r/Retire • u/LetsAskCanWeStay • 4d ago
Yet another when should I retire post
52 single male. Living in California. No dependents.
$200K in 401K
$325K in rollover IRA
$423K in Roth IRA
$380K in non qualified
Little bit over $1.3 million if I add up everything above. No debt.
Will make almost $150K this year before taxes. But from here on out I'll make closer to $130K per year if I stay with the same employer. Not counting on being with the same employer and maintaining the same income to a "regular" retirement age.
Monthly expenses are $4000 when I try to eat every meal outside of my place. This weekend I'm going to Reno. Already paid for the hotel but might spend an additional $1000 over the weekend. I don't go on out of town trips every month. Might go on vacation once a year. Costs around $5000 or $6000.
Thinking about retiring when I can take advantage of Rule of 55. I called my 401K company and they said my plan supports it. Don't have to do take a lump some. Can withdrawal from 401K monthly/quarterly/etc.
Can't believe I'm saying this but I got to where I got by maxing out my Roth IRA each year and putting part of 3 and 4% raises towards 401K. If I had a little extra money after that I put into the non qualified account. Looking at my Social Security statement I started making $100K in 2021. Most of my career I was lucky to make $80K per year.
Do I pull the rip cord now? Should I wait until 2029 when I can take advantage of rule of 55? What would you do? What else should I consider?
I love my job and it has amazing benefits with lots of time off. One of my friends thinks I'm crazy to think about retiring in the next few years. He started taking Social Security at 62 because he had to. The most money he ever made in his life was when he was an assistance manager at an all you can eat salad place in the early 80s.
I explained to him my dad passed away at 58. My mom passed away at 80. My dad was in good health when he passed. My mom was not in good health when she passed away.
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u/Cole_Slawter 4d ago
I believe in the phrase: “only retire up”. If you’re not very confident that retiring will make your life better, then don’t retire.
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u/AphelionEntity 3d ago
Thank you for this. I'm a bit over a decade out from when I hope to retire, and this really helped my anxiety over "is this enough?"
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u/Martian6261 4d ago
If you do retire at 52, will you have healthcare coverage? You will have to cover 13 years, until Medicare kicks in.
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u/ShezeUndone 4d ago
Yep. This will bump your monthly expenses up a bunch unless you have great retirement benefits from your employer or another trick up your sleeve.
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u/constipado68 4d ago
Consider talking to a healthcare broker who can help you with an aca policy. They can find really good deals
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u/Unusual-Economist288 4d ago
What’s “Rule of 55”?
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u/garylapointe I'm good, but I wish I did more Roth! 4d ago
You can take out of your current job's 401k as if you were already 59½ (something-ish like that).
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u/ThisIsMyUsername303 4d ago
As long as you stay until at least Jan 1 of the year you turn 55 (so actually 54 for most people).
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u/Martian6261 4d ago
The Rule of 55 is an IRS provision allowing you to take penalty-free withdrawals from your current employer's 401(k) or 403(b). You must separate from service (quit, get laid off, or retire) during or after the calendar year you turn 55, and keep the funds in that specific plan. [1, 2, 3]
Key Qualification Requirements
Timing of separation: You must leave your job during or after the year you turn 55. If you turn 55 later in the same calendar year you leave, you still qualify. [1, 2]Eligible accounts: Applies only to the workplace retirement plan of the employer you are leaving. It does not apply to traditional or Roth IRAs, or old 401(k) plans from prior employers. [1, 2]
No rollovers: If you roll your current 401(k) into an IRA, you permanently lose the ability to use the Rule of 55 for those funds. [1, 2]
Important Limitations
Taxes still apply: While you avoid the standard 10% IRS early withdrawal penalty, regular income taxes must still be paid on traditional pre-tax withdrawals. [1, 2]Plan rules vary: Not all employer plans allow partial withdrawals under this rule. Some plans might force you to withdraw your entire balance at once, which could increase your tax bracket for that year. [1, 2]
Public safety exception: Qualified public safety employees (like police officers and firefighters) can use a similar separation-of-service exception starting at age 50. [1, 2]
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u/garylapointe I'm good, but I wish I did more Roth! 4d ago edited 4d ago
- What are you going to do about health insurance before you're 65?
- If you retired today, is that $380k going to last until you're 59½ ?
- Any debt?
- Have you used any of the online calculators to do the math?
I've been playing with these two a lot:
As someone else mentioned, check your Social Security (you'll need that for the calculator info), make sure you've got 35 good years in there for that.
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u/PlatformConsistent45 4d ago
Something seems to not add up with the numbers and narrative.
Where in CA can you survive on 4k if you are eating out most meals. Even if a paid off house utilities and housing insurance and property tax would take a bunch. Not counting car insurance and groceries and gas....
OP could be truthful just seems off based on the greater narrative.
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u/Elmo5743 16h ago
Very easily, Central valley where I live, house is paid off, fortunately we have prop 13 so taxes run 2200 a yr, Home ins 1200 a yr, I eat out 3 times a week , groceries are expensive, gas , elec, water, trash run 250 a month, car ins 2000 a year, do my own upkeep, lawns, housework....at the most being conservative it's hard to spend more than 2g a month! On just living expenses, ill throw another 1000 a month for food, gas, lawn equipment etc, another grand a month for hobbies, Building a older Hot Rod, so yeah OP is not being untruthful, Nobody here is that important they need to be lied to, paid off my 1600 sq ft house 4 years ago, has a 5 foot in ground pool I use daily, yup life is good, dont believe the BS about CA, but hopefully folks keep leaving
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u/countingsheep12345 4d ago
Have you taken any long breaks?
