Should I buy a business or suck it up at a job(s) with a pension.

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 1:42 pm

I am 48 years old and my wife is 44. We are from Illinois and I am a Police Officer and my wife is a Teacher.

We have three kids, 11, 13 and 15 years old.

Our Gross Annual Income from our jobs is: $190,000.00 of which we defer the maximum to my 457 and to her 457 and 403(b), ($55,500.00) bringing our Gross annual income to $134,500.00

Dividends: In 2017 we generated $32,000.00 in dividends and capital gains from our portfolio. All of which gets reinvested. About $10,000.00 of those dividends and gains came from the taxable side of our portfolio.

Our Net Annual Income: I am estimating based on our effective tax of 6% (after deductions and child tax credits) to be approximately $10,535.00 per month, or $126,420 per year.

Monthly Spending: Approximately $5,000.00 per month. This includes everything, utilities, gas, groceries, insurance, eating out, etc, etc. If we tried, we could get this figure lower but we have a weakness for deep dish pizza!

Debts: $0. We have zero debt. Our home is paid off and carry no other debt whatsoever.

Fixed Assets: A home worth approximately $275,000.00 with no mortgage. Two paid in full cars worth about $20,000.00

Savings & Investments: $1,602,487.00 in total broken down as follows.

Tax Sheltered:
My ROTH IRA : $144,010.00
Her ROTH IRA: $138,648.00

Her 403(b): $412,224.00
Her 457: $41,161.00
My 457: $252,365.00

Child #1 Education Ira: $11,743.00

Child #1 ROTH IRA: $7,440.00
Child #2 ROTH IRA: $7,433
Child #3 ROTH IRA: $3,100.00

Taxable:
Joint GNMA Bond: $43,406.00
Joint Total Stock Market Index: $539,944.0
Joint Prime Money Market: $1,010.00

The overwhelming majority of this money is invested in index funds at Vanguard. Mainly in VTSAX.

Pensions:
I can retire and collect my pension when I turn 50 if I choose to do so. However, if I retired at 55, I’d get fully paid for medical for my family and I.

My Pension at 50:
$5,300.00 month, $63,600 annually, from 50 years of age to 55 years of age with no cost of living adjustments until I turn 55. At which point my pension would increase to $73,140.00 annually with 3% COLA’s increases every year thereafter.

Medical would cost my family around $1,500.00 per month through my employer at a discounted rate of 50%. I can avoid this by jumping on my wife insurance and we'd pay $350.00 per month, if I retired at 50.

My Pension at 55:
$7,200.00 month, $86,400.00 annually with 3% annual COLA increases and fully paid medical for my family and I.

My wife will also receive a pension when she turns 55. Hers will be approximately $50,000.00 with 3% annual COLA increases. With no medical. We’d have to pay for our medical on the open market at this point IF I retired at 50 and she at 55.

Here is my question.

We both want to retire from our jobs. We no longer enjoy doing what we’re doing and I am looking for an alternative. To be honest we dread going to work and want our freedom. I can’t imagine myself putting in another 8 years to get the free healthcare. The thought of this is so depressing.

My wife loves teaching but the policies, mandates and other things they are now required to follow has made her job no where near as enjoyable as it once was for her.

As a result I am considering buying a full service car wash. No automatic or self- service bays. An inside operation with detailing and hand washing.

A friend of the family has operated one for 30 years and has made a lot money. He averages $5,000.00 per week net. I realize that is no guarantee that I will make that much or be as successful.

If I opened a car wash, he would help me get if off and running. By doing this I am hoping to generate a lot more income than I am now and hopefully allow my wife to retire. I feel that having him as a possible partner or mentor could be a good opportunity since he knows the ins and outs and what mistakes to avoid.

But I’m concerned because on one hand we have jobs we don't enjoy but with good benefits, we live comfortably and on the other hand I’m taking on a lot more risks and issues (headaches) that a business comes with.

We could even help pay for our kids college without the potential income a business could generate with our annual income from either our jobs, pensions or investments.

I’m also considering this business as hopefully a way to super size our nest egg, so that our kids will be financially well off with an inheritance down the road, in addition to the good money skills and lessons we are instilling in them.

My wife could then hopefully retire sooner and we could stop working at places we dread.

