6 Replies Latest reply on Dec 14, 2013 3:30 PM by Pywacket1952

    Will I have enough money?

    Pywacket1952
      I am 61, plan to retire at 65, which is 3 more years, because of various things.  I make 81K, save 24K to a 457b each year.  I will have 31K total per year from pension and SS, plus 21K from renting rooms and basement in the house out.  The 457b currently contains 310,000, and is currently earning 5%.  The house will NOT be paid for and costs 1.3K on mortgage per month. I plan to live in the house and keep renting as long as I can.  No current medical problems.  Family is long-lived.  Should I work longer?  Should I save more?
        • Re: Will I have enough money?
          I think that depends upon how much you anticipate to spend.  With your current saving pattern of $24K on a ~ $80K salary - you should not have any problems.  Here is some simple math.  Over the next 4 years, you will add another $96K to your TIAA, bringing it to about $400K.  Let's assume you do not earn anything on this between now and age 65.  With your $31K from pension and $21K from rent. etc. you will have $52K of income per year by 65.  If you use the classical rule of 4% per year withdraw from your TIAA, that will give you another $16K per year, resulting in a total of $68K per year which is about $4K more than the rule of needing 80% of your current salary during retirement.  Again, these are some very rough calculations, but should give you an idea of some of the math behind your retirement funds managements - I took a rather conservative approach.  Hope this helps.  
          • Re: Will I have enough money?
            herbyreed
            Pywacket1952 said...
            I am 61, plan to retire at 65, which is 3 more years, because of various things.  I make 81K, save 24K to a 457b each year.  I will have 31K total per year from pension and SS, plus 21K from renting rooms and basement in the house out.  The 457b currently contains 310,000, and is currently earning 5%.  The house will NOT be paid for and costs 1.3K on mortgage per month. I plan to live in the house and keep renting as long as I can.  No current medical problems.  Family is long-lived.  Should I work longer?  Should I save more?
            For someone in your situation I would definitely look into long term care insurance.  It sounds as if your house is going to be a significant source of retirement income and you would not want to have to sell it and lose the income in order to meet the cash reserve requirements at a nursing care facility. LTC insurance lowers the amount of cash reserve needed.  Talk to a financial adviser soon and weigh your options because LTC insurance gets more expensive with each birthday and you are less likely to get the good health discount if you wait.
             
            As for working longer - only you can answer that question.  If you really enjoy what you are doing I would say why not? You are making a good salary and you could then defer collecting SS if it makes financial sense to do so.