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The Moneyist: ‘She says it’s not fair’: My wife will retire at 62, and I’ll be ready at 59. We have $5 million. Am I being lazy?

My wife attended college the same year I was in high school. My wife is four years older than me. My family has never been on the university path so that was not an option for me. I joined the military after high school. In the same month (before we met) she graduated college and joined the workforce, starting her finance career. 

We met when I was still in the military. While I was enlisted we dated, married, bought a house and did not want to move. So after 8 years I left the military and started my IT career. I finished my degree via night school, and now we both have very successful professional careers. Our average career income has been roughly comparable — with her earning a bit more overall. As she is something of a workaholic, she has definitely put in more total work hours.  

‘Our average career income has been roughly comparable — with her earning a bit more overall.’

Through good salaries, smart investing and 30-plus years of diligent 401(k) contributions we have saved enough in retirement and our equity accounts to start counting down to retirement. We have nearly $5 million in savings and retirement accounts, among other investments, so we are in a good position for both of us to call it quits.

I think we should retire around the same time, her by 62 and me around 58/59. But she says it’s not fair since I am so much younger, I should also work until 62 as well. My argument is that we have both been working professionals for the same time and deserve retirement around the same time. What are your thoughts? I am being lazy for wanting to retire before 60? 

Younger Husband

Dear Younger,

You are different ages, but on the same flight path and in the same time zone. If you can afford to retire at 59 and you want to retire at 59, and it would not impact your quality of life in retirement, I say go for it. You don’t have to stick to this decision. You can reevaluate it when you reach that age. I disagree with the reason for your wife’s objections: I would prefer if she objected based on financial grounds rather than “I worked until 62, so you should too.”

The financial argument would suggest caution, and should think twice if it forces you to withdraw from your Social Security early. Virtually all American workers aged 45 to 62 should wait beyond age 65 to collect their Social Security, according to this working paper from researchers at Boston University and the Federal Reserve Bank of Atlanta. More than 90% of people should wait until they reach the age of 70, yet only 10.2% appear to do so, they said. 

To put that in context for your impending retirement: Claiming Social Security early reduces household lifetime discretionary spending by $182,370 for the median worker who is near retirement, the paper concluded. “Optimizing would produce a 10.4% increase in typical workers’ lifetime spending,” the researchers wrote. “For one in four, the lifetime spending gain exceeds 17%. For one in 10, the gain exceeds 26%.”

I would prefer if she objected based on financial grounds rather than ‘I worked until 62, so you should too.’

Nearly half of workers (47%) retire early, but many cited reasons more serious than yours, according to a report by the Employee Benefit Research Institute, a nonprofit based in Washington, D.C. Nearly a third cited a financial hardship, such as a health problem or disability, which was not related to COVID-19, while nearly a quarter said they retired due to changes at their company. Some 38% said they could afford to retire early. 

MarketWatch columnist and contributor Mark Hulbert recently wrote a story about some of the reasons people wish to retire early. He cited a study by researchers at Cornell and Duke Universities that focused on the “psychological ownership” people have over their retirement accounts. People who agreed with or strongly agreed with statements like “I feel that I have earned these retirement benefits” were more likely to retire early. 

That said, your $5 million puts you in a good place to retire at the same time, if not at the same age. You are in the top 0.1% of U.S. households. You could travel the world together while you still can, or take cruises while you still can, or join your local golf or country club while you still can, or decide to work part-time after 59 so you can both enjoy some of those things together, and ease into retirement. After all, we — or at least most of us — are all temporarily abled. 

With the help of a financial adviser, you can explore your options, what kind of income you would receive with a 4% drawdown (or more) from your portfolio every year, how much you should set aside for an emergency fund and long-term care, and whether you should explore options like an immediate annuity, where you give a lump sum for a guaranteed income. The bottom line: Your decision should be based on your budget, not on who got to work the longest.

“If you can afford to retire at 59 and you want to retire at 59, and it would not impact your quality of life in retirement, I say go for it.

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