Retirement
I currently owe $160,00 on my condo. I am 64 this year. I earn 50-60k in a job that I am not limited by age. My 401k has approx. $140,00. At this point, I am tired of working, but do not want to be a bag lady or a cat-food retiree. Is it silly to think I should pay off my home and (the mortgage is my only debt.) I live pretty frugally and there are no others in the household. There is (no longer) impending wills that would provide money. I remodeled my home 7 years ago and have about $12,000 in regular savings. SS will pay me about $1,500. From this generic info, when should I retire? Thanks (PS) I learned about you from PRIME TIME - Jane Fonda book.
Terry Says
It's nice to hear that people are still reading Jane's excellent book of advice on all aspects of life. I certainly enjoyed working with her on the financial section. Now, I don't want to burst your bubble, but you're not going to like my answer! You shouldn't even consider fully retiring until at least age 70! Certainly not with that kind of mortgage payment hanging over your head. And you haven't taken into account other variable and rising costs in retirement -- from property taxes and condo fees, to healthcare costs -- and the dread possibility of needing long term custodial care. On the income side, you should try not to take Social Security until the last possible minute at age 70 -- but certainly not before you reach full retirement age around 67. All future cost-of-living increases will be based on that initial payment amount. Certainly there must be a way to compromise, perhaps just working part-time at some point. I would recommend the services of a Certified Financial Planner (fee only) to shed some light on your long-term needs. You can find one at www.fee-only.org. And at the very least, use the Fidelity Retirement Planning tool -- a six question online survey that will put things in better perspective.
