50-something couple want retirement as early as possible.

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Simon, 59, and Carol, 52, have one child who will be done with college in less than two years. Those bills are covered, so now they want to set their retirement date.

“ASAP please!” Simon said, not really joking at all. “We want to put our resources in place to accommodate our anticipated retirement needs and examine options to address medical insurance prior to Medicare availability.”

In retirement, the couple thinks they will move to another state with lower real estate taxes and downsize their home. They’re open to part-time work, and they’d also like to volunteer.

The couple has saved well. They have $1.314 million in 401(k) plans, $61,800 in IRAs, $106,100 in mutual funds, $70,000 in a brokerage account, $89,000 in savings bonds, $80,000 in savings and $15,000 in checking. There’s also $550 left in a college savings account.

Carol also has a pension worth $54,200 a year.

Jerry Lynch, a certified financial planner with JFL Total wealth Management in Fairfield, reviewed the couple’s situation for NJMoneyHelp.com.

“These guys are looking to require as soon as possible and move out of the great state of New Jersey, like most of the pre-retirees that I meet,” Lynch said. “They are looking to go to a place where the property taxes are not equal to a full mortgage payment in other parts of the country.”


Lynch took a look at their retirement savings, and said they are actually in a pretty good place.

Simon and Carol said if they no longer have a $16,000 per year property tax bill and their child out of college, they’d need around $80,000 a year to fund the lifestyle they want.

Without even looking at their savings, the couple’s guaranteed income will make a big difference. Their pensions add up to $54,200 a year, and at age 66, their Social Security benefits will bring in $63,500 a year.

“After we add the additional money from their considerable savings of $1.7 million, and their home of approximately $800,000 with no mortgage, their plan is fairly easy,” Lynch said. “Their retirement account balances can easily give them another $51,000 per year if they draw out 3 percent annually.”

And that calculation of $51,000 doesn’t include any additional retirement plan contributions or growth on any of their funds.

Overall, that puts Simon and Carol with twice the income they think they will need.

“I feel very comfortable with them retiring in the next few years as long as they have a reasonable plan,” Lynch said.

Still, the couple will need multiple strategies as circumstances can change.

Part of the issue is their 401(k) plan allocations, which has $900,000 in a fixed account paying 5.25 percent. That will be a problem with inflation over time, Lynch said.

“Assuming 4 percent inflation — lower than average — every 18 years, their money will be worth half what it is today,” he said. “We need to have some growth.”


The couple will have income Carol’s pension, but they need to seriously consider Carol’s payout options.

Generally, in a pension payout, a single life annuity is much higher than a joint and survivor annuity, which pays your spouse if you die first, Lynch said. If you outlive your spouse, then you “lost” a lot of money because you did not take the higher payout with a single life annuity.

“The problem is that if you do take out the single life annuity, and you did not have a Plan B in place, your spouse gets nothing after you die, potentially leaving them in a very bad place,” Lynch said.

One solution is known as “pension maximization,” which basically means that if you have a permanent life insurance policy that would pay enough to replace that income for your spouse, you can then take the higher single life payout, Lynch said.

“If you outlive your spouse, your kids get more money,” he said. “If you don’t, your spouse is fine, and all the while you were getting more money while you are alive and enjoying yourself.”

So Carol, even though she actuarially should outlive Simon,  needs to see if more life insurance would allow her to take the single life annuity.


Simon and Carol are young, and they should have a very long retirement ahead of them.

To make sure their money keeps up with them, they need to monitor their cash flow, which Lynch calls is the most important thing in retirement.  That includes making sure their assets produce the income they will need over the long term, and keeping enough cash on the side to pay for their lifestyle for several years. Having the cash ready will mean they never have to sell assets at distressed prices to fund their expenses.

The couple also had concerns about health insurance for their early retirement years — before they reach age 65 and Medicare eligibility.

That can be very expensive, Lynch said, so they need to shop around.

“An EPO plan — in-network only — with Horizon BC would be around $1,500 per month for them now,” he said. “If they were five years older and applying today, it would be around $1,800 per month. This is a plan with a $2,000 deductible per person before you start getting anything paid by the insurance company.”

“Retiring prior to age 65 can be very expensive for medical insurance,” he said.

Lynch said they also need to make sure their estate plan is in place, with wills, trusts, powers of attorney and living wills.

“It’s not that expensive and they need to really take care of this,” he said. “They have a 21-year-old child and if anything happens to them, the child inherits a tremendous amount of money at one time — which is a recipe for disaster.”

“To have this much in assets, and not have a good estate plan makes absolutely no sense,” he said.

This story was first posted in November 2014.

Money makeovers offered by NJMoneyHelp.com should be treated as general advice about personal finance and money decisions. Before you make any changes to your personal financial plan, see a professional who can consider your entire financial situation. If you’d like a free money makeover, email .

Net Worth:


  • Checking: $15,000
  • Savings: $80,000
  • Savings Bonds: $89,000
  • IRAs: $61,800
  • 401(k): $1.314 million
  • Brokerage Account: $70,000
  • Mutual Funds: $106,100
  • College Savings: $550
  • Primary Home: $800,000
  • Personal Property: $25,000
  • Autos: $40,000
Total Assets: $2,601,450


  • none
Total Liabilities: $0
Total Net Worth: $2,601,450


Annual Income:

  • Simon Salary: $124,964
  • Carol Salary: $182,626

Monthly Expenses:

  • Income Taxes: $5,292
  • Housing: $2,158
  • Utilities: $577
  • Food: $1,121
  • Personal Care: $920
  • Transportation: $783
  • Medical: $540
  • Entertainment: $48
  • Vacations: $125
  • Charity: $20
  • Gifts: $380
  • Pet Care: $45
  • Misc.: $700