Dear Quentin,
I’m 63 and desperately hate my work. I’ve had the same job for the last 19 years and every day I’m there, I just want to quit. I have $330,000 in cash and investments, $30,000 in my employer’s retirement fund and a remaining mortgage of $83,000. The payment (including property taxes) is $1,255 a month.
I’m still too young to take full Social Security. However, part of me just wants to cash out some investments now, and pay off the mortgage. I’d like to start over, maybe start a business and live out my days doing something I like. At the same time, I’m seeking mental-health care because I feel like my issues with depression are starting to mount.
What’s your take?
Ready to Make a Change
Dear Ready,
Don’t make any life-changing decisions when you are in the midst of a mental-health crisis or a mental-health recalibration. Take care of yourself first, and make sure you are not taking action — reversible actions — from a place of fear, anxiety and/or depression. Your perception of your life may be altered, and your ability to manage stress and your expectations for the future.
Honestly, if we all thought about today or our most stressful day multiplied by X number of years, we would likely feel the same way as you do now. Sometimes, it helps to focus on today, and set short-term goals and rewards to ease the pain of a seemingly endless “futurama” — a preview of something that is not yet a reality (per Merriam-Webster).
If you don’t have to plunder your retirement fund and still have enough money left over for a health emergency fund (6 to 12 months) and you want to save yourself that $1,255 monthly mortgage repayment, it may help ease some of the financial burdens you feel and provide you with a substantial reward — zero mortgage — after all of your hard work.
As to your question about what age you should start withdrawing your Social Security benefits: a recent study in the Journal of Financial Planning advocated delaying Social Security benefits. The report, written by Wade Pfau and Steve Parrish, co-directors of the Center for Retirement Income at The American College of Financial Services, actually advises waiting until 70.
The authors found that if you invested your savings at this point in your life and claimed Social Security early, you would be unlikely to beat the market. “To generate the returns needed to beat the benefit of delaying Social Security, there would need to be a high tolerance for risk and an aggressive asset allocation, not to mention plenty of discretionary wealth,” they concluded.
Starting a business at 63, even in a field that you enjoy, would be a highly risky proposition, and would likely involve more capital than you are prepared to invest and/or would expect to invest. You may wish to start with a “side hustle” (I hate that term, but they are increasingly useful for people to explore their more creative side and, all going well, make extra money).
You should, if at all possible, limit your mortgage repayments to 30% or less of your monthly income. There are pros and cons to paying off your mortgage, particularly if you are planning to change jobs at some point in the near future, or even move to a part-time role. I’m assuming that you did not take out your mortgage at a record-low interest rate.
You are in a good position to seek the help of a financial adviser and a cognitive therapist to deal with the health of your money and your mind. Both should be protected, and cherished. Look after yourself, eat well, exercise regularly, and get plenty of sleep. All of this hard work and retirement planning will be worth it if/when you put your mental health first.
Readers write to me with all sorts of dilemmas.
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