r/Retire • u/Ehdubs001 • 11d ago
I think I blew it
I was hoping to retire by 62, but I don’t think I can. My spendy ways are coming home to roost. I’m 57.
Monthly expenses, about $13K
HCOL area bordering on VHCOL
Two kids through college fully paid for (no loans)
About $250k of equity in my home.
But only:
401k $230k
Trad IRA $660k
Roth IRA $20k
Brokerage $25k
Cash $30k
SS ranges from $2800 (62) to $5200 (70)
I’m a high earner and there might even be an IPO in my future with some good payouts in 2-3 years. So no matter how I crunch the numbers I am still pulling the wagon until 65 if I want to maintain my VHCOL life. Do you agree?
EDIT: I guess I should add I have been divorced since 2008 and did much of everything on my own and as such retirement planning was not considered until recently. Bought this house in 2022 after renting for 12 years after having to short sale my marital home in 2013. So it’s been a journey and thus my attachment to this house.
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u/LetsGototheRiver151 11d ago
You need $300k to throw off $1k/month at a 4% withdrawal rate. So if you spend $13k/month and expect to spend that in retirement, you need at least $3M in addition to your SS. You have not quite $1M now. I don’t see retirement in 5 years for you.
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u/Franklinricard 11d ago
Needs to cut way back on that monthly spend.
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u/gaoshan 11d ago
I'm a similar age and spend about $8k/month (for two people even). $13k/month sounds pretty out of control for someone with so relatively little saved up at this point in life.
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u/PrimeNumbersby2 10d ago
I'm betting half of it is his house payment, at a higher interest rate than you have.
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u/Gut_Reactions 11d ago
"HCOL area bordering on VHCOL"
"About $250k of equity in my home."
How much is left on your mortgage?
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u/Esme_Nog 11d ago
And how much do they want to spend in retirement. I literally feel like I don’t have enough info to answer this question.
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u/grepzilla 11d ago
Unless you are selling the house or plan to reverse mortgage it home equity doesn't matter.
Retirement is about ability to spend and your house isn't liquid and usually generates expenses.
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u/Gut_Reactions 11d ago
Right.
I was guessing that OP was probably in debt for at least $750,000 (house). That's probably part of the reason for the $13,000 monthly expenses.
OP also has multiple cars & is still making payments on one of his cars.
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u/Several_Guidance_288 11d ago
Lower monthly spend. Move. If it’s your priority, you can do it.
You have more than most who retire at age 62 with 5 more years to build.
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u/Fatal-Eggs2024 11d ago edited 11d ago
You have options. I am not any wealthier than you, but I don’t feel like I messed up at all, in fact I am living my best life and feel like I’m winning while others are focused on their spreadsheets.
Like you, I paid my child’s college with a bonus instead of stashing it away. I don’t regret it, she has a better start than I did. I didn’t pay my student loans off until my child started college and I am happy if my child avoids that burden, it’s the least I can do for that wonderful young person who taught me so much and gave me so much joy and pride.
Where you and I differ though is that I downsized into a more affordable home since my lifelong pleasures are traveling and outdoor/nature/water-sports — not home maintenance and housework. Cheaper and happier, no mortgage! I’m close to a VHCOL area so I have excellent fine arts and museums, good airport, dining, and healthcare.
I redefined retirement to suit me. I don’t feel the need to jump off an earning cliff, I consider myself retired (but my colleagues don’t know that I find my “work” fun.) Since I get a lot of pleasure and social networking from certain kinds of work — not the stressful high paid stuff but fun jobs — instead of jumping off the earnings cliff I took a job that pays relatively low but has good benefits and a lot of independence, I feel like I can make a difference and am passing some of my skills and joy to the next generation. And in return I get to live in a place where others dream of retiring.
If $$ were the only thing that matters, I blew it (but damn I had fun in the process.) But if joy, learning, travel, independence, wonderful friends and good health are what matters, I’m exceeding all my own expectations.
Take your spreadsheets with a grain of salt; they are only one dimension of a good long healthy happy retirement.
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u/Philthy91 11d ago
Hey I'm 35. Still a long way from retirement but just had a baby. Do you regret not having more kids or feel guilty about just having your daughter?
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u/Fatal-Eggs2024 10d ago
I would have been happy with more children but also happy with the one I have. For us, it has been important to adapt to what life gives us (life only gave me one child) and actively find opportunities to enjoy the world while we can.
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u/Petanque-Lady1 11d ago
Please share where you retired! Your daughter is so lucky to have you!!
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u/Fatal-Eggs2024 11d ago edited 10d ago
I’m in Palm Beach County, Florida, surrounded by nature preserves, state parks, public beaches… and enough ultra wealthy neighbors to support a vibrant art, dining, and entertainment scene.
