I suggest 'planning' a few years or less away from retirement. I hate to use the word 'plan' because this isn't really a plan at all. Rather a realistic and simple way to look at your retirement from where you are now.
I would be happy to send you the entire worksheet, just email me and ask, its FREE but here is a simplified version.
- Add up all your assets, bank, brokerage, CD's, 401k, IRA, etc
- Do not include your house in this calculation but it should be paid off!
- Divide your total assets by 300. This is the monthly amount you will have to live on which comes from your assets at a withdrawal rate of 4%
- Add whatever social security or pension (if you are lucky) to the above number.
That's it. That's what you can afford, period. If you don't like that number, two choices;
- get back to work and recalculate in a few years
- recalculate with a cheaper home and add the difference to your assets above