How much would you want saved to retire early? (pension, moving, spouse)

[eliza61nyc]

LOL, feeling the Monday morning blues on a Tuesday...

So I'm seriously considering retiring when I hit 58. If your living expense were $6,000 a month, what would be your comfort zone. the 6K includes everything, soup to nutz. mortgage, insurance, healthcare, kids college tuition and vacation fund.

Would not really want to move so for the foreseeable future, I'm stuck in a High cost of living area (Northeast)

Will have a pension of 2K

throw some numbers at me.....I may pass out but reach for the stars!!

[dothetwist]

If you aren't moving or otherwise changing your expense side of the equation, you need your current living expenses (6,000) minus your pension (2,000), or 4K a month.

Factor in your SS at either age 62 or 65.

[BayAreaHillbilly]

My Ops Def for "early" is anything prior to FRA. For me that is 67 (unless there is further bait and switch before then). "Very early" would be prior to 65. "Extremely early" would be prior to 62.

For the "extremely early" case I would want to have at least 2M per person.

For the "very early case" I would want to have at least 1.75 per person.

For the "early" case, 1.5M per.

Why such an uplift? Because we are in a serious earning phase now! I am modelling this assuming we can continue that. Of course that naively assumes no involuntary early retirement.

[Hefe]

$6K x 12 = $72K/yr; 58yo to 95yo = 37 yrs; 72K x 37 = $2,664,000

Obviously a quick & crude figure that ignores pension, social security, inflation, future health expenses, relocation, etc..... but a place to start?

[hurricane harry]

A $200,000 annuity will produce $1000 a month for life at 58

[Vision67]

OP: If you retire at 58, your health insurance plan is???

If you need to buy an individual policy, there is no way to accurately predict the cost. Medicare starts at 65.

Keep running that hamster wheel.

[ABQ2015]

Assuming you can collect at least $20K in Social Security starting at age 62, I'd estimate $1.25M. This is based on the need for another $50K a year for 4 years from age 58 to age 62. Then you will need about $30K a year from age 62 up plus some extra for unexpected expenses and to compensate if your pension does not have a COLA. At a 3% conservative withdrawal rate, that requires $1M. Could require less if you are married and spouse will also collect Social Security. I'm assuming that you included federal and state income tax in your expense estimate.

[brava4]

easy 3-4 mil

[MrRational]

Originally Posted by eliza61nyc

LOL, feeling the Monday morning blues on a Tuesday...
throw some numbers at me.....I may pass out but reach for the stars!!

Exclusive of Health Insurance any OOP Medical expenses and International Travel...
and of course owning the home and car and furniture and all the rest so you're debt free...
you can probably get by just fine on a rather modest amount of annual income.

mortgage, kids college tuition...

If you still have these expenses I'd say you aren't ready yet.

[PartIrish]

eliza61nyc,

You have two important variables nailed down--your monthly expenses and a $2K/month pension. Now you just need to know how much your Social Security will be and when you will elect to start receiving it. At that point, you can think of your retirement "number" as based on two phases. Phase I is the bridge that gets you from pension + investments to Social Security age. Phase II is pension + social security + investments. Once you calculate social security into your formula, the amount you need each month minus pension and social security is what William Bernstein calls "residual living expense." Take that number and multiple by 12 to get an annual amount, then multiple it by 25 to see how much you will need over the period of your retirement.

For example, you indicate that you need $6K/month. Subtracting your pension income, you now need $4K/month. If you eventually receive $1500/month in social security, you are now down to needing $2500/month. Multiple that $2500 x 12 and you get $30K/year. Multiple that number time 25 and you get $750K needed to fund your retirement. Add to that the years you are self-funding social security and that is pretty close to your number.