My wife and I have $ 7,000 pensions, $ 140,000 in cash, plus $ 3,500 in social security. Can we afford to retire?

I’m considering retiring at the end of the year. I am married and will receive two monthly retirement payments; $ 3600 from military service and $ 1,500 from civil service. Our total estimated monthly price of life will be covered by them, making our $ 3500 joint social security income completely once for savings, travel, etc.

I don’t have much savings, only about $ 140,000 between cash savings and a savings plan. Our shared home for home will be just over $ 7,000 every month and after taxes, medical, dental, vision and life insurance costs, our total cost of living will be around $ 4,000. My wife will be 65 years old in January and I will hit this age 13 months later.

My 20 -year -old wife is a Japanese citizen and lives in the United States as a permanent resident. She has not worked in the United States and has not had enough working years in Japan to qualify for her social security. Her only income, after retiring, will be the spousal benefit of my social security. I will enroll my wife in plans for survival-Poland for my military pension and annuity at the civil service.

They, combined with the increase in social security, will give her about $ 5,000 a month if I predispose my wife, plus a one -time life of $ 240,000. She will also receive spouse benefits based on my work record while I’m still alive. Because of my military service, we have TRICARE to cover the costs of Medicare.

We are both reasonably healthy. I think we are good to retire financially. What is your advice?

Consideration

Related: I’m 75 and I have the opposite mortgage. Do I have to pay it with my $ 200,000 savings – and instead live out of social security?

My answer falls on the edge of the razor. Military service can take much more fee physically and mentally. You deserve this time.

I have a theory of your letter. You put a lot of hard work and a proper check in your military and civil career and put the same attention to your decision whether to retire. The answer, of course, is yes, you can support yourself and your wife in retirement, given your pension and social benefits, which are based, I suppose that you settle for less than your full social security income, claiming them before the age of 70. If you can retire and delay to request your social security, even better.

I would usually urge people to hang until they are 70 before requesting social security, especially if they are healthy. Increasing the cost of living will be eaten in your income over 30 years. Moreover, you and/or your wife may need long -term care. But you and your wife have more than 40% of your total monthly income after payment of all your basic expenses. Your wife will take advantage of spouse benefits while you both live, and surviving benefits if you die in front of her.

Given that you have been married for 10 years, your wife will qualify for 50% of the value of your social security, even if she has not worked and/or has worked only for a limited time. She will receive 100% of her social security benefit of full retirement age, which is 67 for anyone born in 1960 or after, and will receive a smaller amount if she wants at any time from 62 years to full retirement age. If you wait up to 70, your wife will receive approximately 8% more per year.

Two years of cash costs are often recommended for retirees, but I wave an amber flag: you can still be left a little stretched in case you need money to maintain your home or other unexpected expenses. Most retirees with IRAS and/or 401 (K) S want to have a cash pillow to avoid the drawing of their investment accounts in the bears, such as those of 2000-2002 (Tech Bubble) and 2007-2009 (mortgage disaster).

You will not worry about the tides of the stock exchange like the millions of Americans who approach the retirement age by 401 (K) or IRA, given that you have a guaranteed, fixed military and civil pension. This is a huge weight from your mind and you have to give you confidence when you finally decide to hook your work boots and enjoy all your time together, which I hope will include traveling and discovering new hobbies.

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For those who will benefit from investment, T. Rowe Price recommends that pensioners have a portfolio composed of 60% shares and 40% bonds, which are restored from the aforementioned bears within two years. “The exact amount you want to have depends on your risk tolerance and the amount you save,” she adds. “Another advantage of perceiving a balanced approach is that during the bears and bonds market, they are rarely respected at the same time.”

Much can be said about the benefits of a military pension about your investment strategy and tranquility. “Having more guaranteed income means that you will not have to withdraw so much money from your investment,” according to First Command, a broker-diller based in Fort Worth, Texas. “This can affect the way you decide to allocate these remedies, potentially allowing you to focus less on short-term liquidity and more on long-term growth.”

“Your military retirement income can also give you more opportunities when it comes to building a budget,” he adds. “An approach to be taken into account is the use of guaranteed sources of income – such as a military pension and social security – to pay for your fixed expenses and to use income generated by your investment portfolio for payment of discretion. The idea is simple: to match the fixed costs for fixed sources of income and variables for variables

From you all three main sources of income-guaranteed (pensions), variables (investments) and one-time (inheritance or one-time payment from a former employer)-your largest source, fortunately, is guaranteed. This is a nice place. “If your expected costs significantly exceed the expected income,” says First Command, “it may be a sign that you need to make adjustments to your goals or press the planned retirement date.”

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But here’s a summary to know what was set by asking for social security early. You receive 100% of your full retirement social security benefit, which is 67 for anyone born in 1960 or after, and you receive a fewer amount if you claim at any time from 62 years to full retirement age. If you wait until the age of 70, you get approximately 8% more per year. Some advisers say it can be approximately the same, whether you start taking your advantages at 62 or 70.

As you suggest, your wife, even if there is no work report or right to compensation for her own employment document, has the right to receive one third in half of your social security while you both live, according to the Social Security Administration. The benefits of the survivors are more worked. “Widow is eligible for between 71% (at the age of 60) and 100% (at full retirement age) of what the husband receives before they die.” You can learn more here about such benefits.

The financial argument suggests that people should delay their social security benefits as long as possible, especially if they are in good health as you seem. Almost all workers between the ages of 45 and 62 have to wait up to over 65 years to collect social security, according to this working document from researchers at the University of Boston and the Atlanta Federal Reserve Bank. More than 90% of people have to wait until they reach the age of 70, but it seems that only 10% do it, they added.

To put this in a context for your retirement: claiming social security early reduces the lifelong discretion of $ 182,370 for the average worker approaching retirement, the document concluded. “Optimization will increase 10.4% of typical costs for workers’ workers,” the researchers wrote. “For one in four, lifelong profit exceeds 17%. For 10 profits exceeds 26%.” But not everyone has a combined pension of $ 5,100.

The longer you can wait, the better. There is no big hurry to retire tomorrow. This seems to have a powerful case to wait to ask for your social security benefit, but this is not obligatory for everyone, “adds First Command.” For those with health problems, there may be more meaning to claim their benefits early. And those who need social security.

You both know your own lifestyle. If you feel 100% ready, continue.

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Previous columns from Quentin Fottrell:

“She was acting like a mother for me, growing up”: my stepmother married again after my father died. How can I claim my inheritance?

“My wife and I are very grateful”: Our son wants to pay her mortgage before we retire. Will this back be?

“Is this ethical?” I want to leave my home for my children from my first marriage – not my second husband.