On a scale of 1 to 10, how likely are you to be a millionaire?

[disneysteve]

QMM, I could be wrong but some of your comments suggest that you haven't done a lot of solid retirement planning.

What are your predicted retirement spending needs?
What is the predicted future value of your current portfolio?
How much do you anticipate needing annually beyond your pension and SS payments?

Knowing the answer to those questions will answer your question here about when it's okay to cut back on saving and increase spending.

At 58, you're close enough to retirement to be able to answer these questions with a high degree of accuracy. If your pension will provide $50,000/year, how much extra income do you need to be able to generate from your portfolio? At what age do you expect to claim SS? You need to know the hole you're trying to fill in order to figure out how big your nest egg needs to be.

[disneysteve]

after 65 there are no incentives to keep working.

It looks like the incentive after 65 is based on increasing years of service resulting in a higher percentage payment.

65+ with 28 years is 68.10%
65+ with 30 years is 72.97%

[QuarterMillionMan]

QMM, I could be wrong but some of your comments suggest that you haven't done a lot of solid retirement planning.

What are your predicted retirement spending needs?
What is the predicted future value of your current portfolio?
How much do you anticipate needing annually beyond your pension and SS payments?

Knowing the answer to those questions will answer your question here about when it's okay to cut back on saving and increase spending.

At 58, you're close enough to retirement to be able to answer these questions with a high degree of accuracy. If your pension will provide $50,000/year, how much extra income do you need to be able to generate from your portfolio? At what age do you expect to claim SS? You need to know the hole you're trying to fill in order to figure out how big your nest egg needs to be.

Good questions. I have not taken the time to calculate any of your questions but I will have to start. I've been lazy.

[QuarterMillionMan]

This thought crossed my mind where disneysteve mentioned the scenario of living off my $1 million for 10 years (but only 7 years since at 58 now in 7 years I'll be 65). Retire at the end of 2024, pay my $160 a month for medical insurance and live off my $1 million but not take my pension until I reach 65 (God willing). My pension with 21 years at 65 would be 51% of my $8000 salary, so about $4000 a month at 65. And I would have spent most of my $1 million by the time I reach 65. In addition, at 65 social security income would kick in but with WEP minus $585 of my $1250 a month SSA so an additional $600 a month of income. I think I could survive on $4600 a month at 65.

[QuarterMillionMan]

WEP calculator below.

[QuarterMillionMan]

Thanks for planting the seed disneysteve. This plan of retiring early would solve my problem of spending most of my $1 million and not leaving behind such a large amount of money should I die (which I hope doesn't happen any time soon). So let's say if I die at 65 most of that $1 million would have been spent. Problem solved. But if I don't die by 65 my pension at 51% and SSA of $600 will kick in.

[disneysteve]

So if you retire today at 58 and wait until 65 to collect your pension and SS, you’ll get just over $56,000/year income from those two sources assuming your numbers are accurate.

if you think that 7 years from now you’ll be able to live comfortably on 56K then you’re all set. I would still use some good retirement calculators to run the numbers. Verify that the pension works the way you think. Go to your SS account and use their benefits calculator to verify what you’ll get. And figure out how much of your $1M will be left if you live on that money for the next 7 years.

The reality is that a great many people end up working years longer than they needed to because they don’t crunch the numbers adequately or don’t have confidence that they’ll be okay. I certainly could have retired earlier than I did and been just fine.

[disneysteve]

Make sure when you check your SS projection that you enter $0 for income for the next 7 years. Otherwise it assumes that your current income will continue until your retirement age/claiming date.

[Tabs]

I'm late to this game, but I technically hit a million in net worth not long ago. Doesn't feel like it at all though, since in my area, the average house is like $400k. With that much tied up in just housing alone, there is simply no guarantee that I can outlive whatever money I have right now. So, I am planning to continue my saving and investing journey.

[disneysteve]

I'm late to this game, but I technically hit a million in net worth not long ago. Doesn't feel like it at all though, since in my area, the average house is like $400k. With that much tied up in just housing alone, there is simply no guarantee that I can outlive whatever money I have right now. So, I am planning to continue my saving and investing journey.

That’s why I never talk about net worth. I only look at money in the bank, invested assets.

[LivingAlmostLarge]

This thought crossed my mind where disneysteve mentioned the scenario of living off my $1 million for 10 years (but only 7 years since at 58 now in 7 years I'll be 65). Retire at the end of 2024, pay my $160 a month for medical insurance and live off my $1 million but not take my pension until I reach 65 (God willing). My pension with 21 years at 65 would be 51% of my $8000 salary, so about $4000 a month at 65. And I would have spent most of my $1 million by the time I reach 65. In addition, at 65 social security income would kick in but with WEP minus $585 of my $1250 a month SSA so an additional $600 a month of income. I think I could survive on $4600 a month at 65.

QMM are you retiring? Do it. I think you are pretty solidly able too depending on the spending. I am going to guess you are ready to pull the trigger.

[QuarterMillionMan]

I'm getting cold feet.

[disneysteve]

I'm getting cold feet.

I know that feeling. Run the numbers. Then do it again. And again. And if the answer keeps being the same, close your eyes and jump off the cliff.

[james.hendrickson]

I know that feeling. Run the numbers. Then do it again. And again. And if the answer keeps being the same, close your eyes and jump off the cliff.

I'm with Disneysteve on this one.

[LivingAlmostLarge]

Do the numbers and come here and post it. Then let us see it and do it again. get ready to jump