By no means do I offer any insight into my financial situation to brag, but rather to help show how I got where I am, and hopefully help you feel that you might be able to do this too. Or not.

Of course the most challenging and frightening aspect of going into retirement is: where will my post retirement income come from?

Savings. The answer is savings. Specifically, 401k savings. (No, I’m not a trust fund baby either.) The IRS has an age of 55 rule that allows retirees to withdraw funds penalty free from their 401k if they are separated from their employer on or after the year they turn 55 (IRS cite).

I was able to save $24,000 per year into my 401k for the last six or so years of my employment. Before that, I had saved into my 401k, just not that much. And my employer offered a match as well. When I finally get around to retiring, I should have about $500,000 saved.

(To put any curiosity aside immediately, my taxable income wasn’t even over $100,000 per year, so I wasn’t exactly “rolling in it”. But I guess that is relative too.)

Having that much saved is somewhat comforting, but it also isn’t the only funds I have saved. But since I can’t access those additional funds – in IRAs and Roth IRAs – until I turn 59 ½, they aren’t relevant. Yet.

By the time I retire, my wife (who is older than I am, and already [semi-] retired) will start collecting Social Security. She also has full access to her retirement accounts. So between SS, her retirement accounts, and the income from my 401k – assuming a minimum of about a 4% initial withdrawal rate – our taxable income will actually be the same as pre-retirement, or it might even go up a little after retirement.

We worked with an Ameriprise Financial Advisor for close to two decades. So we planned all this. Way ahead of time.