Although who’s not to say I might not dread working 7 days per week and dealing with employees that don’t show up to work. I realize this.

I have mixed emotions.

Do I stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA.

Or do I roll the dice and try a business like this car wash in hopes of far exceeding my current income. It would cost me between $600,000.00 and $800,000.00. to buy a business like this.

But it obviously would be more risky, require me to work more hours than I do now and it would be a new learning experience. One that I’ll hopefully enjoy.

Another option I thought of was retire at 50, go work at my friends car wash if after a few months it still interests me explore buying my own place. However, this then makes me ineligible for the free medical at 55 because I’d be retiring at 50 from my employer.

If I did this, my wife would have to enroll through her employers medical coverage and that would cost us $350.00 per month for family coverage.

After having saved all this money with no debt I still feel as though early retirement isn’t within reach because of healthcare costs.

My employer provides free healthcare while I’m working. I’m fortunate enough that I have never had to contribute a penny in 22 years.

But we’ve reached a point in our lives where we want our freedom! More than anything.

But my wife feels uncomfortable/nervous if we retired from our jobs until our kids were done with college because our income could easily allow us to help pay their way.

I would love to hear your thoughts and thank you!

Sincerely,
Vinny- frustrated in Illinois.

User avatar
Sandtrap
Posts: 5360
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Sandtrap » Sun Jan 21, 2018 1:51 pm

"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

you've done great . . . keep it up :sharebeer
j :D
Last edited by Sandtrap on Sun Jan 21, 2018 1:56 pm, edited 1 time in total.

KlangFool
Posts: 10402
Joined: Sat Oct 11, 2008 12:35 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by KlangFool » Sun Jan 21, 2018 1:56 pm

Sandtrap wrote:
Sun Jan 21, 2018 1:51 pm
"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

j :D
+1,000....

KlangFool

RRAAYY3
Posts: 926
Joined: Thu Jan 17, 2013 12:32 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by RRAAYY3 » Sun Jan 21, 2018 1:58 pm

It’s an absurd amount of risk to take on top of working more hours

You want your freedom? Buying, learning, starting, maintaining a business will give you the exact opposite for the foreseeable future

Work til you don’t have to and try and see the positives of your job(s)

Or buy a car wash.

User avatar
Sandtrap
Posts: 5360
Joined: Sat Nov 26, 2016 6:32 pm
Location: Hawaii😀 Northern AZ.😳 Retired.

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Sandtrap » Sun Jan 21, 2018 2:01 pm

RRAAYY3 wrote:
Sun Jan 21, 2018 1:58 pm
It’s an absurd amount of risk to take on top of working more hours

You want your freedom? Buying, learning, starting, maintaining a business will give you the exact opposite for the foreseeable future

Work til you don’t have to and try and see the positives of your job(s)

Or buy a car wash.
There are occasional posts asking about a Car Wash and other types of franchises as easy money or alternate business paths. Usually folks that are not businessman.
This usually crops up so I'll post it ahead of time.

Car Wash Business
https://www.youtube.com/watch?v=U3Qr6omvRVI

jucor
Posts: 158
Joined: Tue Jun 02, 2015 8:35 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by jucor » Sun Jan 21, 2018 2:07 pm

I'd vote for "suck it up" -- you have an amazing pension and health care benefit package at 55 -- the free insurance for your whole family is worth large $$ -- I'm guessing the plan is a good one, and the full cost is likely >$18k/year for premiums with fairly good options and low co-pays.

Private business has lots of risks, plus the major headache of managing employees and doing all of the paperwork. Believe me, dealing with your employees will be a major headache.

The grass may seem greener, but i'm guess it is not, and I'm guessing you can't go back to the same position once you leave.

Can you try changing positions w/in the PD? That might offer a change of scene, etc. to hwlp you get through.

User avatar
sergeant
Posts: 934
Joined: Tue Dec 04, 2007 11:13 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by sergeant » Sun Jan 21, 2018 2:11 pm

Congrats, you have done a great job preparing for early retirement. My first recommendation is take a nice vacation in a warm climate to recharge your batteries. No way should you leave now to buy a car wash! Get to 50 and the pension and take it year by year. Are you sure that you get 3% COLA automatically, no matter what the CPI does?

I do think it is a good idea to go work for your buddy with the car wash. After a few months I'm pretty sure that you will no longer want your own.