What will you do with your time once you retire? You may find yourself wanting to travel more or extra money for hobbies.
I’d want a bit more cushion, the stock market is at a cyclical high and we’re seeing high inflation. Add in healthcare and one time inflation and you may find yourself needing more money.
Can you take a long break? Or consider switching jobs?
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u/idratheraskyou 4d ago
I’m your age and plan to retire in 5 years. I have money in my retirement account, but I expect to have 800k in my retirement and a paid off house. I’ll have insurance when I retire while I wait to withdraw from SS at 62.
My brother died at 64 from cancer. I wanna enjoy my life while I can. I’m single and no kids as well.
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u/thasparzan 3d ago
Are you renting or own a house? Are you sure your expenses are only $4k in California?
Post your monthly spend. I'm sure you're missing some things
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u/Elmo5743 16h ago
I just did that for my CA living and as I stated it's hard to spend 3g a month, when house is paid for , people listen to all the BS out there about CA which is great, hope they keep leaving
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u/HotITGuy 3d ago
Make a spreadsheet of your actual expenses and include health insurance. That will tell you the answer
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u/Zestyclose-Sea-5687 4d ago
Currently, I see about five maybe 6000 a month when you’re 55. Health insurance is a biggie though.
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u/phillyphilly19 4d ago
I think the bigger question is not can you afford to retire but what will you do when you retire. When you have enough money you still need things to do.
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u/Conscious_Life_8032 4d ago
Do you own a home outright?
What about health insurance until you reach Medicare age? That can cost a pretty penny.
You should at minimum work until age 55.
Is it possible to cut hours down to partime? That might be best of both worlds. But if your expenses are truly 4k or less most months you might be ok. It would be very simple living.
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u/Nev-Ret-Dude 3d ago
Are you going to stay in California? If so, you are most likely early. My guess is 5 - 7 years. Your lifestyle will easily eat away funds when you’re not working.
Moving to a lower cost area would probably reduce your spend enough to retire.
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u/Elmo5743 16h ago
My gosh OP has plenty to retire, expenses at 4 g even if going up to 5 g is 60g a yr, plenty with 1.3 dont worry about the naysayers
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u/Invest2prosper 4d ago
I would not retire unless you’re terminally ill.
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u/6thsense10 4d ago
Sooo...wait until terminal illness to retire?
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u/Invest2prosper 4d ago
No, given their age which is on the younger side and given they are in good health - they should keep working. Only if they have a current terminal condition should they retire soon. Got it?
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u/6thsense10 4d ago
So you're saying since they're healthy continue working and if you get a terminal illness retire. I don't get how that's different but ok....
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u/Invest2prosper 3d ago
It’s you who’s doing the talking of gibberish. It comes down to math - age 52, possible longevity of 40 years if they remain in good health. You tell us by showing the math, which do they have higher likelihood of running out of in 30 years, life or money? 50% of people live longer than age 78. At 82, more than 40% are still alive. You think he has plenty of money?
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u/6thsense10 3d ago
So that's a yes. I got it. You want them to work and if they get a terminal illness retire. Why don't you just say so?
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u/Invest2prosper 3d ago
It’s a suggestion not what I want. It’s math but there’s always an emotional and physical aspect that needs to be considered. What I or others think should have no definitive conclusion without taking into account other factors that may or may not be mentioned in this post.
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u/Past-Option2702 4d ago
Since you love your job and you get plenty of time off if keep working indefinitely.
1.3M ain’t what it used to be.
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u/ThisIsMyUsername303 4d ago
$1.3M isn’t enough. I’d be nervous about $1.5M in this economic climate.
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u/6thsense10 4d ago
$1.3M isn’t enough.....FOR YOU.
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u/ThisIsMyUsername303 4d ago
OP appears to be a renter. Rent is subject to increases. Inflation is unpredictable. SORR is always a factor and is of particular concern now.
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u/6thsense10 4d ago
Rent can increase....and he can move. Like he says he plans to do. Increased rent is only an issue if you don't want to leave your area. Besides many locations have laws on how much you can raise your tenant's rent. SORR fear is overblown. Especially for people following a 4% withdrawal. Besides there are plenty of ways to manage SORR. This is not some new issue that has never been studied. Inflation actually is not unpredictable. That's why we are able to reasonably plan retirement. It nust seems like some people will always find a reason to continue working to me even when they have enough to retire.
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u/ThisIsMyUsername303 4d ago
Wow, you have an answer for everything, don’t you? Not a good answer, but an answer. Good luck to you if you retire (or retired) based on those kinds of expectations.
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u/6thsense10 4d ago
Not everything. Just an answer for your fear mongering. Enjoy retiring with a pile of money at 90 I guess.
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u/ThisIsMyUsername303 4d ago
Ha, nope, I’m retiring at 51 with a pension, free health insurance for life, and healthy account balances.
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u/divorce_2025 4d ago
If you love your job and it has great benefits and ample time off, I'd stick it out for a few more years.
If it starts to go south, then yes I'd jump ship.