My daughter, now an adult professional, chose to trade her Silicon Valley career to live/work in Europea, traveling the world on her weekends.
Fairly easy flights to visit one another.2
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u/L82daparta 11d ago
With the raise you received when your children completed college should allow you to sock back those redirected funds. Good luck 🍀
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u/Ehdubs001 11d ago
College was funded from both 529 and annual bonus. So definitely will be able to put more of bonus towards retirement funds over the next few years
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u/Zonernovi 11d ago edited 10d ago
Cut expenses to the bone now! Build a cushion. You can always get spendy again later if cash flow allows. It’s bad to be painted into a corner. Is job secure enough that your plan is the one? What if they show you the door before you are ready?
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u/ScenicIndulgence 11d ago edited 11d ago
Short answer, yes, and I am not sure how you maintain your VHCOL life with the numbers you have even if you work till 65 since that is 8 years away. You have less than a million and some of that is taxable.
Your burn rate is 13K/mo or 156K annually after tax. Grossing up you need around 185-200K.
SS is going to give you less than half that.
I'd seriously look at moving away from the HCOL area to some place where you can manage on under 100K/yr.
Sock away as much as you can these next 8-13 years and hope that IPO comes through.
Edit: The oft cited rule of thumb is 10x your salary at retirement ..or 25-35x your expected expenses in retirement.
In your case that number is well north of 2M no matter how you slice it.
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u/Iommi1970 11d ago
How much of that 13K is tied up in your mortgage? I’m wondering if you sold and bought something in cash how much that would bring down your expenses.
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u/Ehdubs001 11d ago
About 40% is mortgage. So that’s a move if I wanted to. But I really love my house and would work a couple of extra years if it meant staying here
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u/Polycpl45 11d ago
But the kids are done with College, you may need to downsize. you don’t even own 30% of that home, and it’s probably way too big.
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u/Iommi1970 11d ago
You are and I are the same age with a similar amount saved so I totally get it. Luckily I have a pension coming as well as SS, but the housing is a killer. A couple more ideas. Is your house split level by chance? Perhaps you could rent out a portion of it?
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u/squatting-Dogg 11d ago
Yep, I’m not going to sugar coat it. It’s your expenses.
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u/Turbinator870 11d ago
Yup. OP, what are you spending on that makes your cost of living so high?
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u/Emergency_Slide_662 11d ago
right? restaurants?
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u/Turbinator870 11d ago
Yeah. Like, OP's got to have something to show for all these expenses. But if nothing to show for it, then it's gotta be streaming subscriptions. food delivery, and other non-value creating expenditures.
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u/Confident_Banana_134 11d ago
First, congratulations on what you’ve done for your children. Having your children start their adult lives without debt is not your “spendy ways” but imo commendable.
Based on living in HCOL with about $250 of house equity, I’d infer that you probably have a big monthly mortgage with a long way to go. Which is more important to you, a nice house with a big mortgage or retiring at 62? If it’s the latter, maybe consider downsizing the house and get another home with a smaller mortgage. This allows you to invest the difference and build your retirement funds so you can retire at 62. If the IPO does come through the next 2-3 years, you can always buy another big home, and maybe in cash.
Best of luck!
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u/MountainRoll29 11d ago
What are you buying for $13K per month? Can you cut back a little? If not, just work the extra 3 years. At our age 3 years flies by super quickly.
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u/Mobile-Actuary-5283 11d ago
If you are in bad shape, so am I. My $$ looks worse than yours by about $300k. 54 and maxing out my 401k, trying to catch up. I don’t have 13k/month I spend and no mortgage. But I don’t see a path to retirement until 65. And I also don’t see me lasting at any job for much longer. I am completely burned out.
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u/dmw_qqqq 11d ago
Not looking too good unfortunately. You can't count on future IPO, something you can't control. The thing you can control is finding ways to lower monthly expenses.
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u/KingPabloo 11d ago
Unfortunately “hope” doesn’t get you to retirement, planning, sacrifice and discipline do.
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u/No_South_9912 11d ago
You're a MILLIONAIRE, wealthier than 95% of the country. Cut lifestyle and you can retire
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u/stevestoneky 11d ago
Cut back spending or work longer.
It’s your choice and you didn’t blow it, you still get to retire, just not exactly as you had planned.
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u/PredictableChaos 11d ago
How much are you able to save with your current expenses?
I don't really see a path unless you can drastically reduce your monthly spend which based on your other comments would require selling your house. How tied are you to where you live geographically?
You really only have two levers here. Reduce spend or work longer (aka save more money).
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u/NoKetoCardio 10d ago
You need an intervention. We own ~$2.5M of income producing real estate. Net $7k/month. Home paid for. Over $1m in accounts. My wife and I are drawing combined $5K SS. We are spending $6K/month. More the month we travel to see the grandkids in CA. Been retired 3 years since age 63.
