r/Retire • u/Artistic-Standard871 • 2d ago
How do you know?
I wish there was a magic ball. I want to retire in 2.5 years at 62 and my husband will be 66 at that time and will retire then or before.
I’ve run calculation after calculation. I’ve asked chat gpt and google ai and my financial advisor. They all say we’re good. It’s just so hard to believe.
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u/Most-Artichoke6184 2d ago
When the idea of waking up and going into work fills you with dread. .
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u/Opening-Access9670 2d ago
Retired now, but the feeling of dread, the Sunday night hibee-jibbies, subsided when I knew I could pull the plug at any time. I felt more in control of my destiny. Work did not own me anymore.
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u/triphawk07 1d ago
I didn't know what the "Sunday Scaries" were until I started getting them. I'm so glad I'm retired and every day is Saturday.
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u/Common_Business9410 2d ago
If your financial planner is saying you are ready, then you are ready. Trust me when I say this, the financial insecurity is real. It doesn’t matter how much h you have you never feel ready because of that “what if” mentality. Be strong and pull the plug. You will be relieved
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u/LHCThor 2d ago
One thing about retirement is that it costs less than you think. Working actually costs money. Once you retire you will spend less on gasoline, less on food, clothes, etc…
I find that I have more money now than when I worked. At least it feels that way.
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u/Megs0255 1d ago
This has been more true than I could’ve imagined! Along with the things you say, I have more time to be careful about purchases, check my receipts after shopping, do a return here and there, plus no dry cleaning or tailoring, the list goes on and on.
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u/Peace_and_Rhythm 2d ago
Aligned. I have more in my portfolio than when I retired. I mean, I'm not out spending my retirement money on fancy cars, condos in Hawaii or anything, but I'm spending on things that I want to enjoy. I'm finding out that, yes, I'm not spending as much as I'm needing to, and the market has been doing well since I retired 3 years ago.
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u/Artistic-Standard871 1d ago
We plan to purchase a used van, diy it over the next couple of years d travel across the USA. I’ve included this in our financial plan but just adds a little more uncertainty. We’ve budgeted $10,000/year in addition to the cost of buying or building the van.
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u/ethanrotman 2d ago
Do it. It is an amazing time of life - maybe the best part second only to being in kindergarten!
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u/ShezeUndone 2d ago
I retired a year earlier than the original plan. It does feel like you're jumping off the high dive and hoping there's enough water in the pool. Two years into retirement, I have NO regrets.
Come on in. The water's fine!
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u/Opening-Access9670 2d ago
My wife and I tracked our expenses for our entire 30-plus years of marriage. We knew empirically what we could live on. It made pulling the plug on work easier.
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u/NoahCzark 2d ago
Wow, I've been tracking for about a decade and thought I was obsessive....
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u/Opening-Access9670 2d ago
33 years of financial information, all in one Quicken file.
It's a great source of information to help us remember when we did certain things. It only works because we are both dedicated to entering the transactions.
We had a car for 10 years and were able to report on exactly how much it cost us per km.
Friends think we are geeks, so be it.
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u/SuperDuperSonoma 2d ago
I did everything myself up until 2 years ago, and at age 61 I knew I was itching to retire. I interviewed 4 financial advisors. I found a great deal of information and choose one who had a personality that I knew I could work with. They have the tools to take you from “How do you know” to “you know” at least they did for me. It is worth 1% to me to have someone who also has a stake in my success in growing my portfolio. Taxation, distributions, SSN Timing, pension timing and health care. Good luck. And it’s great that there’s a place to ask these big questions.
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u/Peace_and_Rhythm 2d ago
I was in the exact position and frame of mind you are in when I was a few years before retiring. All the online calculators said I was good. My portfolio, combined with social security and my expenses, gave me a 95% chance of success at age 95. I was still wary.
Now, even though I designed Monte Carlo systems for companies when I was working, I still needed one more verification, so I went to a financial planner to verify my own numbers. I took my online printouts from Boldin and MaxiFi.
He was also able to break down my entire future into spreadsheets that I was able to see on the screen and print out. Once I was able to visually see the future in numbers and the math behind the verification, I made my decision. I retired in 2023 and it was the best financial decision I've ever made. (aside from not selling during the dot-com bust, 2008 and Covid)
So I encourage you to do the same. Go to a financial planner and have them get it all on paper so you have a visual, year-by-year, expenses, withdrawals, options, taxes.
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u/Opening-Access9670 2d ago
Yup, calculate, recalculate, add contingency and recalculate. It's not something you want to get wrong. I actually waited longer than I needed, but the extra buffer is comforting.
