Spouse Older - Retiring Together or Separate

[tbis]

Hi all, first post here (great forum btw). So my DW is 63, and I am 55. She will be retiring next year as her position will be eliminated at megacorp (and she is ready).

Financially, we have no debt (house and cars are paid off, kids are grown, etc.), and about 16X expenses in savings (does not include home).

When I run FIRECALC and my Fidelity retirement calculator the "soonest" I can retire (at current expenses) is probably 60 or 61 (note: assumes our decent SS benefits)...at which point my wife will be almost 70.

Obviously, I've been aware of our age differences for well, the entire time - LOL! I am, however, now even more keenly aware that we will be enjoying a lot less of retirement "together" depending on how long I wait....minimally, it will likely mean enjoying a lot less of the HEALTHY years together. DW already had one bout with cancer (fine now), but...

Anyway, my question to you folks is would you just ride out the plan to try to get to current expense levels or (perhaps knowing what you know now), or would you reduce your standard of living and try to make it happen earlier.

I know this is really only something I can decide, but am interested in your perspectives as I'm sure some of you have "been there" (admittedly, the age delta is usually reversed).

Thanks - tbis

 

[38Chevy454]

Welcome to the forum. It's all a matter of your budget, and what sources of income you have. I assume SS is available for your wife. Any other income like pension? Take your budget (fixed and discretionary together) and figure out how much you need. Determine what you need to withdraw from savings. Don't forget taxes and health insurance in the budget. If the numbers work, you can retire. If not, then you may need to work more. How much more is again dependent on your budget. The good thing is you have no debt, so total budget needs are lower.

The 16x number is means that you are facing a potential approx 6% withdrawal rate. Which is a little steep for long term. But with her SS and your SS in future, plus any other income sources outside of savings, you might be OK with an initial withdrawal rate around 6%, assuming it will be reduced once additional income becomes available.

 

[skyking1]

Is it possible to move to a lower cost of living (LCOL) area without impacting your lifestyles? It is one way to reduce expenses.

 

[tbis]

Moving is possible, but probably not materially far away as our extended families, kids, etc. are all in the immediate area (tough to leave them!). Realistically, I think 57 is the soonest I would pull the trigger just to get DW to Medicare.

Fortunately, our incomes have been similar enough that our SS benefits are also very similar (mine is about $200/mo more at any given same age point). As an aside, opensocialsecurity.com's recommendation is she draw at 70 with me at 62.

 

[ivinsfan]

"at current expenses".... we don't know if thay are 50K or 200K...is there any room for trimming without feeling squeezed? Go over them with a fine tooth comb, if you want to share that's your call.

 

[tbis]

Current expenses, including taxes, are $165K (actually closer to $138K this past "covid" year, but I consider that an anomaly) - . No pensions. Just savings and SS. There is room for trimming, but it is stuff like vacations...which, of course, we had hoped to enjoy in retirement.

My question is as much about making the standard of living sacrifice for TIME together...I've certainly read the time>money mantra here on the forum often enough...although typically posted by folks with plenty of the latter!

 

[RetiredHappy]

Have you idenitifed discretionary expenses and what they amount to? If you can trim that amount, does it bring your savings to closer to say 20 to 25 times your expenses? If you have a large discretionary spending, you may have more leeway to make retirement work for both of you.

We retired at the same time because my husband wanted to be done... I was only 53. I turned my IRA into deferred income annuities to ensure that we have another source of guaranteed income when I turn 60. I felt that we had not saved enough but we could make do. We do spend quite a bit more than most retirees. For now, we have not had to cut back on our lifestyle and spend more now than when we were working. If we need to cut back, we will.

 

[ivinsfan]

Current expenses, including taxes, are $165K (actually closer to $138K this past "covid" year, but I consider that an anomaly) - . No pensions. Just savings and SS. There is room for trimming, but it is stuff like vacations...which, of course, we had hoped to enjoy in retirement.

My question is as much about making the standard of living sacrifice for TIME together...I've certainly read the time>money mantra here on the forum often enough...although typically posted by folks with plenty of the latter!

Your last paragraph isn't true..plenty of money means different things to different people..



