Can We Afford to Retire?

Joe and Jane are 62 and 60. Both are still working, but Jane will likely stop working at 62, while Joe has plans to retire at 65 but is interested in retiring any time if possible. Joe and Jane have worked for their adult lives, and have saved over $2 million in their 401ks, both Traditional and Roth, and they have some money that they recently inherited from Jane’s Mom.

They enjoy work but want to take a look at their situation to understand when they can retire, and what sort of flexibility in income they might have. They also want to understand when they should take social security, and how to acquire private insurance if they both retire before 65.

What they were looking for: They were looking for someone to help get them to and through retirement, taking into account all parts of their financial life, taking the burden off of them, and allowing them to enjoy retirement.

What We Did

After gathering client information, we showed Joe and Jane that based off what they wanted to spend in retirement, they could retire now if they wanted. Jane decided she would move retirement up, and Joe will still work for a few years. We made a plan for when they would both take social security, modeled out how much private insurance would cost if Joe retires before 65.

This included some plans to move money from their traditional retirement accounts to Roth retirement accounts before they turned 75 when Required Minimum Distributions would force them to take money out of their traditional accounts. We made plans for them to gift small sums of money to their kids over the next 15 years, and modeled out money for family trips every year.

Live in a high-tax state?

If you live in a state like New York, California, New Jersey, or Connecticut, taxes can quietly become one of your largest lifetime expenses. While you can't control tax rates, you can control how you plan around them.

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