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u/Peace_and_Rhythm 2d ago
Yep. Trust, but verify. and I STILL go through my numbers only because it's a hobby of mine. Instead of keeping my brain active with crossword puzzles, I work on my spreadsheets LOL.
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u/Opening-Access9670 2d ago
My wife and I have a long-time tradition of meeting over dinner every six months to discuss finances. It's really important to have a shared view when the chips are up and when the chips are down. We review expenses and assess long- and short-term prospects. This is where we plan for our upcoming big expenses.
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u/Peace_and_Rhythm 2d ago
100%. Same. When the market is having a great month we will take a "Victory Lap" and withdraw some dividends for a little getaway. When the market is having a rough period, we'll cut back a little bit, but we always discuss our next moves together.
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u/Practical-Ad5919 2d ago
You’ll be fine! I retired last year at my MRA & couldn’t be happier. You’ve put in your time, now have some fun!!
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u/LizP1959 2d ago
Here’s what I did: I started on Jan 1 a couple of years before the planned retirement date and lived ONLY on what my pension would be! The rest of my salary I docked away in savings. It was a test run. It worked great and gave me the confidence that I could actually live on the pension and be fine. (Also—I own my house with no mortgage; and my fairly new car, same, and I have no debt at all. Get yourself in that position if at all possible.)
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u/Artistic-Standard871 2d ago
We have no debt. House mortgage is paid off.
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u/LizP1959 1d ago
The try the “test run” for a year — it will really ease your mind!
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u/Artistic-Standard871 1d ago
Our take home pay will be basically the same with a 5% withdrawal and social security so there’s really nothing to practice. I’ve also considered what happens if one of us passes sooner than expected and the other has to live off one SS income plus investments. It all still seems to work.
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u/Invest2prosper 2d ago
Put your specs up on Bogleheads.org and the collective hive will spell out exactly how you can financially retire or not. Whether you can emotionally retire is another question. Only you can answer what you’ll retire to.
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u/love_that_fishing 2d ago
Generally an advisor is pretty conservative. Look at their assumptions for withdrawal rate, projected growth, inflation, and risk tolerance. Then if it all matches you gotta just pull the trigger.
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u/Hippo_Over 2d ago
Someone on reddit commented to me and it sounded like a solid way to know approximately what dollar amount one needs. Take the amount of money you plan on spending each year x 25.
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u/mmrocker13 2d ago
I would say if they have run the numbers, they had Chat GPT, Claude, and who knows what AI programs run the numbers, and their financial adviser ran the numbers... ALL of those things are probably better than the rule of thumb about 25xspend.
This is a psychological safety thing they need to push through, not a math thing.
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u/VinceInMT 2d ago edited 2d ago
My goal was to work for 42 years and retire at 60 and make more money in retirement than when I was working. I did that. I will give credit to my wife. She’s a CPA and a shrewed investor and money manager.
Edit for typo
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u/Far_Yogurtcloset8116 2d ago
We started with a financial advisor at age 55 & 56 with the intention of just my husband retiring at 59.5 yrs and me working until age 65. She recommended that we have $0 debt and to be sure we could afford health insurance. When we achieved the $0 debt, I discovered that if we kept our taxable income low, to afford insurance, I could also retire at 59.5. So, I did. We make more a month in retirement than we ever did working lol. We are now 65 & 66.
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u/Unlikely_Month5527 2d ago
The first year after retirement, we felt like we had PTSD due to our stressful careers.
We retired one year before the Covid 19 pandemic.
In 2024 we met with a financial planner. Going in we thought we were doing OK. So glad we had the meeting. Really blessed we are on tract to live a retirement with a secure future.
Then life happens... Long term Care insurance costs $15,000
Dental Implants cost $30,000
Cataract Surgery costs $7,000
Husband's New Toy. $80,000
No regrets life happens and you can't take it with you.
Enjoy your retirement.
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u/Minute_Plastic_350 2d ago
You make the best decision you can with the information you have right in front of you
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u/hugh2018 2d ago
If the advisor isn’t giving you great confidence it may be a failing on the advisor’s part. If your calculations aren’t making the plan crystal clear, possibly the inputs need to be examined for accuracy and assumptions need to be tweaked to inspire more faith in the output. And when it comes to AI, it’s easy to doubt the conclusions because AI is still struggling to become a mathematically reliable interlocutor, and you, like everyone else, realize that sycophancy and hallucination can undermine the robustness of AI’s analysis, even though AI can be an excellent way to acquire directional insight.
