I am 41 and my partner is 50. We have $ 800,000 in pension savings and earn $ 250,000. We want to retire soon, but we know our money will not last. What can we do?

I would love to read your answers to everyone’s retirement questions, but I’m not looking for something that closely matches what I want to do.

I’m 41 and my partner is 50. We both go to work and earn $ 250,000 a year. We are in an expensive living area and have no plans to move elsewhere, but we live very simply.

We currently have about $ 800,000 in pension accounts, and an approximate maximum of approximately $ 401 (k) per year in both. The main investments are in target-date funds (purpose) Age 65)

In addition, we can tap into living expenses if we need about $ 400,000 in non-retirement savings and investments, and continue to contribute $ 5,000 to $ 6,000 per month to investments. Our strategy is often a combination of index, value and growth funds, with minimal personal equity exposure.

We have no mortgage or car fee and our monthly expenses are generously estimated at around $ 3,000 (usually less). This includes fixed bills and optional expenses and property taxes calculated over a 12-month period.

We both want to stop working now or sooner, but our finances will not last long enough (if we are 90 years old). But it’s hard for me to figure out when there is a reasonable deadline we can trust, especially if we continue on our current savings path, as well as stumble our leisure time, and someone will continue to work after a few years. Other stops.

Thanks!

See: We’re in our late 50’s and retired with less than $ 1 million: ‘Did I jump the gun?’

Dear reader,

This is a difficult question for everyone. You are certainly far from wanting to retire as soon as you can, but do not know when it is appropriate, or how much money is enough.

However, what you want for yourself is how you both save – you will both be diligent in preparing for the future, and your income and spending habits will definitely help.

You are right in saying that if you retire right now, you will face some difficulties. Don’t get me wrong: $ 800,000 in pension accounts and $ 400,000 in non-retirement assets is a lot of money, but not if you need money that will last you a lifetime. If you estimate that you will live to be at least 90 years old, that’s 50 years for you and 40 years for your significant other.

The unfortunate answer is that there is no “right” time to retire. I know it’s not the answer you expected. However, the questions and exercises you can ask yourself may begin to clarify a little more for your personal situation. After crushing the numbers and considering the possibilities you may also find that you really want to be flexible in this timeline.

Ask yourself exactly what you want to do in retirement or why you want to retire now. Do you both hate your job or just want to travel around the world and think it will take a lot of time? Some people can’t wait to retire, and they save as much money as they can to retire at 50 or so, and then find themselves completely bored, aimless and unwilling for responsibilities. Others, of course, pursue “financial independence” where they can retire at any time, but continue to work on certain skills even if they are not at work at the beginning of their savings journey.

To find the right time, you need to get to a point where you are comfortable even if life throws you off. Finding yourself retiring early and then suffering from an unforeseen emergency can put a lot of stress on your retirement assets. A reader shared a letter in our “Help Me Retire” column, saying he did it and could not continue working after trying to get back to work.

Need more actionable tips for your retirement savings journey? Read the Market Watch “Leisure Hacks” Column

It is important to note that the money you hold in your 401 (k) plans may have been built up to the age of 59 (or 55 if this is your current plan and you have left the service). Ineligible distributions will be taxed as well as fined.

Ask yourself how your life might change in retirement and what it will cost. If your employer or one of them thinks you are offering health benefits and you are both retiring right now, do you need to find your own health insurance plans, and at what cost? If one retires now and the other continues to work for a few more years, will the one still working have access to medical care that can support both of you? Private health insurance can be very expensive independently, and you should carry that cost with you until you qualify for medical insurance at age 65.

You now have a good setup. Your cash flow is extra positive, and you seem to be on the same page in cost and savings. Another plus is that you do not have a mortgage or car fee, of course. If you do not hate your jobs, you may want to stay in your workplace for a while to reap the benefits they offer – not just salary, but 401 (k) and health insurance, if it is provided. If one of you is staying in a job while the other is retiring, it is important to remember the value of those benefits and how much they can help you to keep your finances strong.

Also, consider the effects outside of the immediate effects. Leaving employees altogether can affect your social security benefits, especially if you are far away from your traditional retirement year. Even if you earn much less than you used to, you may want to consider working part-time for this reason.

I know you want to know when the right time is, but it can only be found by you and your financial advisor. To get a general idea, try to make some estimates of what you are going to spend on your pension and how much you should spend on your retirement accounts.

Do not miss: I would like to retire at the age of 33 and 40, but have expensive medical needs – how do I achieve financial independence?

There is no one-size-fits-all approach to the right withdrawal rate (4% rule competed again and again) but you say the annual withdrawal rate is 3%. Let’s do the most difficult calculations. If you now rely only on your $ 800,000 pension savings, it will get you back $ 24,000 a year. Now say you need $ 5,000 a month in retirement – that’s $ 60,000 a year, so you’ve see a $ 2 million balance to get $ 60,000 in annual distribution at a 3% refund rate.

Keep in mind that this is very common and does not take into account taxes, changes in your lifestyle, rising inflation, Social Security benefits that reduce the amount you have to withdraw, and more. You should also see this image in layers; You may live longer than your spouse, especially given the age difference of nine, and you will need money after your significant other passes to extend your life.

These are just some of the goal setting shareware that you can use to get started. I strongly recommend finding a financial advisor even for “financial verification” so he or she can cut down on the most specific and relevant numbers for you, considering what the circumstances are, and when to say “enough”.

See also: I’m financially independent at 33 – what now?

And if you have never heard of FIRE (abbreviation for “financial freedom, early retirement”), I encourage you to look into it, especially since you and your partner are better at living below your means. MarketWatch has dedicated an entire section to it. Most FIRE followers are supersavers, meaning they live a frugal lifestyle and aim to reach a certain number of times 25 times their annual expenses before they leave work.

However, there is no standard approach to FIRE. Some people try to save more than that, which is sometimes referred to as “fat fire”, while others are right in storing less so-called “lean fire”. The people I spoke to came from different backgrounds and work types, as well as those who were married and came from different backgrounds, such as those with or without children. Even if they quit the job they had, many still bring in income by managing side shows or rental properties. This is another way to retire early.

Readers: Do you have any suggestions for this reader? Add them in the comments below.

Have any questions about your own pension savings? Email us at HelpMeRetire@marketwatch.com.

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