If you say you can't cut expenses then you need to keep working. It's one or the other. Post more specific numbers if you can stand the heat

 

[RetireeRobert]

OP, what about some combination of:
1) "modest" trim of planned spending levels
2) you continue to work to age 58 or 59, rather than 60 or 61
3) pursue some part-time work after age 58 or 59 with enough free time to enjoy some vacations and travel.

 

[tmm99]

We're in a similar situation as you. I've retired already and am telling my spouse to go part-time now or start a hobby job that's more flexible. Our expenses are low.

 

[chris2008]

We retired at age 55 and 61, 8 years ago.
Best decision ever and some health challenges show that future is never predictable. We won't get into better shape than now.

So far we live off DH's pension and savings.
We have decided to let my pension grow till I am 65,5.
But: we had taken notes of our spending since decades and were confident that regular expenses could be met from DH's pension alone.
It worked out fine so far.

I'd recommend to go through your financial data with a fine comb and in writing, maybe try to live for a year on your projected future income + 4% of savings with you still working and get a feeling for it.

Then jump and enjoy!

 

[pacergal]

Well, based on what you wrote, you either need to work until the money is there, or you need to really check your expenses to cut the costs to meet the income you would have next year when you wife retires, if you wish to retire at the same time.
What do yo want to do?

If you feel comfortable sharing your savings/budget/expenses, many folks here are willing to review and offer suggestions.

 

[tbis]

I appreciate the advise all and clearly my next step is to flag my mandatory vs. discretionary expenses. Indeed, the definitions for what is REALLY mandatory vs. discretionary is where the rubber will meet the road. Is "tree trimming" by a TREE SERVICE mandatory...or do I buy a chainsaw/ladder/rope and do it myself? That's a bit more extreme example, but you get the idea...one man's mandatory could be another's discretionary.

Certainly, the mandatory includes the usual suspects:

- Income/capital gains Taxes (virtually every dollar we get will be taxable..ugh, wish I had pursued Roths years ago at some level)
- Property taxes (no income tax here in Texas, but property taxes are brutal)
- Tithing (not mandatory for many, but we willingly do it)
- Home maintenance (even though I do a lot, but not all)
- Auto maintenance (done mostly by me)
- Insurance (life, home, auto, health, etc.)
- Utilities

It never ceases to amaze me at how much a "paid off" house costs.

You get the idea...time to tackle that discretionary list!

I'm also seeing this isn't binary (i.e. split the difference, maybe live on "less" the first few years and then start drawing more a bit later, etc.). Really appreciate the feedback so far.

 

[ivinsfan]

OP quit stalling and show us your numbers... Yes I'm yanking your chain but if you want real feedback that's what you need. We'll help you tackle it. Or you want to stay at work that's fine too.



Your tree trimming example in nothing if not disingenuous... how much do you spend on tree trimming a year?

 

[RetiredHappy]

I appreciate the advise all and clearly my next step is to flag my mandatory vs. discretionary expenses. Indeed, the definitions for what is REALLY mandatory vs. discretionary is where the rubber will meet the road. Is "tree trimming" by a TREE SERVICE mandatory...or do I buy a chainsaw/ladder/rope and do it myself? That's a bit more extreme example, but you get the idea...one man's mandatory could be another's discretionary.

Certainly, the mandatory includes the usual suspects:

- Income/capital gains Taxes (virtually every dollar we get will be taxable..ugh, wish I had pursued Roths years ago at some level)
- Property taxes (no income tax here in Texas, but property taxes are brutal)
- Tithing (not mandatory for many, but we willingly do it)
- Home maintenance (even though I do a lot, but not all)
- Auto maintenance (done mostly by me)
- Insurance (life, home, auto, health, etc.)
- Utilities

It never ceases to amaze me at how much a "paid off" house costs.

You get the idea...time to tackle that discretionary list!

I'm also seeing this isn't binary (i.e. split the difference, maybe live on "less" the first few years and then start drawing more a bit later, etc.). Really appreciate the feedback so far.

