25 Oct How do we decide if we have enough money to retire?

Q. How can we decide if we have enough money to retire? My wife wants to stop working but I don’t think we can afford it yet. We have about $1 million in 401(k) and IRA accounts and a $15,000 emergency fund. My salary is $125,000 and hers is $98,000, and we both save the max to our 401(k)s. I am 62 and she is 61. Our mortgage will be paid off in five years and we have no other debt. How can we figure out if we can afford it?
— Still working

A. That’s what we all want to know, right?

You offered a lot of information, but the answer to your question depends on information you didn’t share here.

Part of the consideration would be how much Social Security income you will be receiving when you claim and any pensions you might have, said Jody D’Agostini, a certified financial planner with The Falcon Financial Group in Morristown.

“I would highly suggest getting a financial plan that can model your retirement cashflow and net worth,” she said. “It will guide you as to how much you can spend.”

The plan will add in the effects of taxes and inflation as well as the growth of your assets, which is largely dependent upon your asset allocation, she said.

You should consider one thing that is often overlooked or underappreciated: longevity risk.

“No one knows how long we will live, so the longer you stay employed the better on multiple fronts,” she said. “You will delay claiming your Social Security benefits, which improve by 7 to 8% up until the age of 70, your investments will continue to grow, as well as your continued retirement savings.”

Additionally, there would be fewer years when you will be drawing on your portfolio, she said.

“You cannot claim Medicare until the age of 65, so remaining on your employer’s healthcare plan until that time makes sense,” D’Agostini added. “This will lessen the potential of running out of money.”

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This story was originally published in October 2026. 

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.