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You still have a working spouse and you will still be working part time. I think it is more than semantics to say that's not retired, but it's still just my opinion. I don't see the concerns about whether you have enough saved to stop working. Lots of couples have one primary bread winner.
... and additionally will be supported by their spouse and carried on their healthcare plan! I agree, this sounds more like changing careers ... or becoming a stay-at-home spouse, than "retiring without a cushion."
However, relative to the initial question, someone 51, who actually has no retirement savings or backup plan/cushion (or working spouse with healthcare, or part-time job - sitting or standing), and who is seriously planning to retire in 4-years, with no income, ... seriously needs a 'reality check.'
We retired earlier than we expected (I was 52) and had some small savings and a small deferred compensation account but two good pensions that covered expenses and we lived well within our means. We worked part-time for pocket money and social connections. We used home equity to help with our daughter's college expenses. We found a financial advisor who steered us into some good investments and a modest nest egg developed after we retired. I put off drawing social security until I was 70. At this point I hardly ever touch my savings and have to start mandatory IRA account withdrawls this year.
I'm about as sedentary as they come. I'm a writer and volunteer for a non-profit - working on their web page. I joined a gym but that didn't last. I do Tai Chi on occasion and hike a few miles occasionally.
Not without a nest egg, but I retired recently at 50 (with a substantial nest egg from decades of saving/investing). In my case, spouse loves her job and wants to work another couple of years. We can 100% get by on her one income and not need to draw down the nest egg at all. That said, it’s challenging as a couple to have one person working and winning the bread and another out enjoying retirement each day. At least in your case you’ll be bringing in some income.
I can’t tell you the amount of time I’ve spent digging into every aspect of our finances and understanding the challenges of retiring early. I see a lot of red flags with some of the things you’ve posted:
- you mention your spending is high and won’t be sustainable with one income. This is something you need to have been spending effort to reduce for years prior to retirement. Trying to do this overnight is going to be a shock to the system. And it’s another thing that can strain a relationship, asking a working spouse to make cuts to support your decision to leave a job
- healthcare. The mentions of the possibility of healthcare possibly being “free” in the future really doesn’t factor into retirement planning. You need to plan for worst case scenarios in retirement. If things turn out better for you, that’s wonderful. But you want to plan for healthcare/insurance costs to continue to rise. You want to plan for the ACA just going away and a do nothing Congress not coming up with a replacement.
- speaking of planning, your retirement planning absolutely has to consider the death of a spouse and such. It’s not something you have to spend a lot of time worrying about, but you need to consider the case, run the numbers, and have a plan. Maybe that is life insurance. Maybe it is delaying retirement. Probably it’s both.
- you mentioned spouse has retirement assets that can’t be touched yet. Are you sure? Are you familiar with things like Rule 72c (SEPP) and Roth Conversion Ladders? Heck, even the 10% penalty can be worth paying if you are retiring at a much lower marginal tax rate than when you earned.
Other thoughts:
- get a financial advisor and do a deep dive into your retirement plans.
- thinking you are magically going to get some income producing real estate assets and save the day because you have not saved is not realistic. I’m not saying it can’t be done, as clearly there’s people out there doing it. But it involves time and research and is not just something that you drop in at the start of your retirement.
That income property may be difficult to come by. If you don't have anything saved to purchase it, you have to finance it. Then, you need to have the rent be more than the monthly mortgage payment in order to have a cash stash for problems like a new furnace. You won't be able to count on that as income until the mortgage is paid off and even then you need to keep up a cash stash.
We recently bought an income property, but we were able to cash flow all the costs of getting it repaired and ready for rent. The non-purchase price costs were about double our estimate as we had issues with contractors starting jobs and not finishing them. It cost us more to have someone come in to repair the mistakes and then do the job correctly. Again, we were able to cash flow it all, but we know that we won't really be "making money" for a few years.
Almost all those suggestions are not real possibilities for an older person.
The ACA is the best possibility, but it might hit the pocketbook hard. This is what I did. It was a nightmare. I basically didn't have insurance, while I had this, since almost no doctors would take it.
I don't know what state you live in, but ACA has been a very good option for a lot of people. If one knows or learns how to manage their taxable income, the resulting subsidies can make all the difference and the plan costs can be very affordable. Getting onto a Silver plan introduces additional cost savings. Imagine a health insurance plan where you are paying less than $200/month in premiums with an out-of-pocket deductible of $400/year, prescriptions are $4/month, there are no issues with any pre-existing conditions, there are plenty of doctors and specialists in your health plan, and you don't need to change your existing doctor.
i had an aca plan here in nyc ... i could not wait for medicare . i had a silver plan , no subsidy . it had thousands in deductibles and co-opays as well as at the time ran me 750 a month and covered little until i med the deductibles .
my sister is in arizona . they wanted 1400 a month for her with a 4500 deductible...she ended up going back to work for 35 hours just for coverage
looking at rates today for myself if i was not on medicare they show for a silver plan 7k in premium and 7900 out of pocket
I think it really depends (ACA). My plan in Washington state was much as lottamoxie describes, but now in Ohio....paying the same amount and the plan totally sucks. High deductible, which I won't meet, and covers nothing until then. Waste of money....can't wait to hit 65 and get on Medicare like you! 6 months to go!
There are a myriad of articles talking about the dangers of sitting for more than 30 minutes at a time. Some even say two hour intense workouts can't combat the effects of sitting too long.
Ask the waiters and waitresses here, are they more healthy than the regular desk job people? They are on their feed most of the time.
I have back trouble since my 20s, I never sit that long, I took a walk or talk to people when my computer was running, my computer’s always working. At work I went to the rest room every hour. At one point, I could not sit for 2 hours max before my back started hurting. Yet, I still worked 36 years in a desk job.
Even in retirement, I find reason to move about, I don’t like sitting down more than 1-2 hours.
Yes it does depend on the state, the county and other factors. It's not a perfect system and no one claimed it was. It's quite variable and it's ultimately up to the states to work through the various issues. An individual has control over a few things at their level, which can help make or break their options. I hope the ACA stays intact for the next several years, at least.
I don't know what state you live in, but ACA has been a very good option for a lot of people. If one knows or learns how to manage their taxable income, the resulting subsidies can make all the difference and the plan costs can be very affordable. Getting onto a Silver plan introduces additional cost savings. Imagine a health insurance plan where you are paying less than $200/month in premiums with an out-of-pocket deductible of $400/year, prescriptions are $4/month, there are no issues with any pre-existing conditions, there are plenty of doctors and specialists in your health plan, and you don't need to change your existing doctor.
The point was, ACA may not exist in a few years the way it does now. I don't doubt the subsidies will disappear, and the cats already out of the bag with those high premiums.
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