As I approach my 60th birthday, I’m weighing the pros and cons of retiring now versus waiting a few more years. With a substantial nest egg of $1.1 million in liquid cash and $880,000 in a 401(k), I’m fortunate to have a solid financial foundation. Additionally, I’ll be eligible for two pensions, which will provide a combined monthly income of approximately $3,500, along with my wife’s pension. We’ve also paid into Social Security, which will add another $5,000 to our monthly income when we reach 65.
However, I’m unsure if I should take the plunge now or continue working to build on my pension. To make an informed decision, I need to consider several factors, including my expenses in retirement, sources of income, and personal feelings about risk.
Estimating my monthly expenses in retirement is crucial, as it will help me determine how much I’ll need to supplement my income with savings. I can start by tracking my current expenses and adjusting for any changes I expect in retirement, such as buying a new car or taking a celebratory vacation.
My guaranteed income sources, including pensions and Social Security, will provide a significant portion of my retirement income. I’ll need to consider how much of my expenses these sources will cover and whether I’ll need to rely on my savings to fill any gaps.
When it comes to withdrawing from my savings, I’ll need to decide on a distribution plan that works for me. This will involve understanding different withdrawal methods and determining a comfortable withdrawal rate. I’ll also need to consider the risks associated with investing my savings, including market volatility and inflation.
Ultimately, the decision to retire now or wait depends on my personal circumstances, risk tolerance, and financial goals. I may want to consult with a financial advisor to get personalized guidance and create a tailored plan for my retirement. By taking the time to carefully consider my options, I can make an informed decision that works best for me and my wife.
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