It sounds like you 2 have done a wonderful job with your finances over
the years. I love hearing about happy couples who will get to enjoy
retirement together without worrying too much about cash.
I think Finance Guru (FG) did a decent job of explaining some things,
but I'll throw in my 2 cents... maybe even 3 cents if you're lucky :)
To start off, you don't want to be risky at all with your investments
at this point. You have plenty saved to have a good living during
your golden years as long as you don't lose it. So I highly suggest
you move to safer investments. You said 50% is in energy stocks...
that has done fabulously over the last few years, but that could
change at any time. I'd hate to see you lose 20% of your portfolio
should the energy market collapse. At your age you should be mostly
in bonds; I suggest 50% mild to safe corporate bonds, 30% government
bonds, and 20% stocks (that's where you can keep some energy stocks if
you want or it might be better to diversify your stocks).
You have $650k now and you're still investing. If you can continue
investing $10k per year until you retire (2010) then don't touch your
investments for the next 5 years until Jill retires (2015) then you'll
have about $1.2Million at that time (assuming 6% interest which is
very realistic considering the portfolio I mentioned above).
Here are my assumptions:
-You will earn about 6% in the portfolio I mentioned above
-You will receive about $2000 per month in social security (I think
that is a very low estimate, but I like to underestimate income and
overestimate expenses to be safe)
-You will live to be 100 (better to plan and be safe than to regret it)
-Inflation will be 3% per year
With $1.2 Million remaining in those same investments for the rest of
your life, you can take out $6,000 per month starting in 2016. Even
better, you can increase your withdrawal with inflation (ie in 2017
you can take out $6,000 * 1.03 = $6,180), and be just fine. In fact,
you will still have about $2M to give to your favorite charity when
you pass away at the lovely old age of 100. If you'd like to run out
of money by the time you're 100, you can withdraw $7,000 per year (and
adjust it for inflation yearly).
If you're accustomed to a higher standard of living than this then you
might consider working a couple more years before retireing to make
sure you'll live comfortably.
Some other things to consider:
-Definately have a will. If you care at all where your money will end
up beyond your years then this is very important.
-Consider long term care insurance. This is very expensive insurance
(possibly $250 per month at your age but I'm no expert on the matter)
but it could save your fortune. I recently read that 40% of people
who are 40 today will need long term care some time during their life.
Regular health insurance doesn't cover long term care, and it can
easily add up to many hundreds of thousands $$$ should you require
that kind of care.
Some fun activities you and your wife might enjoy:
-Snow tubing. Perhaps the years for skiing and snow boarding have
passed, but snow tubing doesn't require nearly as much effort or risk
of getting hurt... while it provides the great pleasure of gliding
over the snow and having a great time.
-Boating. Maybe an extra few months of work would be worth your time
to buy a decent motor boat & trailer. You can go out for many hours
several times a summer to enjoy the scenery, relaxation and enjoyment
of being out on the lake
-Cruises. I know my parents take alot of cruises now. They find good
deals on EBay (they are surprisingly affordable if you are a little
patient in finding them). Go see the world, you might want to start
with the popular Carribean... then maybe work your way over to an
Alaskan cruise or even a Mediteranean.
-Find something you enjoy together and feel productive doing. I know
a retired couple who buy houses, repair them and either lease them out
or sell them. They really enjoy the work (it can be alot of work or
you can contract as much of it out as you'd like), and it provides
them with a bit of money too. Make sure you understand the housing
market well if you want to jump into this particular hobby.... but
that's just 1 example. I'm sure you 2 have many skills that can keep
you busy if staying busy is a desire.
-Be active in a community. If you're in a small town, be sure
everyone knows you. Go out, talk to people. Go to all the local
events and call everyone you know to make sure they go too. If it's
not such a small town then find a group (church, non-profit group,
quilters club, yoga class...) some people to call your friends who
know you and enjoy your company. The more interaction with people the
better.
I hope my thoughts are helpful. Feel free to ask any questions about
the money or the activities, I'm happy to help all I can. I do wish
you guys the very best in your years to come! |