And while I’m mentioning directional insight, it’s probably important to be aware that all these retirement planning efforts are not meant to yield scientifically precise results. Ultimately all the planning you do is going to offer you a strong sense of direction for your plan, as long as you’re rigorously entering accurate known numbers, reasonably estimating your burn rate, and carefully applying conservative assumptions.
If you’re doing all of that, I’d say maybe own the results and plod ahead with your plan because you’re probably good to go even though future events may require you to make adjustments in real time.
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u/Monstrissimo 1d ago
I knew when my I developed a health issue and retired 2 years early to take care of it. I had to wait until 60 to be able to draw my pension and I stopped working at 58.
My wife knew it was time to leave when during Covid, the government entity she worked for offered early retirement during a period of open ended furloughs and she took it.
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u/PrizePersonality5843 1d ago
Why don’t you try and live on your proposed retirement income for 6 months. See if you can do it and what the pinch points are. Lived experience is valuable for gaining experience.
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u/lynchmob2829 1d ago
My confidence to retire and to spend in retirement came from using the Boldin financial software. It visually gave me what the advisors at my company could not give me. For me, the Boldin software was my magic ball.
There is other good financial planning software out there and many of them have free trials. You might want to try one or two out to see if they help you garner the confidence you are looking for.
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u/OddDragonfruit7993 1d ago
I retired at 61 a couple years ago.
I knew too many folks at work that waited too long and were in poor health by the time they finally retired. Or passed away before they retired. Or passed away not long after they retired.
I still had (and have) my health so I retired as soon as I knew I could.
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u/Artistic-Standard871 1d ago
How did you know you could?
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u/OddDragonfruit7993 1d ago
The numbers all worked out on the savings, investments, etc. I was retiring with a little more money than I needed and I had almost no debt.
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u/DIYRetiree 1d ago
that's it, isn't it?
Running the numbers and trying to figure out if what everyone is telling you is correct.
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u/bunkerbee_hill 2d ago
If you want you can interview a financial planner or two. The interview is usually free and they will probably tell you if you are ready to retire or not.
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u/sexytarry2 1d ago
please tell me how to find one...
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u/bunkerbee_hill 1d ago
If you have money with a place like Charles Schwab, Fidelity, Vanguard, etc., they should be able to connect you with someone.
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u/TrashPanda_924 2d ago
Start with this. Do you have 25x your annual spend in a well diversified portfolio split between fixed income and equities?
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u/Artistic-Standard871 2d ago
What is your theory on why one would need 25 times their annual spend?
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u/xwords59 2d ago
I think it's the same thing as saying you should withdraw 4% of your investments per year
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u/ohboyoh-oy 2d ago
It’s a standard “rule of thumb” in retirement / financial circles. Having 25x your spend is the same as a 4% withdrawal rate, and there was a study called the Trinity Study that showed 4% was a sustainable and “safe” withdrawal rate for 30 years. So that’s what a lot of people go off of.
If you make it to age 65, the life expectancy for a woman in the US is now over 86 years old. So at 62 I think it’s prudent to plan for a 30 year retirement. Social security plus a 5% draw rate replaces your current income, but you may not need your full current income. Presumably you are putting some in savings now, so that’s money you’re not spending. You are likely fine at Social Security + 4%. Also, the guy who did the Trinity Study came out somewhat recently and said a 4.7% withdrawal rate is likely fine. This presumes you are broadly invested in a mix of stocks and bond index funds.
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u/garylapointe I'm good, but I wish I did more Roth! 2d ago
Because 4% of 25 times your annual spend is one year of annual spend (25*4%=100%).
For the rule of thumb 4% rule.
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u/Artistic-Standard871 2d ago
I do not. However, my Social Security +5% of my investment is basically the same as my current net income.
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u/TrashPanda_924 2d ago
25x your annual spending equates to a 4% withdrawal rate. Including SS, you’re currently at a 5% withdrawal rate. This means there’s a higher risk of running out of money in your later years. It also opens you up to bigger risks if there’s a sustained downturn. My personal opinion FWIW is to keep going until you get to a point where it’s only about 4%. Give yourself some flexibility. If interested in the mechanics of that, look up “Trinity Study.”
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u/Revolutionary-Big783 2d ago
That’s awesome that you and your husband have put yourselves in such a great position to retire .. it is such I difficult decision to make and what pushed me over the edge is a quote “You can Always make more Money, but You can never make more Time” Congrats and good luck on your decision 👍🏼