The Carr Report: Can he retire?

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I recently came across this article published on

I’m 66. We have more than $2 million, I just want to golf—can I retire? My social security payments start next month at $3,300 a month. I’m currently working part-time, three days per week, as a professional engineer for $95/hour for my long-time regular full-time employer of 28 years. (I want to leave this position ASAP or sooner.)

I currently have about $1.6 million in retirement accounts. My wife (60 years old) has about $600,000 in various regular and retirement accounts. We have a 16-year-old daughter at home attending high school and college in a dual enrollment program. If she stays with the program she’ll have her bachelor’s at 19. While in high school she takes college classes and we pay no tuition while she’s in high school.

Our monthly expenses are about $9,000 – $10,000 per month including health insurance for my wife and daughter. We own our modest single-family home with no mortgage. Taxes and insurance are currently about $6,000 per year. We currently have no debt, aside from an American Express and Visa that we pay off every month.

I’m on Medicare. I get walloped for a double premium for part “B” because I’m considered a high-wage earner. The two of us are in reasonable/normal health for a couple of old farts.

I want to throw in the towel on May 5 and play more golf. Can we do it?

Damon Carr here: They’re living the American Dream. Married with children, own their home free and clear of a mortgage, completely debt-free with mega-money in the bank. Wouldn’t you love to be in their shoes?

Everyone reading this would conclude that they are winning—financially speaking.

Less than 1 percent of Americans at any age can say they’re completely debt-free with millions in the bank. Clearly they’ve been both intentional and proactive with their money. What’s even more important is this, despite their success in managing their money over the years, he’s humble enough to seek advice to confirm if he’s ready for retirement. Those characteristics mentioned here are more than likely the reason they’re flush with cash as they approach retirement. Humble, intentional, proactive, willingness to seek counsel from a trusted expert. These characteristics paid off for them. They’re surely characteristics worth modeling in our own life if we aspire to be like them when it’s time for us to hang up our working shoes.

The bulk of my audience is between the ages of 45 and 60. We’re on the cusp of retirement. Truth of the matter is, with retirement age being within the next 15 years, we need to buckle down and get serious about our money or we’ll never have serious money. 

You don’t become debt-free with $2 million in retirement savings by being a spendthrift. In order to pull this off, you have to be willing to make sacrifices, willing to live on less than you make, willing to prioritize needs over wants, willing to delay gratification, willing to say no to yourself, and able to have a long-term perspective. If you don’t learn to live on less than you make when you’re working, you’ll be forced to live on less than you made in retirement.

I’d like to emphasize two sacrifices I observed this family made while reading this article:

  1. They live in a paid for “modest” home.
  2. Their daughter is in dual enrollment taking both college and high school courses simultaneously. While she’s in high school, they don’t have to pay for college courses.

Back to the question at hand. Can he retire? I’ll give him a resounding YES! He can retire!! The real question is “Should he retire?!

Current expenses= $10,000 per month.

Projected income from Social Security=$3,300 per month.

A safe withdrawal rate is 4 percent of accumulated retirement savings then increase it by the inflation rate annually.  Every $1 million saved is worth approximately $40,000 per year. They have $2.2 million in retirement savings. That’s approximately $88,000 per year or approximately $5,900 per month after accounting for taxes.

That’s a total of $9,200 per month coming in.

The fact his wife has $600,000 in retirement savings suggests she’s currently working or worked at one point.  She would be entitled to her full social security benefit or half of his—whichever is higher. Wife is currently 60 years old. She can’t start receiving social security until age 62 or 2 years from now.  If she starts collecting at age 62 her monthly benefit will be reduced by 30 percent.  The big question mark is, does she currently work and how much does she make. If she currently works, her income will make his transition to retirement smooth.

If she doesn’t work, sure he can still retire but they’ll have to reduce their monthly expenses and lifestyle to mirror their lower retirement income. How would that impact his ability to play golf on the regular? Lower monthly income equals less discretionary income to spend on golf.

Social security benefits increase by 8 percent per year for every year you wait after your full retirement age. If he continues to work and delay taking social security until age 70, he’ll get a 24 percent increase in his monthly social security benefits. His social security check would be $4,092 per month instead of $3,300. It will allow her to reach an age that she can start collecting social security. Her monthly social security benefit will increase as well.

Also, this will allow them to continue to contribute to their retirement plan and allow what’s currently in their retirement accounts to continue to grow. Growth alone on $2.2 million pads their investment portfolio by another $110,000 per year over the next 3 years for a total of $330,000 more in their account. That’s excluding what he contributes to the account going forward. Plus I’m using a conservative 5 percent ROI.

Can he retire? YES!! Should he retire? As he stated, they’re both in relatively good health for two old farts. I think it benefits them more financially if he continues to work for a couple more years.

(Damon Carr, Money Coach can be reached at 412-216-1013 or visit his website @




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