Can a 54-Year-Old Nurse Retire Comfortably with $1 Million?

Retirement Beckons: Can a 54-Year-Old Nurse with $1 Million in Assets Hang Up Her Scrubs?

A Comfortable Nest Egg

As a dedicated nurse with 26 years of service, Robin has built a substantial nest egg, comprising a pension, retirement accounts, and investment properties. With her pension set to cover health insurance and a combined $750,000 in her 403(b) and Roth IRA, plus additional assets, the question is: can she retire now?

Breaking Down the Numbers

To determine whether Robin’s assets can support her spending needs and wants, let’s examine her potential after-tax income. Assuming her 403(b) and Roth IRA are split 73% and 27%, respectively, and considering her stock account, real estate property, and cash reserves, we can estimate her pre-tax income.

Pre-Tax Income Before Age 59 ½

  • Pension: $84,000
  • Roth IRA: $8,000 (untaxed)
  • Stock account: $6,000 ($2,000 in long-term capital gains)
  • Investment property: $7,200

Total pre-tax income: $105,200

After-Tax Income Before Age 59 ½

Using TurboTax’s tax estimator, we estimate Robin’s taxes owed to be $13,138, leaving her with an after-tax income of $92,062 per year or $7,672 per month.

The Impact of Turning 59 ½

Once Robin reaches 59 ½, she can take penalty-free withdrawals from her 403(b), adding another $22,000 in pre-tax income. This brings her total pre-tax income to $127,200, with estimated taxes owed of $18,196, resulting in an after-tax income of $109,004 per year or $9,084 per month.

Adding Social Security

At age 62, Robin can start collecting Social Security benefits, estimated to be $1,564 per month or $18,768 per year. This increases her total pre-tax income to $145,968, with estimated taxes owed of $22,024, leaving her with an after-tax income of $123,944 per year or $10,329 per month.

State Income Taxes and Next Steps

While Robin’s after-tax income appears sufficient to support her needs, state income taxes may reduce her take-home pay. To determine whether she can comfortably retire, Robin should consider consulting a financial advisor to get a more personalized assessment. If the numbers are close, she may want to continue working until her finances are more secure.

Expert Guidance

A financial advisor can help Robin navigate the complex retirement planning process, ensuring she makes the most of her assets. SmartAsset’s free tool can match her with up to three vetted financial advisors in her area, providing a personalized approach to achieving her financial goals.

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