ok guys, I'm coming up on 59 and a half. Kids are out of the house, the house and all debts are paid off. When the market crashed in March last year, we emptied out the winery fund and sunk it into the market. I'm ready to just retire and do the winery, which will make us more money than me working full time at a job that i don't want to do anymore. The Yadkin Valley, NC or western MD is looking good. Should i pull the trigger in May (when i am 59 and a half and can access the 401Ks, SEPs and IRAs without penalty)? Or sell the house, downsize and get more property and relocate the winery there?
-- Wait to retire until you can access your money without penalty. If at all possible, do not touch your Social Security money until age 70 unless you are pretty sure you will die sooner than that. You gain 8% for every year of eligibility that you defer past your SS retirement age. Likewise, budget so that you do not take SS early. You can lose a chunk that way.
-- Prepare your finances to mitigate downside risk. 60% stocks/40% fixed income is an oft-recommended ratio to buffer market turns in retirement. Presently, many retirees are overextended in stocks. Be sure to rebalance each year to maintain your ratio.
-- Check if a ~ 4% withdrawal rate will fund your retirement budget needs derived from investments..
-- If you move, be sure you budget for the impact withdrawing the expenses of your move will have on your future investment earnings. If it were me, I would stay put, since you are free and clear on that property so it would be less risky in a retirement scenario. Could you stay put yet market your wines at events being held in areas where you really like to be?
-- If you decide to move after you retire, experts recommend that you try to rent a place for a month or so and live in the location to which you wish to move. Many retirees have moved only to find they gave up a paid-off property in a place that was acceptable to live in a place that's not as nice as they thought it would be. I have a number of neighbors who moved to Florida, hated it, and then moved to Tennessee, for example. That can be hard on finances.
-- If you move away from family, take into account the effect that severing those close connections might have as you age. When scouting new locations, look for places that will support the future you - close and good healthcare, a network of support, etc.
-- One of the hardest parts of early retirement is the chunk it will cost you to fund health insurance until you are Medicare eligible. (That is what keeps me going to work, the $12,500 a year it would cost my wife and I to do that in Tennessee.) Many use an Affordable Care Act enrollment to bridge the gap. If you plan to use ACA, note that if you move to North Carolina, that state has not expanded Medicaid (and neither has Tennessee). So, your insurance expense may be higher in North Carolina than Maryland, which has traditionally expanded Medicaid. Where you move matters to your insurance costs, and health insurance will be your #1 non-housing expense in your gap years.
