Q I'm almost 58 and would like to retire at 60, taking the widow benefit. My late husband's Social Security payment would be $1,390 in addition to a $300 monthly pension. We saved more than $500,000, half in fixed annuities earning 4 percent, the rest invested conservatively. I am debt-free and in good health.

Of three financial advisers I've talked to, two want to sell me complicated annuities and the other one (whom I trust the most) says I'll be fine as is, considering my modest lifestyle.

I recently read that you should have 11 times your salary saved when you retire. Do you agree that I'm financially ready to retire? I feel like I'm stepping off a cliff. And how can I protect my assets once I'm retired?

I'm not against working a few hours per week, but my body is tired of sitting in a cubicle for so many hours.



A In a column this length I can't address whether you're financially ready to retire or stepping off a cliff. I have several reactions to your questions, however. Hopefully they'll help you make an informed decision.

First, I'm wary of complicated annuities. When it comes to annuitizing income I prefer relatively simple, plain-vanilla products. I wonder if it makes sense to annuitize more of your income since that's what you've already done with a good chunk of your savings -- and Social Security is also an annuity. I agree with the insights of the financial adviser who took into account your modest lifestyle. It's underappreciated how important spending habits are when evaluating future financial security.

That said, I think the main issue is this: What do you want to do for the next 10 to 20 years? Do you really want to retire or do you want a different job, more flexible work schedule or another career? It's the critical question because the answer will dramatically affect your finances, including when to take Social Security.

Retirement is changing. In a scholarly paper, "Back to Work: Expectations and Realizations after Retirement," economist Nicole Maestas of the Rand Corp. found that 26 percent of retirees reverse their decision and return to work, full time or part time. The comparable figure for the youngest retirees is 35 percent. She and other researchers are making a compelling case that the transition to retirement increasingly includes downshifting to part-time work rather than living solely off Social Security and savings.

The push toward working longer is driven by the enhanced financial security that comes from earning an income, even a slim part-time one. It allows people to leave their savings alone and hold off filing for Social Security benefits. Another factor is that for many people work is a social environment, a community.

My sense from your e-mail is that it seems you want to move on to different employer or paid activity rather retire and not work. It's an easy sentence to write and hard to accomplish in the current economic environment, but I would tap your network of friends and acquaintances to explore what you could do next. What job would engage you? Consider your options, talk to people, run through some possible job scenarios to see if it makes more sense to plan on a new job in two years when you're 60.

Chris Farrell is economics editor for "Marketplace Money." His e-mail is cfarrell@mpr.org.