I'm 61 And Tired Of Working. My Wife And I Have $1.5M Saved - And We're Anxious To Start The Next Chapter Of Our Lives. Do We Have Enough To Retire?

2025-10-09 02:05:10

(MENAFN- News Direct) > When it comes to planning for retirement, evaluating your nest egg is a big part of the process. In fact, the state of your retirement savings can heavily influence when you decide to retire.

Take Jim, for example. Jim, 61, worked in corporate America for most of his career and after he was laid off, he wondered if now might be the time to take a step back. Before his layoff, he and his wife, Helen, made a combined $300,000 a year. They also carry no debt and have a combined $1.5 million in savings.

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While Jim would like to retire now, the decision hinges on whether Helen also plans to retire immediately, how much they truly need to live comfortably, how long their savings will last and the role Social Security and Medicare will play in their plan.

To figure this out, let's get into the numbers.

Retirement has changed - for better and worse

The retirement landscape has changed dramatically since the turn of the century. According to Pew Research, the pandemic increased the rate at which people left the workforce, with just over half of U.S. adults over 55 reporting that they were retired by the end of 2021. (1)

People working longer is also becoming more common. In 2023, Pew Research found that 19% of Americans ages 65 and older were employed, which is nearly twice as much as the share of those at that age who were working 35 years ago. (2)

At the same time, life expectancy and the number of years between retirement and death have been increasing. According to the Social Security Administration, the average 65-year-old woman in the U.S. has 20.12 years left to live, while the average 65-year-old man should look forward to 17.48 more years. (3)

Of course, these are just averages, but one of the biggest risks to any retirement plan is outliving your savings. If Jim and Helen live into their nineties, their money has to last nearly three decades.

Market downturns, higher-than-expected inflation and rising health care costs could erode their purchasing power over time. Medicare eligibility at 65 will help manage health care expenses, but supplemental insurance and out-of-pocket costs can still be substantial.

How much should you have saved by age 61?

Financial planners often suggest that by the time you reach your early sixties, you should have between eight and 10 times your annual income saved for retirement. For Jim and Helen, that would mean a nest egg of between $2.4 million and $3 million.

With $1.5 million saved, they are ahead of many Americans - median retirement savings for households with older Americans between 55 and 64 is around $185,000 - but their savings are still below this guideline.

There is no single“golden number” for retirement savings, because spending habits, health and lifestyle choices vary. However, $1.5 million can provide a comfortable retirement for some, especially if at least one spouse continues to earn income and delays withdrawals from savings accounts.

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Estimating retirement income at 61

If both Jim and Helen retire this year, they could presumably begin drawing from their retirement accounts without penalty. Using the commonly cited 4% withdrawal rule , $1.5 million could give them about $60,000 a year before taxes. That's 80% less than the couple's current level of annual income.

Moreover, claiming Social Security at 62, the first year Americans are eligible for benefits, means receiving about 30% less per month than Jim and Helen could get if they wait until the full retirement age of 67, and less than half of what they would get each month if they delayed retirement until 70.

If Helen were to delay her retirement until 67, her Social Security benefits could significantly boost their income. If she delays claiming benefits until then, she will receive a higher payout for life. Jim could claim his benefit earlier, or also wait until full retirement age, or 70 in order to maximize his payout.

By combining withdrawals from their savings, Social Security and Helen's continued earnings for the next six years, they could maintain or even exceed their current standard of living until both are retired. But, again, this depends on whether Helen is planning to retire now with her husband.

Actionable steps before retiring

Before making the decision to retire, there are a few things that Jim and Helen should consider:

Creating a detailed retirement budget that includes health care, housing, travel and discretionary spending
Meeting with a financial planner to run simulations based on different retirement ages and market conditions
Part-time or consulting work for Jim and/or Helen to reduce withdrawals from their savings in the early years
Revisiting their investment allocation to balance income needs with long-term growth potential

The bottom line

Retiring at 61 with $1.5 million and no debt is possible, especially with one spouse continuing to work for several more years. However, if Helen retires now with Jim, they may need to change their lifestyle in order to adapt to their new annual income.

They also need to remember that the key to retirement success is understanding how long the money needs to last and what lifestyle they want to maintain. For this couple, Helen's continued income could provide a cushion if she decides to keep working, but her decision should be grounded in careful planning, realistic spending expectations and an awareness of longevity risk.

With the right strategy, Jim and Helen could transition into retirement with both financial security and peace of mind.