I'm 49 and my husband is 59. We have a $2.2 million house and $885,000 saved for retirement. Can we retire by 2030?

By Alessandra Malito

'We are homebodies with fairly simple and inexpensive tastes'

Dear MarketWatch,

My husband is 59 and I am 49. We would like to retire together in 2030, when he is 65 and I am 55. He earns $315,000 a year with his own one-man LLC company, and I am a public-school teacher earning $75,000 a year.

I am fully vested in my state retirement plan, which has two components: a pension and a defined contribution. I have almost $115,000 in my TRS Plan 3 account, and $35,000 in my deferred-compensation plan.

We own our home, built in 2021, valued at about $2.2 million with a $115,000 mortgage remaining at 2.625%. We want the security of having it fully paid off in retirement, so we pay extra on the principal each month and it should be paid off by late 2026.

We have about $735,000 in a combination of IRAs and 401ks, about $75,000 in an emergency-savings fund, and continue to save and invest several thousands of dollars each month, including maximizing contributions to all eligible accounts.

We have recent wills, term-life insurance policies, and health-care directives, etc. We're both in good health and get yearly exams with our primary-care physician, dermatologist, and optometrist.

We have a longstanding relationship with a fiduciary financial planner who is also our tax preparer, and his investments and tax preparation services have thus far proved sound. Our children are all adults, in careers, and are self-sufficient.

Between us, we have three living parents who are in their early 80s but are generally still independent and in good overall health. Our retirement goals are fairly straightforward - we'd like to take one major international trip a year for the first five years after retirement.

Besides that, each winter we'd like to go to a tropical resort for two weeks we've visited for many years, and a road trip for a couple weeks each fall. Other than that we are homebodies with fairly simple and inexpensive tastes.

It feels like we are doing everything "right" in our planning, but we are still nervous. We live in an area with a high cost of living, and are concerned we won't be able to keep up with inflation when we no longer have income.

We're worried about health insurance for me between ages 55 and 65 if I do retire in 2030 (husband will be covered by Medicare at that point). And we're really nervous about the reports of Social Security running out of funds.

Do you have any other insight or advice?

Nervous in Washington

Related: I'm 62, own a home, have an IRA, HSA and CDs, but I'm conservative. How do I take my money out when I retire?

Dear Nervous,

It sounds like you are doing many things right on your road to retirement, but I do understand why you said you're nervous - even with $885,000 saved for retirement. It is scary to think about the next chapter, especially when that chapter involves cutting out your earnings and relying on the savings you've accumulated over your lifetime.

Your financial planner will have a clearer perspective on your financial stability and your chances of reaching the goals you have for your retirement. Not many people work with a financial planner (or have the ability to do so), let alone have a long-term relationship like you said you have. That's an asset. Use it to your full advantage.

Financial planners, at least these days, aren't always just doing the math for their clients. In some instances, they're also serving as therapists and counselors. If you're truly nervous about your prospects, even after feeling that you're done so many things right, it wouldn't hurt to set up an appointment with your adviser to talk those worries through.

Ask about your nest egg after various distribution rates, so that you can see how taking an agreed-upon amount of money every month or year will impact your savings. This will give you the opportunity to compare what you're currently spending to what you anticipate spending later on. This will allow you to make any required adjustments, and give you something to shoot for.

Request an analysis of the potential returns or interest you can make on your money during this time, and if that income will help pay for the trips so that you're not drawing down your principal to do so. When running such numbers, you should have conservative, moderate and more optimal rates to look at, because as with life, things change.

Mapping out your retirement costs

Your adviser can start mapping out what that will cost you in retirement, and show you where to look for healthcare in the years until Medicare. Consider finding some type of work that allows you more freedom than you currently have but comes with benefits like healthcare to bridge the period until you qualify for Medicare.

Look into various benefit levels from Social Security, including early claiming, Full Retirement Age, delayed claiming or the effect any of those options would have on spousal benefits. If you're worried about whether or not Social Security will be there for you, your adviser can also show you what life would look like with reduced benefits, or even no benefits at all.

One note about Social Security, though. Yes, the trustees' reports show that the program can face a shortfall in about a decade, at which point benefits would be reduced for all beneficiaries, but Congress has never let the program falter and experts I've interviewed don't expect it to happen, either.

Legislators often stay away from Social Security reform for as long as possible because it is considered the "third rail" of politics. Constituents have strong feelings about their benefits being there for them when they need it, and lawmakers are well aware of that. So for that reason you should not expect to get "zero" dollars back when you retire.

If the trust fund were to be "depleted," it means it would no longer be able to pay 100% of benefits. That's not great, but the program would still have payroll tax revenue coming in. Nevertheless, it's good to be conservative, so the more planning you can do with minimal inclusion of Social Security benefits, the stronger your future financial stability.

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Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com

-Alessandra Malito

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05-18-24 0553ET

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