Can the Maguires Afford Retirement?
A generalizable solution for near retirees
Jenny and Bobby Maguire are ready to retire. The Maguires had just turned 67, ready to turn toward tennis and fishing tackle and away from their careers as commercial lines underwriters, where they first met in an underwriting training program. A life in Tampa, three kids raised, and four grandchildren, all boys, to carry the Maguire legacy forward. By some measures, the Maguires did not build a fortune. Jointly, they have 401(k)s of $1.3 million, a brokerage account with $200k of cash and ETFs, and Social Security retirement benefits ready to be called on. Fortunately, their home is paid for, and their credit card debt is a couple thousand monthly.
How might the Maguires consider whether they can afford retirement? They must confront questions about their maximum longevity, the risk they assume on investments, and the best age to begin drawing Social Security retirement benefits. They will benefit from a model that forecasts their best path. The model offered is generalizable to any household with the same question.
Today: Retirement affordability closes Chapter 7 of 8 of Economics-Based Personal Finance. During the past several weeks, the best way to evaluate a Roth v. an IRA, the costs and benefits of maxing out retirement contributions, and the question of when to retire have been addressed and sprinkled with additional cases.
Excerpt:
Here is the table of contents for Chapters 6 and 7. Behind the paywall below, a single PDF of Chapters 1 through 7 is available for free to paid subscribers.
