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When Can I Retire?

  • raiblerealtyinvest
  • Aug 27
  • 2 min read

Are you considering retiring but not sure when is the ideal time so you feel confident you will not run out of money?



retired couple looking at a cruise ship in the mountains


To figure out when you can retire, try these 10 steps:


Step 1: Define Your Retirement Vision

  • Age target: What age do you want to retire, and what’s the latest you’d be okay with?

  • Lifestyle choices:

    • Do you want to downsize your home?

    • Travel often or stay local?

    • Continue part-time work, or stop working completely?

  • Spending categories: Housing, healthcare, food, leisure, family support.


💡 This step makes the numbers meaningful — otherwise we’re just guessing.


Step 2: Estimate Retirement Expenses

  • Start with your current annual spending.

  • Adjust for changes:

    • Lower: work-related costs (commuting, saving for retirement, payroll taxes).

    • Higher: healthcare, travel, hobbies, home maintenance.

  • Create a rough annual retirement budget (e.g., $70k/year).


Step 3: Identify Guaranteed Income Sources

These are streams of income you can count on:

  • Social Security → estimate from SSA.gov (benefits vary by age of claiming: 62, FRA ~67, or 70).

  • Pensions (if any).

  • Rental income (if stable).

  • Business or annuities.


Subtract this from your expenses.👉 Example: Expenses = $70k, Social Security + Pension = $30k → gap = $40k to cover from savings.



Step 4: Measure Your Retirement Assets

  • 401(k), IRA, Roth IRA, brokerage accounts.

  • Savings & CDs.

  • Real estate you could downsize, sell, or rent out.



Person in blue shirt points at stock data on a laptop screen, seated in a modern room with a blue wall, plant, and black chair.


Step 5: Project Growth & Savings

  • How much are you saving each year?

  • What’s your assumed investment growth rate (e.g., 5–6% after inflation is common in planning)?

  • Run a projection to see how big your nest egg will be by different ages (60, 65, 70).


Step 6: Apply a Safe Withdrawal Rate

  • Rule of thumb: 4% rule — withdraw ~4% of your portfolio each year.

  • Adjust if you want to be more conservative (3–3.5%).

  • Example: If you have $1,000,000 → $40,000/yr sustainable withdrawals.

Does that fill the expense gap from Step 3? If yes, retirement is possible at that age.


Step 7: Factor in Taxes & Healthcare

  • Remember: Withdrawals from traditional 401(k)/IRA are taxable.

  • Medicare starts at 65, but you’ll still pay premiums + out-of-pocket. If you retire before 65, you need to cover health insurance.


Step 8: Stress-Test the Plan

  • What if the market drops early in retirement?

  • What if you or your spouse live 95+ years?

  • What if inflation runs higher than expected?


Financial planners often run Monte Carlo simulations (thousands of “what if” scenarios) to test sustainability.


Step 9: Decide on Your Retirement Age

  • Line up your projected nest egg with your withdrawal needs.

  • Example outcome:

    • Age 60 → shortfall (too soon).

    • Age 65 → “barely works” if markets cooperate.

    • Age 67 → solid margin of safety.

    • Age 70 → very comfortable, plus max Social Security.


Step 10: Adjust as You Go

  • Revisit every year or two.

  • Track actual savings, investment returns, spending, and adjust the target retirement date if needed.


If you feel you need a partner to assist with your retirement planning, investments, tax strategies, insurance, and budgeting as you make this huge transition, contact our advisors for a free financial planning consultation!


 
 
 

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