEC (you can look it up) that starts say at 85 years old, which is the lastest age that you are allowed to start with tax deferred money. This is to ensure that you have a steady income stream that is not inflation adjusted, starting at 85 years old or whatever age you choose until end of life. It will be to supplement Social Security income.

I don't think it is a good fit for you to start one when you retire due to returns of about 5% if you buy a fixed period term annuity, say a 10/20-year term. If you buy a single life annuity, you don't really get breakeven for at least about 20 years.

On the other hand, we have large enough retirement investable assets when we retired that I bought 2 fixed period income annuities to supplement our income, to create a pseudo pension for ourselves. It was only about 12% of our investments.

I am afraid of running out and having too much at the end of life. I may have to look into QLEC after 85.

 

[RetiredHappy]

I am afraid of running out and having too much at the end of life. I may have to look into QLEC after 85.

QLEC is actually very attractive and say you can buy at 60 or whatever age. Because it is an income deferred annuity, the payout is very high because the funds are allowed to grow for years.

 

[F.I.R.E User]

QLEC is actually very attractive and say you can buy at 60 or whatever age. Because it is an income deferred annuity, the payout is very high because the funds are allowed to grow for years.

What if I get if I get it and change my mind years later?

 

[RetiredHappy]

What if I get if I get it and change my mind years later?

Nope. You can't.