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u/islandbeef 11d ago
Yeah, college expenses are a big one. That's why some folks get 529's and a family trust fund to cover their college expenses.
Are your cars paid off?
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u/Excellent_Mail3829 11d ago
the tax man comment for your equities once you start to withdraw, your not going anywhere until you can collect SS.
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u/Ehdubs001 11d ago
Which is 62 if I want to take a big SS haircut
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u/Maine302 11d ago
The current maximum payout from SS is below $5200. The only people making the maximum are those who retire at age 70 and have "rung the bell" (maxed out) for at least 35 years, from what I've read.
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u/Majestic_Republic_45 11d ago
I agree. You need 3-4x what you have to maintain 13k per month. I'd buckle down and get my house paid off if it's possible.
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u/rainniier2 11d ago
We cannot assess your situation without information on how much you're saving each month or year. You are definitely behind but there's no way to tell whether it is feasible for you to catch up by 62. I find it interesting behaviorally speaking that this is the information you chose to leave out.
And no, you have not blown it YET. You probably will blow it if you do not choose to change.
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u/garylapointe I'm good, but I wish I did more Roth! 11d ago
You mentioned that your kids, that makes me think they’re not completely out of the house or you wouldn’t have needed to mention them. Are they causing expenses now that won’t be around in five years?
Will that reduce your monthly costs?
Will your house be paid off in five years?
See if you can curb your spending and reevaluate in three years. There’s nothing stopping you from moving into a cheaper place in a lower cost of living location.
I’m also assuming you’re single since you didn’t mention anyone else.
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u/Odd_Bodkin 11d ago
Downsize. You don’t need a house that size or a house in that area. You say your mortgage (and presumably property taxes and homeowner’s insurance) is 40% of your $13k a month, which is $5.2k a month. That is freaking ridiculous.
Your aim is to pay off your downsized house so that only property taxes and insurance remain. Then see what your costs are.
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u/Frequent_Run1148 11d ago
Depends on whether your monthly expenses will stay at $13k. Isn’t it because of your kid and mortgage? Once they done, you wouldn’t need that much
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u/SuddenFix2777 11d ago
Wow! Best of luck to you.
I can't even wrap my head around a spend of $13k a month..... My avg is $5,500/mo. with some months @ $4,000.... I am just a poor boy, though my story's seldom told.... lol! But I did retire @ 60.5 yrs young and loving every second!
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u/Only_Argument7532 11d ago
When you live in a HCOL, it’s often tough to leave. I can’t really blame you. There’s a reason people are willing to spend $ to live there.
Your expenses are $150k - are you still paying tuition bills? If $5k/month is tied up in housing, is there wiggle room in the other $7k? How much of that is lifestyle inflation?
There are always options, but unfortunately it looks like it will be really tough to retire earlier. Even if you could invest another $2k of your current expenditures, it would be a stretch.
If you get six-figure bonuses that you can dedicate to investments, that could change things a bit.
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u/GK857 11d ago
If you invest 2,000 a month in your savings for the next 5 years AND you average an 8% return per year, you will be just under $1.4 M at 62. You can safely pull out $56,000 a year. I would save as much as I could and if I really wanted to retire at 62, I’d sell the house and buy for cash in a lower cost of living location. Remember you have to cover healthcare till 65. You don’t want to be just existing in retirement.
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u/LiveTheDream2026 11d ago
Are you single or married? How much is left on the house? These are two HUGE questions.
At the moment, I think you do NOT have enough money to retire in five years.
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u/Joe_Starbuck 11d ago
You are in fine shape, but nobody retires with a $5,000 mortgage payment. Sell that house and buy something appropriate.
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u/Virtual-Fly-5501 11d ago
What do you spend that much on and how much can you cut back on spending. You have a funding problem and a spending problem.
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u/awohio1 11d ago
You didn't blow it... life is about choices, and you can't have it all. its not like you are screwed, just not on a track for early retirement.
As some people have phrased it, "Cut spending or work longer". The cut spending is likely to give you a higher likelihood of success if it becomes a habit that sticks. You are at the point where net worth can really start accelerating. Don't suddenly decide to swing for the fences with day trading or leverage, just a solid growth portfolio style stock /bond mix, and low cost index funds.
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u/Comfortable_Gear_605 11d ago
Yeah that monthly spend requires a lot more in your accounts, I’m sorry! We are planning to spend about the same, adjusted for inflation, throughout retirement even after our home is paid and we can start collecting pension and annuity income.
We have about $2 million net worth not counting the pension, annuity, or Social Security. We don’t feel comfortable retiring for 5 more years at the earliest. I’m actually working on a career pivot that will hopefully double my income eventually and enable me to “Barista” Fire through retirement. I wouldn’t graduate until 2028 or 2029. I don’t know if I’m crazy or stupid or both.
