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Retirement
Can you retire with $500K?
October 6, 2000: 6:11 p.m. ET

CFP Gary Ambrose said a man in his 60s might want to work part-time
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NEW YORK (CNNfn) - If you're in your 60s and you have $300,000 in savings and $200,000 in property, you might think you have enough to retire comfortably.

  VIDEO  
graphic Gary Ambrose, a certified financial planner in New York, answers questions.
Real 28K 80K
Windows Media 28K 80K
But if you need annual income of $50,000, it might be better if you worked part-time for a few years first to build up your portfolio, said Gary Ambrose, a certified financial planner in New York.

Ambrose answered questions on CNNfn's Your Money and answered the following question for CNNfn.com.

Dennis writes: I am 63 and my wife is 62 and we would like to retire or at least go part-time. Our combined income is $110,000 from salaries. We have $300,000 in stocks, bonds, mutual funds and 401(k) investments.

We own a home worth $160,000 that has a $115,000 mortgage, plus two parcels of land worth $200,000 that are debt-free. We need $50,000 after taxes to cover all expenses including the mortgage. What will it take for us to have enough to retire? Should we use part of the principal as we go along the help meet our needs?

Dennis, assuming you rent the two parcels or convert them into financial assets, you will have an income-producing asset pool of $500,000. Your $50,000 annual cash flow needs would require a consistent 10 percent after-tax yield each and every year ... and no cushion for emergencies or protection from inflation!

While longevity is a wonderful blessing, it requires financial adjustment. Rather than quitting cold turkey, consider shifting to fewer working hours and perhaps reducing work by 40 percent or 50 percent over the next three or four years. This modification, in your particular case, would be far more fiscally prudent.




Do you have a question about whether you can afford to stop working? E-mail our experts at retirement@cnnfn.com.




Many people have begun consulting practices in their "retirement" years, dramatically reducing their work hours while increasing their income. Perhaps your many years of experience can be utilized in this manner?

Alternatively, five-to-10 more years at your current positions, allowing for portfolio growth and modest annual savings, will bring you to a successful retirement.

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.