MW My husband and I have $7K in Social Security and $2.5 million in stocks. What could go wrong?
By Quentin Fottrell
'I hope to live off of the combination of Social Security and the TIPS ladder'
"We plan to sell our current home and return to Texas to be near family." (Photo subjects are models.)
Dear Quentin,
I am retiring next year, but I hope to wait until January 2027 before I draw Social Security at 691/2. My husband will also retire in January 2027 when he turns 65. I estimate our combined Social Security income at $7,000 a month. Furthermore, I have built a 15-year TIPS ladder from my husband's old retirement accounts and additional funds from an aftertax mutual fund; that should provide an additional $60,000 per year.
Currently, I have $1.9 million in my 401(k) and $200,000 in a 457(b) managed annuity account. My husband has about $100,000 (S&P 500) in his current workplace IRA. We have $500,000 in a money-market account and $220,000 (S&P 500 SPX) in a mutual fund. We own our home, which may sell for $400,000 when we retire.
We own a condo in which our son now resides. We also own a 1.6-acre lot ($250,000), which has access to a small lake/creek. I hope to live off of the combination of Social Security and the TIPS ladder. We plan to sell our current home and return to Texas to be near family. I would like to use the money from the money-market account and mutual fund to perhaps build on the lot or sell it to purchase a retirement home.
I estimate a home in the range of $700,000 to $900,000. I would like to take the funds from the sale of our current home to fund long-term care. I know my portfolio is aggressive, but I thought with one-third of our total retirement funds in a TIPS ladder we could tolerate the risk. I don't know what I don't know. Identifying the weaknesses in my plan would be much appreciated.
Soon-to-be Retired
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You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
You can now look forward to moving back to Texas in style.
Dear Soon,
Indulge me while I get meta on you. I chose the sun-loving couple for the image, not because they look smug but because they look happy.
Given your current finances and the amount of strategic decisions you've made, you have earned the right to be happy. Millions of dollars in the stock market and being mortgage-free give you options, and options (plus liquidity) give you freedom, if you play your cards right. You can now look forward to moving back to Texas in style. It may not be as cheap as you think, depending on where you land.
I'm only slightly befuddled by your decision to collect Social Security at 691/2 instead of waiting until you're 70 for that extra six months to maximise your benefits. You seem to be a stickler for detail, so that came as a surprise. You could have taken withdrawals at 62, but if you get an additional 8% every year after your full retirement age $(FRA)$ until you reach 70. Those delayed retirement credits are worth a pretty penny.
Retirement benefit is reduced by up to 30% if you claim Social Security at 62, instead of FRA. For every year after full retirement age, 67 in your case, you could get another 8% until you reach 70. If your Social Security benefits were a fraction of your husband's benefits, you would also be entitled to spousal benefits when you reach the eligible age, which can be as much as 50% of your husband's benefits; if he predeceases you, you would be entitled to as much as 100% of his benefits.
Your TIPS ladder is another good decision, given that you purchased them when interest rates were high, if not at their peak. For those who are unfamiliar: A Treasury Inflation-Protected Security (TIPS) ladder currently yields an interest rate of about 4.5% as of mid-October, so a $1 million investment would generate $61,000 in inflation-adjusted annual income for the next 30 years.
That said, there are wrinkles in your plan, rather than weaknesses. You have time to iron them out, I've no doubt, but you should be aware of them nevertheless. You are heavily invested in equities; while that's OK if you 1) have a high risk tolerance and 2) don't have to withdraw money from your investments in a down market, you may want to think about being more diversified as you enter your retirement years.
There are wrinkles in your plan, but you can iron them out.
You will also be facing required minimum distributions from your 401(k) at 73; the sooner you start taking them, the better. Otherwise, you will face a larger tax bill if you want to use these funds during your lifetime. Cleaning out your money-market and mutual funds would also leave you with less liquidity for unexpected events, whether it's a pricier house in Texas or a medical event (or eventuality).
In your financial rundown, you don't mention long-term-care insurance. The cost of long-term-care insurance at age 60 is around $1,200 a year for a man and $1,900 a year for a woman, for the same policy, according to this guide from SmartAsset. Without one, you will need to figure out what your plan is if you or your husband need care; that can cost as much as $10,000 a month, depending on the facility and location.
You may wish to discuss wills, trusts and power-of-attorney documents with your spouse. A durable power of attorney allows the trusted individual (the agent) to retain power of attorney even after the person who created the document (the principal) has become incapacitated. A general power of attorney expires when the principal has lost mental capacity and is usually limited to certain legal or financial transactions.
Finally, an advanced healthcare directive informs your doctors what action you want them to take if or when you are unable to make those decisions yourself. You may wish to list your husband as your healthcare proxy to carry out those decisions. Unforeseen medical issues can put pressure on a marriage, as this couple discovered. Also, ensure you have successors to your POA and healthcare directive.
You'd done very nicely up until now. Diversification, taxes, liquidity, long-term care and estate planning all deserve your attention.
Related: 'My retirement is going to be a disaster': I'm 59 and have $45,000 in my 401(k). I earn $72,000. Am I doomed?
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-Quentin Fottrell
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October 27, 2025 08:08 ET (12:08 GMT)
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