Our mortgage and home equity loan will be paid off the same year that I turn 62 (in about 11 years). The same year I would be eligible for Social Security, if I chose to start at age 62. Obviously we will want to maximize our income, while at the same time balancing my strong desire to BE RETIRED as soon as possible. More than likely the longer working life will have to win that war, in order to have the money we need, but a girl can dream, right?
Based on current SSA estimates, if we take our benefits at age 62, we would be looking at about $26,400 a year. This is both of us combined. With DH not working for several years now, he no longer has enough credits to claim his own social security benefits, so he will have to take the 50% of my benefits, option. And since I got such a late start on my 401k saving, that most likely won't be enough to live on. If we wait until age 67, we will earn about $40,000 a year. I really don't want to wait that long. I don't know what the amount would be at age 64 or 65 - in the middle, but I'm guess it's in the middle between the 2 amounts, so around $33,000 a year.
We will also have my 401k to draw on. Who knows what that amount will be! This year started out with some decent returns and now is in the negative. Based on what I contribute (and will increase that next year, when I don't have DD to support), what my company matches and also contributes as a profit sharing portion, and on an average historical earnings of 8% a year, we'll probably have somewhere in the neighborhood of $250,000. Drawing 4% a year would give us $10,000 a year income. I read somewhere recently that 4% is a recommended amount, in order to have enough left in your savings to last all the retirement years.
I look at homes for sale - anywhere out in the country, in the mountains - wherever population is way less than it is where we currently live and neighbors are few and far between. I just want to get an idea of what prices are, for something we could live in for our retirement years, compared to what our home value is. For estimating purposes, let's pretend, using today's dollars, that it's 11 years later and our house is paid for. It's worth $225,000. I am finding decent homes, with land and a shop, out in the middle of nowheresville, for $135,000-150,000. After estimated selling fees, etc, let's say we clear $50,000 after paying cash for new home. That's 50k we can add to our retirement savings, now bringing us up to $300k and giving us now $12,000 a year to draw out, instead of 10k. Retiring at around 64 or 65 would give us about $45k a year income. I would think we could live on that - with no mortgage payment. We don't plan on living an extravagant lifestyle, that's for darn sure. Just a quiet life, with our animals.
I will definitely have to do some Social Security benefits research in the coming years. Like, say, what if we decided to do this move at age 62, but I found a job (obviously going to make way less than I do here in the big city) until I was 67 and then take Social Security. Will the 5 years of lower income hurt/decline what my monthly SS income will be by the time I'm 67, compared to if we stayed here and I worked my higher paying job until I'm 67? Also, isn't there some rule that at some age you have to start withdrawing out of your 401k?
It's a 2 sided issue - wanting to get the hell out of this place/area, along with retirement looming in the next 11-15 years. I don't want to make stupid decisions, but living here just gets harder and harder....even without the drug neighbors situation, the traffic and overcrowding around here is insane, not to mention the high cost of living. I am so sick of it. It's a good thing I love my job and employer, that and my decent salary is really the only thing holding me around here.