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We met with our Planner tonight and one of the questions for which I asked him to generate a prepared answer was "What will our monthly income be if I retire in January 2020, and in January 2023?
The Good News:
We can retire in January 2020 (I will be age 63-6) with a sufficient financial safety margin to continue increasing our Net Worth until our death.
The Bad News:
He recommends delaying the start of our guaranteed income streams from two of our Annuities until my wife is 65, which would make me age 67-9. This means our income will be less than our expenses for four years, and the Gap would need to be closed by taking money from accumulated savings. Part of me says this should be no big deal, after all that is why we saved for decades. The flip side of my brain says "What, draw off savings starting in month #1?!"
The Good News Part 2:
The amount of money we would need to draw off our investments is less than the projected annual income produced by our savings balance, so our Net worth would continue to climb during those four years, just not as much. For years #5 till death our guaranteed income will exceed our projected expenses.
Decisions:
Retire as planned in at age 63-6 and draw off annual investment income to cover living expenses.
Work until age 67-9 at same job and have investments grow faster.
Retire at age 63-6 and then become a Contract Employer at the same job but earning 2x what I am paid now. Either full-time or half time, (half time would be for same total annual income I am receiving now). No guarantee this is possible but many others do exactly this. Maybe for two of the four years, or all four years, of the Gap period.
Two hours since our meeting but I am leaning toward retiring at the initially planned time, working part-time as a Contract Employee for a two year period. The decision is for my wife and I to make, but I have no need to rush the decision.
I am not sure what reason he suggests delaying drawing annuity income for 4 years. Is it to let the amount grow? If so then a calculation of what if's might be able to set that right or not. I am just kind of confused. If it is SS that he is suggesting you delay that is a correct and just draw down on savings to make that shortfall up. If it is delaying SS then a part time gig is a good idea if you do not want to tap savings or not quite as hard.
these period certain annuities that are used for short term gaps are really just like cd's but from an insurer . they have no mortality credits which is the big advantage of life annuities. they are called annuities in name but they are closer to cd's .you get back your own money and a bit of interest .
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