Can I retire if my wife continues working, considering our $3.9 million in retirement and cash, while facing a $60,000 annual college bill for our child over 5 years?

Can I Retire if My Wife Continues Working?

Are you nearing retirement age and wondering if it’s financially feasible to retire while your spouse continues to work? One reader recently posed this question to MarketWatch, and the answer may surprise you.

The reader, a 61-year-old man, has just retired with no current income. His wife, on the other hand, is 55 and earns a substantial $150,000 per year. Together, they have a total of $2.5 million in 401(k) plans and an additional $1.4 million in investable assets and cash. They also own a mortgage-free home worth approximately $900,000.

However, there is one major financial obligation standing in their way – their child’s college tuition. With five more years to go in a six-year program, the annual cost of tuition amounts to $60,000. The couple has $120,000 in a 529 plan, which will cover the next two years of tuition. This leaves them with three more years to pay from other funds.

Considering all these factors, can the reader afford to retire? According to financial experts, the answer is yes – but with some careful consideration.

One key factor to consider is health insurance. Currently, the wife is covered under her job’s medical insurance plan. However, if she were to stop working before both spouses reach the Medicare age of 65, they would need to obtain private market insurance. This can be expensive and should be factored into their estimated expenses for the next ten years.

Preserving their assets for the duration of their lifetimes is another important goal for the couple. With their substantial savings, they should aim to enjoy retirement while ensuring their funds last. This is especially crucial since they have no debt and own their home outright.

One option to consider is part-time employment for the retired spouse. By working part-time, they can continue to contribute to their retirement savings while also paying off their child’s tuition bills. This would prevent them from having to withdraw too much from their retirement plans, preserving their assets for the long-term.

When it comes to claiming Social Security benefits, the reader should carefully consider their options. While they can start claiming at age 62, waiting longer could result in higher monthly payments, particularly if they anticipate a long life expectancy. Additionally, early claiming could impact survivor benefits for the spouse if the retired individual were to pass away.

To create a comprehensive financial plan, the reader is advised to consult with a qualified financial planner. A professional can provide specific advice based on their current financial situation and help them develop a retirement income strategy. They can also factor in variables such as rates of return, inflation, and Social Security benefits to give a clearer picture of their future finances.

Part-time work doesn’t have to be a burden for the retired spouse. With their substantial savings, they have the freedom to be selective about the type and timing of work they pursue. They could consider consulting gigs or explore new ventures that align with their interests. If the job provides health insurance or retirement benefits, it’s an added bonus.

Ultimately, the decision to retire or continue working part-time is not set in stone. After their child graduates from college, the couple can reassess their financial situation and adjust their plans accordingly. At that point, they would have one major expense off their plate and more flexibility in their budget.

Overall, this reader’s situation is enviable. With careful planning and consideration, they can retire comfortably while also fulfilling their financial obligations. By finding the right balance between work, savings, and expenses, they can enjoy a secure and fulfilling retirement.

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