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I had an experience a few months ago with a woman that was at a local rotary meeting. She had been retired a number of years. I asked her about the decision. She said she reached a point where she said whatever she had, it was going to have to be enough. The job stress was too much and she retired. She had no regrets. So maybe you need to make the same decision. Whatever you have, go with it.
that could have been me. I could not have handled the job any longer, physically or emotionally. Retired at 64 and on a lot less than what's recommended, and with a mortgage still. But then I live a very simple, boring to some people, life style. No regrets.
Have you carefully tracked your spending for a few years? Ideally you should have a really good idea exactly how much you spend and where it goes.
Funding 2-3 years of health care premiums can get expensive if it isn't subsidized. ACA subsidies are based on modified adjusted gross income. Take a look at the source of the money you'll be living off of until you start SS. See if you can keep the "income" portion of that below the 400% of the federal poverty line, then you can quality for subsidies. That will mean using non-401K/Trad IRA accounts to make up the rest. Alternatively, pull out some money now from those tax-advantaged accounts, paying taxes on it, and then be able to draw lower for the years you need subsidies (you'll want to do the math. you might end up paying more tax than you get subsidized).
Bengen, whose research was behind the 4% rule, now says it is really 4.5% for normal (non-early) retirement. Personally, I wouldn't hesitate to draw 4.5% for a decade at least to fund more travel and such, and cut back later in life. Just be prepared to cut early if the economy has a really bad stretch.
Carefully consider your SS strategy. Do you want to draw both at 65? If one of you made more in their career, it may be smart to delay drawing on that income till 70. That provides a surviving spouse a higher guaranteed income, aka longevity insurance. It might even be worth it to start drawing the other before 65.
Related to the above, carefully consider what happens to one of you if the other one passes.
Taxes are one of those things I've spent a lot of time looking at and figuring out how to best optimize my retirement for. The MFJ standard deduction, harvesting gains in brokerage accounts, getting the right mix of SS, taxable income from 401Ks, and principal (already paid taxes on years ago) and gains from brokerage accounts play into that. I plan to pay very, very little in taxes for much of my retirement.
I had an experience a few months ago with a woman that was at a local rotary meeting. She had been retired a number of years. I asked her about the decision. She said she reached a point where she said whatever she had, it was going to have to be enough. The job stress was too much and she retired. She had no regrets. So maybe you need to make the same decision. Whatever you have, go with it.
Absolutely true.
I have a very close first cousin, we grew up together and she was a social worker in NYC. by the time she reached 55 she was beyond burnt out. Now she was lucky in that she did/does have a city pension and benefits but seriously it was so stressful that I really think she would have left even if she only had 50 cent to her name. Never ever once have I heard her worry or regret the decision. it's been 6 years.
Anyhoo back on topic.
Op @mi-rodger gave you a great answer. only you know your lifestyle but if you're ready to go. go for it.
medical coverage if you are under 65 is a horror in arizona .. at age 60 my sister got quotes of 1400 a month in north mesa just for her with huge deductibles ..there are few companies selling insurance in her area ... she ended up going back to work for the min hours it takes to get covered at work ... that sucked
No ACA subsidies?
I wonder sometimes how many older people are in the poverty trap that Obamacare created. To be fair, they wouldn't have health insurance at all without it, but it is a (perhaps) unintended consequence of the rules. There's quite an income hockey stick there.
Q. How much is enough??
A. My take is, "whatever you have".
Financial forums are filled with advice from tax savvy investors who a)already have a stack of money and b)are filled with advice for people with a stack of money.
If someone is in the vast majority of people with an average SS payment and an averagish sort of savings, you have what you have. My view is to panic early and set up your life for minimum cash outlay. Move if needed to a lower cost area, downsize houses, chisel away at your expenses (I'm blown away by how much people spend on cable TV and cell services). View being stingy as being your new job. Restaurants produce average food served from the Sysco truck. You probably have enough stuff already. Make sure your health insurance is in order. Get a dog and walk your @ss off instead of going to Hawaii. The world is full of near-free hobbies.
If you die destitute, at least you gave it a good shot.
Most retirees on this forum are fairly affluent, but there are a few of us on the lower rungs.
We retired at 61, and took SS at 62---half of what you project. One quarter of your 401k.
We "unlocked" our lifestyle and changed everything completely: no car, living overseas, no taxes, barely any property tax and very low health care cost. Nice condo on the beach; no mortgage/rent.
We still manage a cruise and a couple other trips a year. So far, it has worked out. We did the numbers and made it work. No kids helps.
Yes, we were burnt out; unable to do our physical jobs anymore, besides the emotional aspect.
Yeah, but the OP said "our combined social security benefit at 65 will be about $4,500/month", so sounded like the plan was to draw both then.
Of course people can do whatever they want.
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