A recent post on the Bogleheads Forum illuminated a common dilemma for those nearing retirement: deciding whether to retire early.
A 57-year-old user, currently single and living in a low-cost-of-living area with no debt and a paid-off home, is contemplating retirement. With a current net worth of approximately $1.3 million, the user is trying to determine the right time to retire.
Don't Miss:
The average American couple has saved this much money for retirement — How do you compare?
Can you guess how many retire with a $5,000,000 nest egg? – How does it compare to the average?
This billion-dollar fund has invested in the next big real estate boom, here's how you can join for $10.
Financial Overview
The user's financial situation includes:
• $750K in a 457(b) plan
• $275K in a Roth IRA
• $275K in after-tax accounts
• $30K in savings
All investments, except savings, are allocated in a 60/40 portfolio. The user plans to rely on a pension of $65K annually starting at age 60, which includes a 3% cost-of-living adjustment after the first four years. Social Security benefits of $6K annually are expected to begin at age 70.
The current spending is around $60K per year, though the user only spends $40K and is looking to add some extra cash for more enjoyable activities.
Trending: Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." These high-yield real estate notes that pay 7.5% – 9% make earning passive income easier than ever.
Key Concerns:
Health care Costs: The user will need to secure health care through the ACA exchange, estimated to cost about $500 per month.
Daily Activities: The user is uncertain about how to fill the next 30 years and plans to start volunteering while pursuing interests like playing in bands.
Decision to Retire: The user is seeking reassurance about the decision to retire now rather than work another year to slightly improve financial security.
See Also: The number of ‘401(k)' Millionaires is up 43% from last year — Here are three ways to join the club.
The Bogleheads forum responses offered various perspectives and reassurances:
Forum members assured the user that their financial situation is secure enough to support early retirement. The pension, despite its lack of inflation adjustment in the initial years, along with existing investments, should comfortably cover expenses.
Regarding boredom, suggestions ranged from finding fulfilling activities and hobbies to maintaining flexible plans. Volunteering and other hobbies like playing guitar were noted as great ways to stay engaged.
Trending: This billion-dollar fund has invested in the next big real estate boom, here's how you can join for $10.
Several users emphasized that retiring is deeply personal and not purely financial. They advised considering whether the current work is enjoyable or a source of stress. The consensus was that if financial concerns are minimal and personal fulfillment is prioritized, retiring now could be a wise choice.
Overall, the majority agreed that the user is financially prepared to retire and should focus on what will bring personal satisfaction.
Retiring is as much about personal readiness and happiness as it is about finances. As one forum member aptly noted, "The only thing you can't buy is more time, so would you rather spend it working or doing whatever YOU want?"
Read Next:
Want to invest in homes? $100 is enough on this platform that lets you cash out whenever you want.
Can you guess how many Americans successfully retire with $1,000,000 saved? The percentage may shock you.
UNLOCKED: 5 NEW TRADES EVERY WEEK. Click now to get top trade ideas daily, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
This article I'm A Single 57-Year-Old With No Debt, $1.3 Million In Savings, And $65,000 Pension – Can I Retire Early? originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.