"Anytime is a good time for playtime." Luther the cat
Over the years, I've worked as a journalist, personal finance writer and marketing copywriter. I was fortunate to hold many interesting and unique positions over the years and I learned a lot from every job.
Still, my 36-year career has been marked by continuous change, upheaval and job loss triggered by a series of layoffs, a corporate relocation, a start-up that went belly up and even the 9/11 tragedy, which led to a work slowdown at the financial services consulting firm that employed me.
For a long time, my retirement savings goal has been $1 million (with another $131,000 for healthcare expenses).
Now in my late 50s, I recently transitioned from working full-time (as a contractor with no benefits) to part-time work with the same employer, part of a long-term plan to semi-retire by the time I'm 60, make more time in my life to help out my dad and become more involved in my local community.
This wouldn't be possible if I hadn't paid off my mortgage (!) in July 2012, or if I had any other significant debt, but being completely debt-free, I know that my part-time income can pay 70% to 98% of my ongoing living expenses.
February 1, 2018
Investments, At a Glance:
Cash & CDs: $60,588
IRA CDs: $19,421
Traditional IRAs: $583,726
Roth IRA: $202,941
Taxable investments: $127,308
Zillow estimated home value: $300,087
2013 Honda Civic: $10,000
Grand total of investments + house: $1,294,071
My Income in Retirement Goal: Total portfolio: $993,984 x 3.5% withdrawal rate = $34,789 divided by 12 mths = $2,899 in investment income generated monthly. This means I am 86% of the way toward reaching my goal of having my investments generate $3333 in income each month ($40,000 a year).
If my assets generate $40k a year, then I know through years of tracking my expenses that I can live on that. So I should be able to delay collecting Social Security until full retirement age (age 66 + 10 mths) and enjoy a big boost in my monthly benefit.
Alternatively, I could take my Social Security benefits at age 62, considerably boosting my monthly income. However, this would permanently lock in my income and it seems foolish to me not to take advantage of a higher monthly benefit by deferring for a few more years.
Taking a long-term perspective, a collapse of Obamacare, health problems, a possible move by Congress to keep Social Security solvent by reducing benefits and rising living costs in general could make life more costly, so my strong preference would still be to defer taking SS until at least full retirement age.
My current best guess for monthly SS benefits at full retirement age: $2,215-$2,243.
My financial goals for the next 7 years are to:
1. Retire from full-time work. Challenge: How to ensure continued affordable health insurance coverage without an employer? Strategy: Transition from full-time work to part-time work so as to qualify for ACA subsidies. March 2018 Update: Now working 20-25 hrs weekly and enrolled in healthcare exchange.
2. Continue working part-time to cover majority of current expenses for at least a few years, to inject some structure in my life, a sense of purpose and a social outlet.
3. Defer collecting Social Security until full retirement age of 66 and 10 months.
Target Asset Allocation:
Total Stock: 45%
Domestic stock: 30%
International Stock: 15%
Total Bonds: 45%
Domestic bonds: 32%
International bonds: 13%