Walsh — Determining retirement age

Trying to figure out the year one should retire feels like using a cruise ship pool to learn how to swim while the ship is sinking; too late to make a difference and we’ll get just as wet in the end. Still, I can’t help but feel I want to know everything I can before I get tossed in the water.

There are so many variables in picking a target retirement date that talking about it with others rarely yields anything other than the sinking feeling I’m doing it wrong. How soon did I start saving, how much, and at what level of portfolio aggression? Do I have a defined benefit package or a 401k? How much can I rely on for Social Security payouts? When am I eligible for Medicare and can I pay into my union’s insurance plan until I’m eligible? If my wife has a pension, do we include a survivor benefit or open up a term-life insurance policy instead?

All of this seems daunting until one considers the tax implications on what is saved for retirement. Trying to maximize tax savings requires a lot of patience, a healthy tolerance for future projections, and a crystal ball. Putting my savings in a Roth IRA means I contribute after-tax dollars so my money grows tax-free, allowing for tax- and penalty-free withdrawals after age 59½. A Traditional IRA allows me to contribute pre- or after-tax dollars, my money grows tax-deferred, and withdrawals are taxed as current income after age 59½.

The crystal ball is necessary because I’m betting on whether I want to pay the taxes now, at a historically lower tax rate, or bet that the amount of my withdrawals will keep me in a low tax bracket so I won’t have to pay much money on those withdrawals after I retire.

My wife recently had an astrology reading that indicated a major stock market crash June 23, 2023, so I’m throwing that in my planning until I can save up enough to buy the crystal ball.

I’ve always known that the age one should plan for retirement was “immediately,” but it always seemed so far off. I’m the sixth of seven children, so I just think of my older siblings as the canaries in the coalmine: if they’re still young, then so am I. Then someone showed me a picture of the Traveling Wilburys from their 1988 debut that had their ages listed. I’d always thought of them as the senior citizen supergroup, but Roy Orbison was only 52, Bob Dylan 47, George Harrison 45, Jeff Lynne 41, and Tom Petty only 37!

I don’t know if aging better than Bob Dylan says much, but I’ll take each victory as it comes.

Learning to swim on a sinking ship is better than hitting the water without any planning at all. Retirement is a moving target: If I didn’t have the foresight to keep the boat from going down, I can still make the best of what I have now. At this point, I just have to find that astrologist and get the date to buy back into the stock market just before the Big Rebound of 2024.

Oh, and I should probably learn to swim, just in case.

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