Hi, and thanks for your question. If I’m understanding correctly, you’ve saved a total of $675,000 between 401(k)s, IRAs, and nonretirement investment accounts, and you plan to retire in about six years at age 62. Although you’ve provided me with a good amount of information, there are a few other important data points we would need in order to provide a more accurate assessment of your situation.
First, we’d need to know how much money you expect to spend in retirement. Naturally, it is hard to know for sure until you actually retire or do a detailed budget. For preliminary planning there is a rule of thumb you can apply, which is to assume you will need 85% of your current income in retirement. So, hypothetically speaking, if you earn $75,000 per year, you would want to assume an annual retirement income need of $63,750 ($75,000 x .85). This is important to know to determine how much money you will need to withdraw from savings to supplement Social Security payments and other sources of guaranteed lifetime income (such as pensions or annuities).
Next, we would need to know how much more you plan to save in these accounts between now and retirement, and what your target asset allocation (the mix between stocks, bonds, and cash) will be from this point going forward. This information will help make some assumptions regarding the future value of your current savings.
As you probably know, you may be eligible to begin taking Social Security at age 62. What many individuals and couples don’t know, however, is the longer they defer taking Social Security, the larger your payments will be. Suppose you’re 62 and eligible for $1,200 per month. If you wait until your full retirement age (FRA) of 66 to start claiming benefits, that amount will rise 33% to approximately $1,600 per month. This is a very important decision that will factor into your overall retirement plan.
My suggestion is that you take some time to run the numbers in one of our retirement planning tools. Then, you may want to set up time with one of our planning consultants who can review your plan and make suggestions that may help you to meet your retirement goals. For instance, you may find that your asset allocation is too conservative or too aggressive. We can help you re-adjust your investment mix so that your overall investment strategy is appropriate for your time horizon, risk tolerance, and investment experience. Here is a link to a planning tool designed specifically for individuals who are more than five years from retirement: https://www.fidelity.com/calculator...
I wish I could have given you a simple yes or no answer. But since this is such an important decision, it is critical to take a closer look at your situation and numbers. That said, I hope you find my answer helpful as you begin to prepare for retirement.
Important Additional Information:
Guidance provided by Fidelity through Retirement Quick Check is educational in nature, is not individualized, and is not intended to serve as the primary basis for your investment or tax-planning decisions.