When to do it

Looking for advice. I am a single woman, 61, with a mortgage of 175000. I want to retire around 63. I understand that I would not have Medicare until 65. I find the whole retirement thing to be hard to understand. I have a pension from work, social security and a small 401c. Is there an easy formula to use?


Congrats at setting a retirement date, @Suzzzzzz59 ! I don’t know about there being an easy formula to use, but one of the things I did prior to retiring at 61, was to check my projected Social Security benefit. I wanted to know how much I was leaving on the table by retiring early. My game plan was to pull money from savings to tide me over until age 62. I had some assistance from a professional advisor, but basically, I sat down, thought about what I wanted to accomplish, looked at all my income streams, and developed a plan that works for me. So far, so good, but there are sure to be hiccups along the way. All we can do is plan for them as best we can.


I know Clark Howard has great and easy to understand information regarding retiring, different ages…

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Congratulations @suzzzzzz59 for having some foresight for retirement which could be right around the corner. I know of no formula because I’m not sure I’d trust a formula for something so crucial to the rest of your life. Do you have thoughts of speaking with a financial advisor? It can be so complicated and some of the timing is unpredictable since most of us have no idea of our lifespan. Even with guaranteed income, some of it may be taxable. If you become mortgage-free, there are still property taxes and homeowner’s insurance, maintenance and repairs to consider with ownership. A good financial planner can help you form a timeline and path to a stress-free retirement.


wow i am 71 and still working because i am low income, don’t want anything from my children what to be able to take care of myself. good luck

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I don’t think there’s an easy formula for a very simple reason: everyone’s preferences and risk tolerance of running out of money is different.

You mention you have a 175k mortgage. This could be really bad, or really good depending on a few things. For example:

  • How much of a nest egg you have saved up?

  • What income streams you have and how big are they?

  • What do you expect your investment returns / dividends to be like for the rest of your life?

  • With all this, do you feel like you’ll run out of money before you run out of life?

When you answer all these questions, be sure to add a safety margin for financial emergencies! This safety margin is up to you and your own personal preference / risk-tolerance, which is why a straightforward formula is pretty hard. But if you must use a formula, on a high level it’s:

Your net worth - ($ spent/yr * how many years of your life is left) + ($ coming in per year from pensions/dividends * how many years of life you have left).

If the number is much larger than $0, you might not run out of money before you run out of life. If it’s negative, the reverse is probably true. Though if you’re not sure of the math, you should really talk to a financial advisor and make doubly sure that you have enough resources for retirement before doing so. You can only retire once, so make sure everything’s lined up before you do it.



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