Help Me Retire: I lived in motels and ‘forgot to live’: I’m 48, have almost $900,000 and want to retire next year. What can I do?

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Greetings,

I am 48 years old, single and have lived in various states and done diverse jobs. 

Genetically, I foresee my life span being around 20 more years, as I lost my parents at a very young age. In this 15 years of career, I never owned a car or home. I lived in sharing places and motels.

In a year, I am planning to retire and to focus more on spirituality and health. I have a CD with around $150,000 locked for five years at 3.30% and two CDs with $248,000 each for one month. In my 401(k) I have around $160,000, and other savings around $40,000 (from my previous employer) in a cash-balance pension plan, which I can take any time — $160 per month for my lifetime or a lump sum of $40,000 to roll over to an IRA. 

I see life is short and I forgot to live myself, and want to make the rest of my life on this planet enjoyable. I am not a high-risk investor. I expect Social Security at 62 years old to bring around $2,000 per month. What is the best plan for the next 13 years?  

See: I retired at 50, went back to work at 53 and then a medical issue left me jobless: ‘There’s no such thing as a safe amount of money’ 

Dear reader, 

Congratulations on having so much in savings, especially considering you’ve moved from place to place and taken on various jobs — that’s a great accomplishment. 

You’re certainly not alone in wishing you had enjoyed life more when you were younger. Many people, like you, try to strike some sort of balance between living in the moment and paying for the necessities now and in the future. Unfortunately, that means you’ll have to take into account just how long your money can stretch and if it may be worthwhile to keep earning an income in some capacity. 

First, you need to think about what your annual income needs to be in retirement to meet your cost of living, plus any emergencies, such as a health crisis or an unexpected move. Also, ask yourself what your own plan is for this money. Are you just trying to make it last until Social Security kicks in, or are you intending to see this money last your lifetime? You say you expect to live another 20 years because of your parents’ lifespans, but is there anything else that indicates you’ll live to around 68, or is there at least a chance you’ll live longer? These are all very important questions you need to address to see if retiring next year really is a good idea, said Brian McGraw, a certified financial planner and senior wealth adviser at Hightower Wealth Advisors. 

You’re not wrong to want to enjoy life. So many Americans work so hard, every single day, to make ends meet, and it can be emotionally, mentally, physically and spiritually draining. But if you’re able to find something that doesn’t feel like such a weight on your happiness, and it brings in an income, you may want to consider remaining in the labor force just a bit longer. There’s an added bonus if the job comes with any benefits, like health insurance, since you’re not eligible for Medicare until you’re 65. Private health insurance can be quite expensive, and having no insurance is a financial and health risk. 

Running the numbers really helps put all of this into perspective, McGraw said. “In many cases, a ‘hybrid’ retirement where the client scales back to a part-time employment situation to keep some income rolling in to support their lifestyle while gaining additional free time can be an effective compromise for the client who wishes to retire early but the numbers simply don’t support their spending goals,” he said. 

There are so many different types of jobs out there, and if you’re looking for some freedom, you have a whole world to explore. You may want to put your skills to use, or develop new ones for a job that aligns with your passions or hobbies. For example, someone who loves to ski might want to try and find a job at a ski resort or in a mountainous region. Someone who prefers to be by the beach might move to a seaside town and find an agreeable gig there. A person who loves cars might find an opportunity at an auto shop, and so on. 

Retirement may be the final goal, but you might find you’re happy just switching gears. “He should figure out what he likes and see if he can make a living at it,” said David Haas, a certified financial planner and president of Cereus Financial Advisors. “Maybe his goal shouldn’t be retirement, but doing something that he loves and making enough money at it to live his life.” 

Want more actionable tips for your retirement savings journey? Read MarketWatch’s “Retirement Hacks” column

I also suggest you create an online account with the Social Security Administration if you haven’t already, so that you can get a better idea of what you can expect to receive in benefits at 62, at “Full Retirement Age” or later. I know you mentioned you expect $2,000 in benefits every month beginning at 62, but it never hurts to double check that … especially if you are planning your future around that figure. 

Take, for example, the average Social Security benefit for retirees, which was $1,620 in April, according to the Social Security Administration. AARP estimates that someone born on Jan. 1, 1960 (so, a 62-year-old), who earned an average of $50,000 in income every year would get a monthly benefit of $1,338 if they filed for Social Security at 62, $1,911 if they waited for Full Retirement Age at age 67 and $2,370 if they waited until age 70, which is the age when someone can receive the maximum in benefits based on their personal factors. 

If you don’t expect to live more than 20 years, you may not want to wait until Full Retirement Age to claim so that you can see the benefit you worked hard to contribute to, but the Social Security Administration will use your earnings history to give you a clearer estimate of your future benefits. You can create an account here

Ultimately, your plan will come down – at least in major part – to your spending, said Kristin Pugh, a certified financial planner at Creative Planning. You have the most control over that, after all. She also reiterates to her clients that “good health is the best insurance.” 

Also see: ‘This is a daunting time to retire’: In the age of inflation, there are steps you can take to deal with higher prices 

You might also want to consider working with a financial adviser, if even only once for a financial check-up, to see if your money is allocated the right way and to help build a financial plan. I know you said you’re not a high-risk investor, but CDs usually do not generate the same types of returns as a properly invested portfolio could over time. The markets might not look particularly attractive these days with so much volatility, but a professional can determine your time horizon, a reasonable risk profile and other factors that can stretch your money over time.

They will also look at how to protect your assets against rising inflation, which is diminishing Americans’ purchasing power. If your money isn’t growing at a healthy rate against inflation, you’ll lose more of it over time, even if you’re spending the same amount of money on just the necessities. 

“It’s important to have a financial plan and be flexible enough to change as your world changes,” said Sean Pearson, a certified financial planner and associate vice president with Ameriprise Financial Services. “In addition to regular retirement income, it’s important to have a plan B for additional expenses,” he added. 

An adviser can also help you make sense of how much you should be withdrawing from your accounts each month, if it’s better to do the monthly payments or lump sum rollover into an IRA from your cash balance pension plan and the tax implications of all of these decisions. 

“If you feel confident that you’re doing enough to save for your longer-term  goals, like retirement, then you can and should get to enjoy life in the moment,” said Brittany Mollica, a certified financial planner at Hilltop Wealth Advisors. “We’ve seen people retire in their 60s and immediately get sick and not get to enjoy retirement, so that’s why I think it’s really, really important to not wait to enjoy life. There’s just a good balance to be found between the two.”

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

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

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