I’m 66, We Have More Than $2 Million, I Just Want To Play Golf – Can I Retire?

I currently have about $1.6 million in retirement accounts. My wife (age 60) has about $600,000 in various regular and retirement accounts. We have a 16-year-old daughter at home who attends high school and college in a dual enrollment program. If she continues with the program, she will have her bachelors by 19. While in high school, she takes college classes and we pay no tuition while she is in high school.

Our monthly expenses are around $9,000-10,000 per month including health insurance for my wife and daughter. We own our modest detached house without a mortgage. Taxes and insurance are currently around $6,000 per year. We currently have no debt, except for an American Express and Visa that we pay off each month.

I am on Medicare. I get a double premium for Part “B” because I am considered a high 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 5th and play more golf. Can we do it?

See: We’re in our 60s and have lost $250,000 in our 401(k) plans – can we still retire?

Dear Reader,

Congratulations on saving so much for retirement. That is an amazing achievement on its own!

Because I don’t have all of your finances in front of me, nor am I a financial planner building a comprehensive plan for your retirement, I can’t say for sure whether you can retire. However, it obviously sounds like you’re doing well and that you’ve planned. Rather than tell you whether or not to go for it, I’m going to offer a few things to consider before picking up your mid-irons.

More than $2 million (you and your wife’s savings combined) is a lot of money—I’m not suggesting otherwise—but when it comes to retirement, that doesn’t mean you’re automatically good to go once you hit the million-dollar mark. There are so many factors, some of which you mentioned like healthcare and debt, as well as savings and expenses.

I focus a lot on expense analysis, but for me it is so crucial when deciding whether and how to retire. Why? Because this is something you can mostly control. It’s a pretty strong feeling.

So my first suggestion: Review those AMEX and Visa statements, as well as money coming out of any checking accounts, and make sure you’re spending the way you want and need to spend. When you retire, you won’t have that part-time income anymore, and while you may be itching to get on the green, you’ll also be stressed if you don’t have enough greens in a decade or two. You’ve told me what your Social Security benefits will be and what your average monthly spending is, but I’d suggest you really look at your spending and consider how comfortable you’ll be if you continue to spend that way in retirement.

Check out MarketWatch’s column “Pension Hack” for practical advice for your own journey with pension savings

There is another part of that analysis, which is how much money you intend to withdraw from your retirement accounts. I’m not sure if your wife is still working, but regardless, the more money you take out of these accounts each month, the less is available to grow over time. Taxes also play a role here, depending on whether you’re withdrawing money from a traditional or Roth-style account. These taxes can take a larger portion of your spending money, as well as potentially giving you a heftier tax bill at tax time.

Think about this when your daughter goes to college too. She may not be around long if she continues her hybrid high school/college courses (which are awesome, by the way), but are you going to pay for her tuition, and if so, where is the money coming from? Advisors tell me all the time: you can take out a loan for college, but you can’t take out one for retirement. It can be beneficial to have a separate education savings account if you don’t already have one or some sort of college savings account like a 529 plan so you don’t drain your retirement account for a tuition fee. .

One last bit about it – plan for the unexpected. What will you do if large expenses arise? Will that money also come from a retirement account, or do you have an emergency account set aside to cover it? Saving a lot of money for retirement is great, but it’s not the only task individuals need to accomplish…coming up with a Plan B, and maybe even a Plan C and Plan D, is also necessary.

See also: Are you planning your retirement all wrong?

Then, before you retire, check the way your money is invested. How is your asset allocation and does it need to change? Don’t make changes just for the sake of making them – and definitely don’t make them just because you read that the markets weren’t so hot that day – but remember that this money needs to grow for decades to support you and your wife, so you need to find that balance. Contacting a qualified financial professional, such as a certified financial planner, can help you understand what the best investment mix is, but at least log into your account or call the firm where your accounts are held and check that asset allocation.

You also mentioned that you already use Medicare. I would suggest taking the time now – well before open enrollment – to review your current and expected future health care expenses, and then assess how useful your current coverage is to you. I know you mentioned that you and your wife are in reasonable health, but if there are any surgeries or services you think you might need next year, it’s better to start considering which plans give you the best coverage for your situation, so that you do not pay more out of your own pocket than necessary. This is an exercise you don’t need to do right away, but it’s sure to help you feel more prepared at the end of the year when it’s time to stick with your current plan or switch to something else.

As an aside, you will ultimately pay less in Medicare Part B premiums as your modified adjusted gross income decreases. These premiums are based on the tax return from two years before.

You sound like you’re on the right track, which is fantastic. I just want to warn you to tie up some loose ends before you quit so you can tee off without worry.

Readers: Do you have suggestions for this reader? Add them in the comments below.

Do you have questions about your own pension savings? Send us an email at HelpMeRetire@marketwatch.com