Question: I am being forced into early retirement at age 58 in about six months, and I am scared to death. We own our home free and clear, and the property taxes are low in our area. It is a small rural house, worth perhaps $60,000, but our expenses are very low — basically only food, utilities and some medical expenses that are lower than those of most of our friends'. My generous retirement will be 30% of my highest three years of earnings, and I have about $250,000 in a retirement fund. There is a confusing supplement that I will be applying for that is supposed to make up Social Security payments as if I were retiring at 65 (until I actually reach 65).
In a lot of ways I think I am far better off than most, but I am afraid to find out how little we will have to live on. I am not beating down your door because I don’t understand how you can possibly help me.
Ric: You should make an appointment with us precisely because you don’t understand how we can help. You don’t know what you don’t know, as they say. If you like a challenge, consider this: Come talk to us and let’s prove your thesis. You have nothing to lose (since you already believe you can’t succeed). And you have lots to gain if we demonstrate value for you.
Let me give you a taste of what we can do for you:
- Who says you have to retire in six months? You might be forced out of your current job, but that doesn’t mean you can’t work or generate income elsewhere. You’re only 58 years old! We’ll do the calculations for you to show you how much income you need to earn — and it’s possible, perhaps even likely, that we will conclude that you don’t need to replace 100% of your current pay. That means a part-time job, or one that serves the community (and pays less) may be sufficient to meet your long-term income needs.
- Is owning your home with no mortgage the smartest strategy? Perhaps not: The equity is like burying cash under the floor — it’s earning no interest. An examination will reveal whether the home equity could be converted into income for you, easing your worries.
- You minimize the fact that you have a pension and will receive Social Security in eight years. Let us show you how valuable these really are for you.
- That $250,000 in retirement savings is awesome, but it appears you’ve ignored how easily you can convert this to a monthly income. We can show you how to do this.
So far you and I have referenced only the income aspect of your situation. What about insurance (life and long-term care), wills and estate planning, taxes, and all the other aspects of personal finance? If we can help you with those items — and I predict that we can — you’ll have enjoyed much value from meeting with us even if you see no improvement on the investment part.
Please call us. You have little downside and huge upside potential. Or you can choose to wallow in your (unconfirmed) fears. It’s entirely up to you.