Help Me Retire: I’m 58, rent a part of my house, have a physical job with ‘serious aches and pains’ and want to retire. Can I?

I have no debt except for my house, for which I have $220,000 remaining. I made an apartment on the first floor that I have been renting out for several years. My plan is to move into the apartment after retiring and rent the main house, which will cover my mortgage of $1,300 per month or more.

I have moderate degenerative disc and sciatica, and will need a new knee soon. I still look forward to an active lifestyle in retirement without the drudgery.

I would like to retire next year at age 59. Can I?

See: We’re retired, have about $350,000 in our accounts and live comfortably with Social Security and pensions. Should we pay off our $132,000 mortgage?

Dear reader, 

I hear where you’re coming from. A recent report from the National Academy of Social Insurance just spoke to how tough it can be for workers in physically demanding jobs. Unfortunately, some people are not able to continue their work but they’re also not able to afford an early retirement just yet. 

It is great that you will be getting a pension, that you have money saved in other vehicles and that you’ll also be receiving rental income in retirement. There are far too many factors to consider to say whether or not you’re OK to retire next year, but you should start by getting serious about the numbers.

Start with the basics: What money is coming in and what money would be going out? For example, know when exactly your monthly pension can begin, and what the tax bill will be on your retirement income. Do you qualify for Social Security? If so, add that into your calculations, but get a few estimates for what that may be when you begin claiming, just in case it is more or less than you expected it to be when the time comes. Of course, include your rental income, but be ultra-conservative and account for times when your property may be vacant. Keep in mind what you’ve saved separately in the 403(b) and other accounts is great to have, but you may not want to dwindle it down too fast too soon so you have an extra cushion to fall back on. (Also, check with your provider about distribution rules, such as if the 55 rule applies or if you need to wait until 59 ½ years old to withdraw penalty-free.)  

Now do the same thing with your expenses. Take into consideration every single expense you could possibly expect to have in retirement, as well as the things you can’t yet know for sure, such as health bills, taxes, home and rental improvements and so on. You want to avoid an unpleasant surprise that totally destroys your financial plans, your security and potentially your lifestyle. 

And don’t forget health insurance. If you leave the workforce at 59 and don’t have coverage any other way, you still have six years to go until you qualify for Medicare. You mentioned a few health issues, so you should really weigh your options and find what’s best for you and your health coverage in the short-term. Private insurance could end up being very costly. 

Also see: I’m a 40-year-old teacher who doesn’t want to wait 15 years to retire. Can I live off the rental income from my three properties?

Being a landlord is tough. The rental income is great, of course, but just be proactive. Have money on hand for repairs, be prepared for times of vacancy and do your due diligence when welcoming new tenants. Of course, there are other benefits to renting: you’ll live in the home, so you’ll be close by if something happens; you could see the value of your property rise over time; and your mortgage will be paid off thanks in part to that extra income. 

But I wouldn’t give up on the idea of working at all anymore. You may want to at least consider doing something else. 

Maybe your current role isn’t for you anymore, but what about another job? The beauty of this path is that you’re already thinking of leaving the workforce completely. If you were to take on a part-time job you would still have more freedom — but also more income and possibly health insurance. Perhaps you can use the skills you already have, or find classes to build on your expertise. 

Having some sort of job after you leave this one could help in a few ways: it would make you more money so you could postpone running down your savings, it could help with your health insurance and it’ll keep you active — just like you want. 

Readers: Do you have suggestions for this reader? Add them in the comments below.

Have a question about your own retirement savings? Email us at HelpMeRetire@marketwatch.com