Should I work until I pay off the house or retire

brianj1965

What should we do? 

• My wife is 65 and will be 66 in December. She wants to retire next December
• I am 59
• We only have a combined $316k in 401k ($183k my wife + $133K me)
• My wife was diagnosised with Parkinson's stage 2 and wants to retire around her 67th birthday
• We owe $20k on a car
• And we owe $104k on our mortgage
• We only have $10k in savings

Any advice?

JoeCrystal

Hey brianj1965,

I am unsure if we can offer any advice for you here as this is a British forum, so most of us are in the UK. And so many discussions here are focused on retirement planning in the UK. 

The only information you probably get here will be very generic, available by the dozen on the US financial independence blogs/websites.

Off the top of my head, work out precisely your general expected weekly and monthly retirement expenses and your potential large annual bills. And then work out if you have enough income to cover the bills and enough cash savings. If you reach that point and more, you can retire. If not, then you need to work. It is essential, though, to check all the benefits and supports by your governments in general.

I do wish you all the luck in the future.

tacpot12

Hi brianj1965, you have some savings, but quite a lot of debt. Whether your wife can retire at 67 will depend on the degree to which she can draw on her 401k to replace her current earned income, which you presumably need to pay off the mortgage.

Ideally you want to be able to continue to pay into your 401k at the same rate and continue to pay off the mortgage at a rate that will allow you to clear it just before you expect to stop working even when she has retired.

In the UK, we have financial advisors who would help someone in your wife's position determine how to draw out from her retirement savings so that they will last, and also allow them to have a reasonable standard of living, taking into account all their existing living expenses such as a mortgage.   

You probably need to find a local advisor to you who can help your wife figure out how to make her 401k last as long as she is likely to need it, and how much she might be able to continue to help make the mortgage payments. With those figures, you can review your budget and see whether you can make it work. 

How is your health? Are you expecting to be able to work until you are 67?

If you want to retire now, you will need to do the same sums for you to see if you can draw on your 401k enough to make mortgage payments. I would expect that you can't do afford to do this. ($316k at 4% withdrawal rate is only $1000 a month for both you.) Can you live on that AND pay your mortgage?

If not, working until the mortgage is paid is really your only option. 

Robin9

brianj1965 said:

What should we do? 

• My wife is 65 and will be 66 in December. She wants to retire next December
• I am 59
• We only have a combined $316k in 401k ($183k my wife + $133K me)
• My wife was diagnosised with Parkinson's stage 2 and wants to retire around her 67th birthday
• We owe $20k on a car
• And we owe $104k on our mortgage
• We only have $10k in savings

Any advice?

In June 2017 you said "My wife and I are 53/59 yrs old. We have $0 savings and retirement. We have over $32k in debts excluding our home. Our household income is $140k. Several agents have inquired with us to sell our home. We owe $71k on our home and they are offering $170k. Should we sell our home to become debt free?"

Can you confirm you are in the US please ? 401K  is a US Savings/Retirement Plan

We know very little of your situation but retirement does beckon .  You have a high income but do you have high expenditure to go with it -  dependent children ?  What has happened in the last 6 years -  you owe more on your mortgage and your savings (outside the 401K) have barely grown.

Please sit down and do a line by line income/expenditure 

I would be wanting to retire to be alongside my wife.

Marcon

brianj1965 said:

What should we do? 

• My wife is 65 and will be 66 in December. She wants to retire next December
• I am 59
• We only have a combined $316k in 401k ($183k my wife + $133K me)
• My wife was diagnosised with Parkinson's stage 2 and wants to retire around her 67th birthday
• We owe $20k on a car
• And we owe $104k on our mortgage
• We only have $10k in savings

Any advice?

Prioritise time with your wife while she's well enough.