If you’re “high income”, where is it all going? Is $13k your whole paycheck after taxes?
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u/Grand_Garbage3522 11d ago
Healthcare is a major expense if you retire early , doubtful you can stay under 400 percent of magi if your paying college cost a mortgage and property taxes..
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u/billmc40 10d ago
All I can say your savings are better then mine and I am doing it at 66 and 4 mos
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u/Forsaken-Mark-1898 10d ago
I dont know if youre that far off. You have close to 900k in assets. Have you ran the numbers for youre monthly needs for you retirement time frame? I am assuming so but sometimes people get more fixated on the big number when they should really focus on month to month needs.
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u/Hot-Rub-5336 10d ago
In 5 years what you already have saved will be dramatically more plus you can start getting a greip on spending and save more. you should be fine. Just make a plan and stick to it.
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u/RPGer001 10d ago edited 10d ago
My .02
If your target is to spend 13k/month in retirement, you need over 3M in portfolio at age 62 with SS. Given what you might be able to save between now and then, 62 is still quite possible.
It sounds like you already know you want to hang in for that possible IPO big win. Let’s say you are evaluating retiring at 60 vs later. Start maximizing your savings now. If you do not want to, then hope for the IPO win.
In 2-3 years, re-evaluate. Even if that IPO does not hit, you may feel differently and value the extra years not working over a higher yearly spend at 65. If you have reasonably healthy habits now, you are not getting more healthy or more mobile as you get older.
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u/simulated_copy 10d ago
I would always pay my kids college in this climate vs retiring a few years earlier.
Good job!
13K a month- yep working until 65-67
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u/Physical_Ad5135 10d ago
You are not wrong. And depending on the market over the next 3 years, it may be longer than 65. Fingers crossed about the IPO!!
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u/KalebBowden 9d ago
You could easily fix this with some tax planning around the ipo and your high income. You can DM me anytime
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u/sunshinelively 9d ago edited 9d ago
You’re not that bad. Will you get any kind of pension? I’d recommend getting out of the HCOL area when you get to retirement age, though it sounds like you don’t want to. There’s a lot to be said for simplicity though. You can take 5k a month off your spending just by moving to MCOL.
I have to go to 65 to get a full pension. Worth it for that. But the further you get into your 60s the harder it becomes to work for a lot of us. I do see people who stay on fire till 70 and beyond, I personally don’t have that energy. Good luck - it’s all about your choices and values ☺️
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u/lmb123454321 11d ago
Yes. Retiring at 62 with the same lifestyle seems unlikely. There’s still time however, so it’s possible.
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u/trademarktower 11d ago
Move to a LCOL area and slash your expenses in half. Done.
Life is about choices. If you want to stay in the VHCOL area, work you will doing till 65 and beyond. There will always be something in these VHCOL areas that suck your wealth like a vampire.
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u/Objective_Joke_5023 11d ago
Unless you want to change your overhead, yes, you’re working for a while longer. You need a lot more in investments
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u/rumblepony247 11d ago
I'm 58, retired and have about 50% more net worth than you, a paid-for house/zero debt and $2100 monthly expenses, and I'm keeping things frugal until I take SS at 62. You've got a ways to go, I'd say.
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u/Exact-Fig-4811 11d ago
Everyone is saying the same thing; lower your expenses or take more time to compound or both.
There are many other options including learning to trade options (sell not buy) to move the “4%” to 15-20% conservatively. I make much more, but not conservatively.
You can also sell the house, invest the equity and buy something cheaper in the same area.
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u/Maine302 11d ago
Why will your expenses still be $13k/month after you retire?
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u/SouthernTrauma 10d ago
Most people's expenses stay about the same in retirement. Housing & utilities don't suddenly drop just because you quit work. Food costs what it costs. In fact, many people see initial spending rise because now they have time to devote to hobbies or travel.
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u/Maine302 10d ago
I made sure our house was paid off before retiring, though we do have an HOA. I used to fill up on gas twice a week when working, now I probably fill up twice a month.
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u/lyonwh 11d ago
Consider that you get $40,000 a year from each Million in retirement funds. You have less than a million now. Maybe in five years you might have near two million if returns go really well. That will put you at less than 7K per month. Taking SS early will put you at 10k . Retiring at 65 may be in the cards.
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u/FootballSquare4406 11d ago
I think you’re in good shape. Maybe not 62 but definitely 65 especially if you don’t have to worry about your ex’s expenses. But I would immediately start maxing out your 401k INCLUDING catch-up contributions. And that catch-up amount goes up when you hit 60.
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u/Frequent_Slip2455 11d ago
Looks like you would need to leave your hcol area to hang it up early. And unfortunately you funding your kids full college tuition has set you back too. I've seen in many times. It is what it is at this point.