For us, everything is mandatory except for 2 items which we consider discretionary although we are not ready to give up on either one, yet. The 2 items are travel - we travel about 3 months a year, and our country club golf membership and golfing alot when we travel to golf destinations. We dine out alot but much less than we were working, and we consider that mandatory in our books.

 

[Bamaman]

Like you say, Texas is tough on property taxes, but otherwise is not a high COL place.

It sounds as if you are into the country club life and into that much of your travel is to golfing vacations. Dining out a lot is mandatory to maintaining your lifestyle.

My wife and I live in ultra low cost of living Alabama. We have a Robert Trent Jones yacht and country club within eyesight of our home, however we are not members. We have two Robert Trent Jones public courses on our street that we can play reasonably. And they're as good of golf courses as there are anywhere. We eat out, not dine. And even then it's just about once per week. We love to cook.

We find that bottom line travel is $250 a night--paying close attention to what we eat and where we stay. I'd hate to think how much 3 months a year away from home would add up to. Our friends rent condo's on the Gulf Coast, but we go to Europe for 2 weeks for the same spent. (And we're leaving in 10 days.)

I'm sorry, but your lifestyle may not allow you to fully retire without substantially reducing your cost of living. And many people just don't have that much change in them.

 

[RetiredHappy]

Like you say, Texas is tough on property taxes, but otherwise is not a high COL place.

It sounds as if you are into the country club life and into that much of your travel is to golfing vacations. Dining out a lot is mandatory to maintaining your lifestyle.

My wife and I live in ultra low cost of living Alabama. We have a Robert Trent Jones yacht and country club within eyesight of our home, however we are not members. We have two Robert Trent Jones public courses on our street that we can play reasonably. And they're as good of golf courses as there are anywhere. We eat out, not dine. And even then it's just about once per week. We love to cook.

We find that bottom line travel is $250 a night--paying close attention to what we eat and where we stay. I'd hate to think how much 3 months a year away from home would add up to. Our friends rent condo's on the Gulf Coast, but we go to Europe for 2 weeks for the same spent. (And we're leaving in 10 days.)

I'm sorry, but your lifestyle may not allow you to fully retire without substantially reducing your cost of living. And many people just don't have that much change in them.

You are probably referring to me and not the OP. We are fully retired.

 

[Cricky]

I appreciate the advise all and clearly my next step is to flag my mandatory vs. discretionary expenses. Indeed, the definitions for what is REALLY mandatory vs. discretionary is where the rubber will meet the road. Is "tree trimming" by a TREE SERVICE mandatory...or do I buy a chainsaw/ladder/rope and do it myself? That's a bit more extreme example, but you get the idea...one man's mandatory could be another's discretionary.

…

It never ceases to amaze me at how much a "paid off" house costs.

You get the idea...time to tackle that discretionary list!

I'm also seeing this isn't binary (i.e. split the difference, maybe live on "less" the first few years and then start drawing more a bit later, etc.). Really appreciate the feedback so far.

I live on about .75 acre of hilly forest in the northern (but ITP) suburbs of Atlanta; in the last 15 years we’ve spent maybe $6k total on tree work (I hire it all out). It’s an inconsequential expense. Since it’s the example that comes to your mind, I wonder if your house and property aren’t pretty big. You don’t actually have to move to Alabama; could you downsize locally and both reduce expenses and convert some of your existing home equity into spendable funds?

Personally, I’d be reluctant to plan to spend less in my 60s. These are probably the healthiest years we have left. But we spend our discretionary funds on travel (when we can). Maybe it doesn’t matter if your discretionary spending is on more sedentary pursuits.

Anyway, I feel like I should answer your basic question. We were not willing to trade an earlier retirement for a decrease in our standard of living; our cash flow in retirement is greater than it was when we were both employed (but my spouse and I are the same age; we may not feel the press of time quite the same way you do). However, like almost everyone on an early retirement board, we wouldn’t trade years of retirement for the benefits working longer would provide. I’d love to have that condo in Honolulu (and Luzern for that matter) but not nearly enough to keep at it to save a couple million more. So we stay with my family when we go to Hawaii.

