Retirement Income and Budget Plans - Critique? Advice? (55, pensions, spouse)
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The Wife and I are considering retiring early next year. We are reasonably healthy, but longevity is a toss up with both of our families. My job was eliminated a year and a half ago and I just don't have the ambition to crawl back into the rat race. Being completely honest.
We have zero debt, a years expenses tucked away and several assets I intend to sell that will generate another years expenses..
Home is paid for and in good order. One child who is financially independent and thriving.
Are we crazy to check out at 62 and do what we want (with our limited income)?
I intend to work a couple three days a week at a pretty lucrative side gig for at least 2-3 years as long as I'm healthy. The spread sheet I used pastes thru a bit funky, but decipherable I believe.
Comments appreciated and Merry Christmas!!
Annual Retirement Income Required $68,568.00
Estimated Social Security, Pension, and Other Income $88,200.00
Annual Variance $19,632.00
AGE
Age Today 61 Years to retirement
Age at Retirement 62
RETIREMENT INCOME SOURCES Weekly Bi-Weekly Monthly Quarterly Annually
Social Security Income $- $- $3,700.00 $- $44,400.00
Company Pensions $- $- $- $-
Rental Income $- $- $1,650.00 $- $19,800.00
Shares/Investments Income $- $- $- $- $-
Annuity Income $- $- $- $- $-
Other Retirement Plans $- $- $2,000.00 $- $24,000.00
SS seems very high. Where did you get that number.
Consider postponing SS if you can. It is like buying a larger lifetime annuity. You can start out without SS and start it at any time so I would at least try postponing.
Couple of comments. Try to estimate your after-tax income, since that’s what you have available to pay your bills. Second, when one of you passes will there be enough income?
There are really three scenarios to consider… both of you alive, just you alive, and just your spouse alive.
When we ran our social security and IRA income thru the tax calculator, it showed about approximately $2K tax burden and I adjusted the rental income to after tax on the budget sheet.. Minimal income tax
The SS and IRA are not earned income and are thus treated differently..
Really the biggest reason we can take retirement early I believe.
I retired at 62 and wife retired at 55 so I obviously don't think you're crazy to retire at 62. Now, we felt we were prepared but didn't guess there would be a global pandemic costing our children their businesses meaning we had to help them resulting in my going back to work for 6 months and the spouse planning to return to work for a bit starting next month.
So it seems OP is financially able to retire and you might find a side hustle making some extra $$ along the way, best of luck.
How much does your side gig pay? Can you save that money plus the rental income to get a bigger cushion/safety net? You said you will have two years if you sell stuff.
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