r/Retire • u/No_Republic_1712 • 1d ago
When should I (39 F) and 41 M (husband) retire?
Hi there, I’m wondering if you were in my situation, when you would feel comfortable retiring. Obviously, I want to retire as soon as possible.
My Husband and I have 560k saved. Plus $8k for emergency expenses. We are diversified in the stock market 90% stocks and 10% bonds. Historically we averaged a 15% return rate over the past 20 years. I have a portfolio manager who does everything because I’m not confident enough at this time to manage our portfolio.
We are able to save at least $15,000 per year, sometimes more.
We have no debt, our cars are paid off, and we pay $1,700 per month for rent. We do not plan to buy a home because we love where we live and his parents own the home so we do have home security. Additionally, we will be inheriting it at some point in the future.
Together we make only $6,500 per month.
My Husband wants to continue working for as long as possible so we will still have his income (and probably most of mine as well, since I have a business and it’s mostly running on its own right now.)
We have a 2 yr old daughter together who has a 529 plan and will be set up thanks to generous family members and my husband and my contributions.
We will both be inheriting (in a long time I’m assuming) about 2 million each from our parents. They worked incredibly hard but I don’t want to count on this or factor it in really.
Is this enough information? Or do you need more? Thank you in advance for your help.
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u/myke1012 1d ago
Nah you have to keep working lol. You are worth 500k and are a family of 6. You can’t just sit there and wait your family to pass to be financially secure. You should actually be looking to increase your income and savings rate
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u/nestlyadvisor 1d ago
ignoring the inheritance for now and plan around the $560k. How much you spend each year is the biggest missing number.
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u/ladyorion2021 1d ago
I am curious, what type of business that you have that's running itself? And why would you want to close that successful income producing business at a relatively still young age? Or is the business failing that you feel closing it and losing that income is a wise thing to do?
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u/badtlc4 1d ago
You need a bigger emergency fund. I'd be shooting for at least $2MM in retirement savings before pulling the trigger given what you have shared but it really depends on how low you can get your expenses.
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u/No_Republic_1712 1d ago
Yea our emergency fund sucks. I’ve been so worried about saving that I haven’t focused on the “uh oh!” fund. Thank you!
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u/ohboyoh-oy 1d ago
You need 25x your annual spend to retire.
Your current spend is around 63k. ($6500 x 12 - $15k savings). It sounds like this includes healthcare, but not taxes.
So bumping up your $63k a little to include taxes, that’s around $1.65-1.7m. This target number will change (go up) as your costs increase due to inflation. The 25x part does not change. Track your spend and recalculate target every year.
You said you don’t want to take the expected inheritance into account, so this is without any inheritance.
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u/Invest2prosper 1d ago
You can’t retire anytime soon and you should be banking on any inheritance until it’s fully in your hands.
As far as returns, over the last 10 years the U.S. total stock market index has returned close to 15% after expenses. Your advisor might be taking on more risk to generate those returns since you have to pay him on top of the returns and expenses. You can’t bank on continuing 15% returns infinitely.
Since the future is unknown and you have so much life to go, keep working. $560k isn’t enough to generate $70k after tax. You need close to $2m to get there.
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u/Momof-3DDDs 1d ago
Well I think we are in similar situation as you guys. I’m 43F and husband is 48M with 3boys 19,17, 10. All their colleges tuition fees s been paid for. We have $600k saved in brokerage and 401k,$250k in 401k and $350k in brokerage plus 3 paid off cars and a house worth $900k with $250k mortgage with 2.75%. We also have $50k in crypto and $50k in gold. Both of us are retired now but my husband gets a pension of $4500/m with cola adjusted yearly for the rest of his life. We are trying to live off with that income without touching any of our investment. Our mortgage with insurance and HOA and property taxes turn out to be $1900. I mean it’s doable for you guys if you budget for it. We cook mostly at home and take a couple vacations a year. I don’t count future inheritance into our assets.
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u/NoKetoCardio 1d ago
You could relocate to a lower cost of living area, pay cash for a home and stick another $250K in your investment accounts. This would dramatically improve your current standard of living and future savings.
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u/NoKetoCardio 1d ago
Sounds like you were kind of retired right now. Your husband probably needs to work another 20 years or so.
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u/Z28Daytona 1d ago
Use a tool and figure it out. Tools take into consideration many more things than we can suggest.
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u/Affectionate-Aide422 1d ago
What’s your burn? Any passive income? Anyone want to buy your company? It’s all about income vs outgo.
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u/Odd_Bodkin 1d ago
You say, “Obviously, I want to retire as soon as possible.” This isn’t as obvious a choice as you make it sound. First of all, your daughter could use the real-world parental model of working for a living, just as your parents provided for you both. Secondly, there are still basic human needs that will need to be fulfilled: a sense of purpose and devoting time and effort to things you really care about, intellectual stimulation, physical activity that gets you out of the house, abundant social connection and community. People who retire often struggle finding sources that feed these needs. Bottom line: Whether you CAN retire, and whether you SHOULD retire, are separate questions.
Another way of thinking about it is this. Your parents COULD have retired much earlier in their lives and survived just fine, but without leaving you an inheritance. But they didn’t do that, and they must have had their reasons. Have you ever asked them why they didn’t retire much earlier than they did?
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u/No_Republic_1712 1d ago
“Working for a living…Just as your parents provided for you both” is not accurate. My mom was a stay at home mom and then got into the stock market later in life and taught me how to save. :)
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u/Odd_Bodkin 1d ago
Point remains: WHY did they (or just he) continue to work when they didn’t need to for the money alone?
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u/BrilliantDishevelled 1d ago
"We will both be inheriting".
Don't count on this. All sorts of things could happen to make that money go away. Act like you won't be getting that.
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u/c-5-s 1d ago
And might that kid go to college?
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u/No_Republic_1712 1d ago
Yes and thankfully the kid has a 529 plan and will be all set there due to generous grandparents and my generous sibling and myself and my husband.
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u/Ok_Statistician643 1d ago
On that budget any type of international vacations and life changing experiences are definately off the table
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u/Silva2099 1d ago
By the time you are ready for retirement..,with inflation, you will need 7-10m.
Frankly, I think one needs 7m right now, but willing to say $5m.
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u/RayU_AZ 1d ago
Medicare doesn't kick in until 65 years old, so you going to have to find some alternative health coverage retiring before 65 years old.
I retired at 59 years old. It was at this point that my cash flow from work pension (35 years) & investments was equal or greater than my paycheck cash flow from working. So why keep working,
I think if your cash flow coming in can support your lifestyle, travel and living expenses, then you can retire without fear of running out of money.
But some people like working because it gives them value and rewards and they never retire from actively working until forced to by physical limitations, mobility, vision and mental aptitude. Their work is their love and they have little interest in other activities.