 

[Bigdawg]

Current expenses, including taxes, are $165K (actually closer to $138K this past "covid" year, but I consider that an anomaly) - . No pensions. Just savings and SS. There is room for trimming, but it is stuff like vacations...which, of course, we had hoped to enjoy in retirement.

You say you have zero debt and spend $165K/yr. Wow! I have a big mortgage, one car payment (@ 0%), go on mutiple vacations per year (Just got back from a week of SCUBA in Roatan) and only spend $135K. W/o a mortgage and car payment we would have an additional $45k in our pockets each year. Can't even imagine 165 with no debt.

 

[Teacher Terry]

With the age difference I would definitely cut some of the fat and both retire so you can enjoy time together.

 

[daylatedollarshort]

Current expenses, including taxes, are $165K (actually closer to $138K this past "covid" year, but I consider that an anomaly) - . No pensions. Just savings and SS. There is room for trimming, but it is stuff like vacations...which, of course, we had hoped to enjoy in retirement.

My question is as much about making the standard of living sacrifice for TIME together...I've certainly read the time>money mantra here on the forum often enough...although typically posted by folks with plenty of the latter!

We used to spend more than that in a year and were able to trim things significantly without changing our basic lifestyle just by going through the budget and optimizing every expense. We still live in a very high cost of living area and go out often (non pandemic times), we just got smarter about our spending, like changing where we grocery shop and lowering the cable bill. Hundreds of little changes like that added up to huge savings off our annual run rate. We had kids on the payroll at the time who are on their own and employed now, but we still cut a lot just by not having to work and paying closer attention to expenses.



In hindsight I wish we had done that sooner and retired earlier, but I'm glad we at least paid more attention to expenses and retired in our fifties. We found it helpful to compare our budget to Consumer Expenditure Survey and see what areas might be ripe for optimizing - Consumer Expenditure Surveys Tables (CEX) (bls.gov)

 

[Katsmeow]

Financially, we have no debt (house and cars are paid off, kids are grown, etc.), and about 16X expenses in savings (does not include home).

Are the expenses before or after SS? That is, if you and your wife had your expected SS (perhaps estimate a bit conservatively) what kind of Withdrawal rate would you need? Have you checked FireCalc?

FWIW, DH retired at 62 when I was 55. What I did was move to a very part time role at my employer (mostly working from home) which I did for several years before fully retiring. That worked for us.

Also, since then our spending is far less now than it was before we retired. We drive less so less car maintenance, we don't need office clothes, dine out less. Kids are now grown and out of the house so those expenses are less. We also downsized to a smaller house. The house itself was not less expensive but the maintenance is less. Property taxes are less (in Texas, have our 65 exemption which helps). Lots of things.

 

[Starsky]

Anyway, my question to you folks is would you just ride out the plan to try to get to current expense levels or (perhaps knowing what you know now), or would you reduce your standard of living and try to make it happen earlier.

At 16x $165K, you obviously have enough to make it work if you are willing to make some minor adjustments; and you have a couple of years before DW retires. I would definitely choose option 2, reducing expenses and making it happen earlier rather than you working beyond her retirement.

Socking some extra money away while you're working now that the kids are gone might help you feel more prepared when the time comes. If you're here, you know earlier is better!

 

[old medic]

Is "tree trimming" by a TREE SERVICE mandatory...or do I buy a chainsaw/ladder/rope and do it myself?

Well dont forget to add the hospital bill, and associated expenses ... I had the ropes, climbing gear, (never use a ladder) chainsaws and experience..... the $1000 I saved became a $2500 co-pay in a second. Plus out of work a month and a half. And I was very lucky not to actually break anything.

We are the opposite, she is 5 years younger, I'm retiring the end of December at 58, And I worked 3.5 years more than I needed. She will reach FRA at 60, but seriously considering taking it earlier so we can enjoy more life together... But our current get by expenses are 1/5 yours.

Good luck on your choice...

 

[Gumby]

Only you can know what you value the most. I'm quite happy for other people to spend as much as they want on whatever they want. But if that spending level precludes a sustainable retirement, then choices need to be made. Either work longer and save more or figure out where and how to cut expenses. I know that's easy for me to say, but I think it is an unavoidable decision. There is no magic shortcut.