I’m 55 with no kids. I was unhappy at work so I took early retirement. I’ve more than $2.7 million in stocks and $1.6 million in real estate. Is that enough?

I’m 55 with no kids. I was unhappy at work so I took early retirement. I’ve more than $2.7 million in stocks and $1.6 million in real estate. Is that enough?

Dear MarketWatch, 

I recently retired after turning 55 — more out of not finding happiness in my job rather than a planned event. I have talked to a few financial planners, and I have received varied advice on my financial outlook.

I am looking for advice on whether what I have is enough to keep going with my current lifestyle. I don’t have any life insurance or long-term care insurance — I only have medical insurance.

I am a single and healthy woman with no children or debt. I have never been married nor do I plan to get married. I have been with a partner for close to 10 years, and we keep our finances separate for the most part.

I have two homes, both debt-free. I pay for our primary residence expenses, and he pays for our vacation-home expenses. I expect to inherit close to $500,000, but I am not counting on that in my planning.

I hope to travel and have included that in my annual expenses.

Here is a snapshot:

I think I averaged around 7.5% return on my investments (mostly Vanguard index funds). I reinvest all my dividends and capital gains. I found seasonal work which nets me around $7,000 per season.

I plan to take Social Security when I am 70 and expect to get around $3,300 per month. Can I stay retired while I look for fun and meaningful work? And do I need to get additional insurance?

Keeping Track of my Finances

Dear Keeping Track, 

I’m relieved to hear that you are planing to look for work, even if you are retired right now. Given that you’re 55 and healthy, you have so much time to bring in more income than if you were to retire right here, right now.

Now, don’t get me wrong. You are in a very strong financial position, with your investments and your paid-off real estate. I didn’t see anything in your breakdown about savings, but assuming you have money set aside in accounts for emergencies for this newfound retirement, you could very well live off of that while you find a job where you’ll feel satisfied.

But considering you’re only 55, you could be in retirement for decades, perhaps even 40 years or more, depending on your life expectancy — and that money can disappear before you know it. To stop working for good would likely not be in your best interest, considering future expenses.

Healthcare alone is a huge asset drain for retirees, especially the older one gets. And long-term care, should you need it, can cost thousands of dollars a month. In 2023, a private room in a nursing home cost an average of $9,733 per month in the U.S, according to Genworth, a financial-services company headquartered in Richmond, Va. A home-health aide costs an average of $6,292 per month.

I’m not sure how you’re currently insured for medical expenses (whether it’s under COBRA or not, depending on when exactly you retired), but you’ll find private insurance can be expensive. Finding a job you love with health benefits can really help offset those costs until you get closer to Medicare eligibility at age 65. Even if you choose not to work that entire time, the less time you have to pay for private insurance on your own, the better for your budget.

Long-term care insurance is definitely an option to consider, though it isn’t a necessity. Some people on the wealthier side tend to self-insure, which means they pay for their own expenses if the time comes, while other individuals might not qualify at all. Because of your age and health status, the rates could be more favorable for you now than if you were to try enrolling in a plan later on.

But be judicious in your insurance shopping — don’t jump on the first thing you see, compare all of the costs of various plans, and know exactly what coverage you’re receiving. There are plans that are a hybrid of long-term care insurance and life insurance, which could offer a death benefit should you die before needing any long-term care.

Life-insurance plan

A life insurance plan could also make sense for you or your partner, especially if you depend on each other to live comfortably. Term life is cheaper than whole life, though just like with a long-term care plan, you should vet your options carefully. And again, some people choose not to pay for this insurance if they have enough assets to cover them or their loved ones.

Also, I’m glad to hear you’re not counting your inheritance in your financial calculations. You never know what could happen, and the person leaving behind that inheritance could end up needing that money before passing it on.

As for Social Security — it is great that you’re estimating what you’ll be getting from Social Security, but be extra certain of that figure by making an online account with the Social Security Administration. You can check your earnings history and personal information to make sure the Administration has everything correct, too.

Keep in mind, you could potentially get more in benefits if you work between now and claiming — you might even find a job with a salary that bumps up your benefit. (And even though you’re planning to claim at 70, run the numbers in a few claiming scenarios, so that you’re not banking on an overestimate should your needs change later in life).

The last thing I’ll leave you with is about your living arrangements. It’s fantastic that you have a system in place with your partner of 10 years, but be sure to have absolutely everything protected — for both of your benefits. Unmarried couples don’t always have the same protections as married couples, such as automatic transfer of certain assets and Social Security survivor benefits. An attorney can help draft documents that will take care of each of you after death, or in the event of a break-up.

For example, if you own the homes together, but one pays for one property and the other pays for another, it could get messy if things don’t work out, or even if it does but one person dies. Talk to your partner seriously about your futures and how to ensure the other is secure after the first person is gone. That includes having beneficiaries listed, creating wills and possibly speaking with an estate planner about the overall wellbeing of the wealth you’ve amassed together.

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