Does this guy have enough to retire?

Financial Planning - Financial planning in general. (Moderated) 

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Subject Author Date Does this guy have enough to retire? po.ning 10-20-2006  Re: Does this guy have enough to retire? joetaxpayer 10-20-2006  Re: Does this guy have enough to retire? Tad Borek 10-20-2006  Re: Does this guy have enough to retire? Elizabeth Richa... 10-20-2006  Re: Does this guy have enough to retire? WeathermanBill 10-21-2006  Re: Does this guy have enough to retire? Andrew Koenig 01-09-2007
Posted by on October 20, 2006, 12:35 pm OK I have this friend who constantly worries about his retirement. So I took a look at his finances. He is married and 60 yr old. Can retire now but would more likely to retire in 2 years. His house is paid for (worth about $700,000). He has a pension which will pay him about $3,500 a month, and provide health insurance for life. He and his wife both have social security, but I am not sure how much of that is taxable. In addition, and here is the kicker, he has combined taxable and tax deferred investments totally a little over 2 million. So can this guy rest easy and enjoy life? Or should he stay up at night worrying? Posted by joetaxpayer on October 20, 2006, 12:59 pm po.ning@gmail.com wrote: > OK I have this friend who constantly worries about his retirement. So > I took a look at his finances. He is married and 60 yr old. Can > retire now but would more likely to retire in 2 years. His house is > paid for (worth about $700,000). He has a pension which will pay him > about $3,500 a month, and provide health insurance for life. He and > his wife both have social security, but I am not sure how much of that > is taxable. In addition, and here is the kicker, he has combined > taxable and tax deferred investments totally a little over 2 million. > > So can this guy rest easy and enjoy life? Or should he stay up at > night worrying? If we follow the rule of 25X, 4% withdrawal, he can tap $80K from the $2M each year. $42K of pension, totaling $112K/yr of income. You offer no idea what his pre-retirement income was. If I assume his wife was a doctor making $300K in her own practice, and he was a truck driver with a good pension, then they have a lot to worry about. SS will add some amount, we don't know how much, but the missing piece to this puzzle isn't even that, it's what was their final income, and were they living below or above their means. (If nothing else, this board has shown that replacement income doesn't work well by formula, i.e. at any income level some may need 100-110% replacement, others as low as 30-50%, all depending on income, spending, and lifestyle). JOE Posted by Tad Borek on October 20, 2006, 2:39 pm po.ning@gmail.com wrote: > OK I have this friend who constantly worries about his retirement. So > I took a look at his finances. He is married and 60 yr old. Can > retire now but would more likely to retire in 2 years. His house is > paid for (worth about $700,000). He has a pension which will pay him > about $3,500 a month, and provide health insurance for life. He and > his wife both have social security, but I am not sure how much of that > is taxable. In addition, and here is the kicker, he has combined > taxable and tax deferred investments totally a little over 2 million. > > So can this guy rest easy and enjoy life? Of course he can. That's more than the vast majority of Americans retire on, and almost all of his costs will be for discretionary spending. Keeping in mind that "discretionary spending" is unlimited so regardless of how much money you have, it's always possible to blow through it. Let's pick on famous entertainers for examples. Remember MC Hammer, Can't Touch This?...he blew through his multimillion dollar fortune and ended up something like $10M in the red. Big mansion, big entourage and all those big pants I guess. Or Kim Basinger...buying her home town and going bankrupt in the process. Does he want to do that kind of silly stuff? Though an "entourage" would be kind of a fun thing to have. -Tad Posted by Elizabeth Richardson on October 20, 2006, 6:46 pm > > So can this guy rest easy and enjoy life? Or should he stay up at > night worrying? We have much less and are retired (I am 60, husband is 51). We are enjoying life. Why would you think this guy would have a problem? Elizabeth Richardson Posted by WeathermanBill on October 21, 2006, 3:25 pm On Fri, 20 Oct 2006 11:35:51 -0500, po.ning@gmail.com wrote: >OK I have this friend who constantly worries about his retirement. So >I took a look at his finances. He is married and 60 yr old. Can >retire now but would more likely to retire in 2 years. His house is >paid for (worth about $700,000). He has a pension which will pay him >about $3,500 a month, and provide health insurance for life. He and >his wife both have social security, but I am not sure how much of that >is taxable. In addition, and here is the kicker, he has combined >taxable and tax deferred investments totally a little over 2 million. > >So can this guy rest easy and enjoy life? Or should he stay up at >night worrying? The guy is in great shape. The only fly in the soup is how strong the company funding is for their pension obligations. Try to ascertain any unfunded liabilities that the company might have to determine how stable that income will be. In the future he might buck up against a mean test for SS but with 2M I certainly wouldn't worry Weathermanbill Similar Threads Posted Why Is The US Ranked 37th In Health Care by WHO? Would I Really Want To Retire Here? February 29, 2008, 1:46 pm