Reply to How much to retire in late 50's?

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[quote=Anonymous][quote=Anonymous][quote]To the PP in my situation, what's your plan? How to fund, what income do you require for spending? The Fidelity calculator says we run out of money in our 90's, if we live that long. So not it's not just me being anxious. My assumptions do account for a couple of new cars in our future and health care, LTC. I can mess with the market performance expectations and make it work, or lower the life expectancies, or ignore that the ACA exchanges price health care in the 25,000 - 40,000+ range (for PPO).[/quote]

This is the PP in your situation.  Honestly, after reviewing this thread and talking late into the night, DH and I reevaluated our situation and decided to work at least 5 more years.  He'll be 60 then, which will mean only 2 years to Social Security (because he'll be taking it at 62) and only 5 years to Medicare.  Social Security benefits will be $2,068/month for him at 62, which would cover his out-of-pocket medical insurance until he's 65.

I have a history of cancer--only 3 years out from diagnosis--and the long-term prognosis for me isn't great, so I want to balance the reality of needing enough money for retirement with the acknowledgment that I'm not going to last to 90.  If/when the cancer returns, I can take disability payments immediately, and then a year later, I qualify for Medicare based on my health condition regardless of my age.  Thus, a lowered life expectancy for me helps make our retirement plan appear healthier (ha!).  Obviously, that's not a plan you can (or would want) to follow!

As for income we require for spending, I've come to realize how much we rely on not having to worry about money.  When we met with a financial planner, he wanted to know where all our money went.  I feel we live pretty simply--mortgage is paid off on a 60-year-old house in Prince George's County, our van has over 200,000 miles on it, kids went to state schools and had academic scholarships, etc.--but we like to eat out a lot, and we enjoy vacations a few times a year.  I thought we'd be in good shape when we paid off our mortgage, but now we help pay for my MIL's housing expenses, and youngest DD is still in college at $40K/year, and so on and so forth.  Add to that a host of home improvements (e.g., roof replacement), including an upcoming renovation to prepare for aging in place, and our income is clearly slipping through our fingers.  I thought we had a healthy savings, but the planner said we should have quite a bit more based on what we make.

I think the only reason I became excited to retire early is because my sister & her DH are retiring (they're in their early sixties), and I got the retirement bug!  DH and I are going to begin keeping an eye on our spending, which we've never really done in the past 15 years or so, and we'll be more aggressive with our cash savings (e.g., invest in CDs or higher-interest accounts).  In short, we're going to put the brakes on & enjoy the fact that we have money coming in--because the thought of not having that cushion has become more of a concern than retiring early.

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Thanks for sharing your story PP.  OP here.  First of all, I wish you good health in the future.  Health issues definitely put things in perspective. Of course you are reminded that every day is precious, but also, you realize how important health insurance is.  My dad, who lives out of state, incurred over $800,000 in health care charges so far this year.  Fortunately, he is on Medicare and supplemental insurance, so he pays something like $5000 of this.  But looking at those kinds of costs, we cannot take the risk of being insurance less.

Apart from the cancer and your potential qualification  for Medicare/disability, we could be financial "twins."   We have also been blessed enough to forego budgeting for the most part, but not well off enough to be financial independent quite yet.  In fact, apart from the grueling, soul crushing nature of DH's job, I'm not a big proponent of early retirement.  If you enjoy your jobs, you are young enough to be productive earners for quite a few more years.  I'm not averse to going back to work either.  I imagine how you feel about your work is an important consideration, especially with health concerns.

We do have some health risks looming, but we're trying to monitor and manage those.  For me, that means lots of medical tests; DH needs to slow down and smell the roses to improve his chances of enjoying life and retirement. Truth be told, he has too much to contribute to really retire, but he's been so depressed, we do need to have some sort of "reset."   We also eat out way too much, bad for our health and bank accounts, but a habit we're trying to scale back a little.  Likewise, we do travel a bit, not big trips always, but maybe two weeks in Europe every other year and a couple of domestic trips in the alternate years.  Plus the travel to visit elderly family members has ramped up in the past few years.

You are smart to do the home reno now while you have jobs to help pay for it.  We'd like to do some updates, but I'm too skittish to pay out oodles of money on home improvements now, which would make the chances of retiring early (or partially) more remote.

Ha! Financial planners love to inquire as to what you do with all your money, so they can guilt you into investing more of it with them. That can be a little self serving.  Just got an email from Fidelity today basically laying out that the financial advice they provide should be viewed through the lens of the commissions their advisers get.  Our best savings plan was "auto" saving for cars, college, weddings, vacations, and retirement.  We never optimized our returns, but we've been debt-free for about 15 years, which is a good feeling. Now we are in the home stretch and we'll have to address an appropriate asset allocation to get enough juice out of the market with not getting caught in an ill-timed recession.  I am not entirely comfortable with doing that on my own, but at least I'm not motivated by commissions.

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