When should I retire?

I have $1,000,000 in my 401(k) and am 48 years old. My wife and I have a $550,000 house paid off with no debt. We have $200,000 in CD's and cash. I have a pension that assures I will receive $1,200 per month for life. Currently, I maxed out on my 401(k). We save $35,000 per year on top of both of our 401(k)'s. My wife is 50 and she also maxed out her 401(k), but plans to retire at 52. My question is when can I or should I retire?

Retirement, 401(k), Retirement Plans
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September 2017
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It depends on your desired standard of living in retirement. It also depends on how your assets are invested. Just to give you some quick guidance, most people don’t spend as much in retirement compared to their working years. Most retirees’ replacement rates are 60-80% depending on how much you earned while working. For those who find themselves in the top quartile of income earners in America, your replacement is more like 60%. 10-20% of that replacement rate will come from Social Security with the remainder coming from personal savings and pensions. So if you have a household income of $200,000, you will probably only need $120,000 for retirement. Why is this the case? You are no longer saving for retirement and you are no longer paying certain taxes like Social Security taxes. $30,000 to $45,000 will come from Social Security with the remainder ($75,000 to $90,000) being funded by personal savings.

If you invest passively via a globally diversified portfolio of index funds and work with an independent fiduciary wealth advisor, you can expect to afford to safely withdraw 4-5% of your entire retirement asset base throughout retirement. For example, if your entire retirement asset base is $2,000,000 at retirement, you can afford to safely withdraw $80,000-$100,000 per year, adjusting for inflation.

A good first step would be to find out what your individual risk capacity score is as well as take a retirement analyzer to see if you are on the right track. Both of these tools are easily accessible online and will put you on the right foot in terms of determining your retirement readiness. 

September 2017
September 2017
September 2017
September 2017