How about jumping to another division or position or shift. A change of scenery usually helps to get over these types of career humps.
Lincoln 3 EOW!

GmanJeff
Posts: 167
Joined: Sun Jun 11, 2017 7:12 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by GmanJeff » Sun Jan 21, 2018 2:13 pm

The enhanced pension and paid medical are worthwhile benefits which will last as long as you do, so they are arguably worth pursuing despite your disenchantment with the job. Have you considered reassignment within the PD, to change things up? Maybe become an instructor at the academy, go into investigations as a detective, try for promotion so you have different duties as a manager rather than as a patrol officer (if that's your current role), or go for a specialty assignment of some kind - K-9, SWAT, Crime Scene Search, Firearms Instructor, Defensive Tactics Instructor, specialty Task Force Officer (e.g., get assigned to the local FBI Joint Terrorism Task Force, to a regional gang task force, a violent crime task force, etc), School Resource Officer, Motor Squad, etc? Maybe even change shifts or precinct/station assignments? If you're senior enough in rank to qualify, consider putting in for the FBI's National Academy at Quantico, which is universally seen as a great experience.

Eight years sounds like a long time, but will go by quickly, and perhaps all you need is just something different to do at the same employer, rather than leaving your secure, high-benefits employment altogether.

carolinaman
Posts: 3289
Joined: Wed Dec 28, 2011 9:56 am
Location: North Carolina

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by carolinaman » Sun Jan 21, 2018 4:50 pm

Starting a new business is a risky endeavor. Most startups fail in the first year. You should be very cautious about that. You could wind up losing a chunk of your hard earned savings. You would be better off taking another job or part time job to supplement your income in retirement.

The ideal for you would be to find a way to get to 55 in your present job because the pension and paid healthcare is so good. Perhaps a position change of some sort.

I would recommend doing some financial analysis to see the feasibility of retiring at 50 versus 55. Other variables could be one of you retiring at 50 and the other at 55 to see the viability of each plan. One challenge you have is your children's college education. Three kids over the next 10 years will be a major expense.

FWIW, paid healthcare is a great benefit but should not be the holy grail that drives your entire decision, at least in my opinion. Your mental health and life between now and 55 are also important. I recommend looking at this from multiple perspectives so you are not stuck with healthcare at 55 or nothing at 50. It might be worth paying a fee only financial planner to help you with the analysis. You have done a great job saving so far, so you may have more options than you realize. A financial planner will consider your investments but more importantly, your budget and how long your money will last under different scenarios.

One last thing. As you must be well aware, the Illinois pension fund is woefully underfunded. It is difficult to say what that means to pensioners but there is some real possibility of a reduced benefit in the future. If you are in that one or a similar one, you should hedge your bets by not totally relying on 100% of your pension and COLA. It seems as you have done that by the savings you have achieved.

Best wishes.

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 4:59 pm

Thanks for all the feedback thus far!

In response to some of the questions that were posed:

- My current medical coverage is an excellent plan which I've been grandfathered into and not available to new hires. It costs the city $34,900 annually for this BCBS PPO Plan which is covered by the city entirely. And it would be the same plan I would keep if i stayed till 55.

- Once I leave the job, I can't go back.

-The 3% annual COLA's are automatic regardless of the CPI. Unfortunately this is why our state's pension funds are in a mess. Five state pensions in Illinois, my wife's and mine are two of the five, that have this expensive annual automatic 3% COLA provision built into them. Not sustainable, which is why I saved and continue to save as much as I do. Just in case we go the way of Detroit.

-As far as possibly moving around within my department or other areas of interest related to law enforcement, I honestly do not think it will help.
I feel burnt out. I do need a change of scenery but not in law enforcement. Many colleagues of mine with similar amounts of time on the job, feel the same way. They want out.

The older Officers on my dept are sticking around because they can not afford to leave without the insurance. Most departments in my area do not even offer retiree healthcare, which makes me feel blessed in one way but cursed in the other sense because now "I feel stuck" to stay for the insurance because of its enormous benefit.

If the age to qualify for free medical was offered at 50 years of age and not 55, I don't honestly think I would be contemplating a car wash. With paid for medical for my family and I, and a monthly pension of $5,300.00 per month I could have my freedom!

I realize that the business could be a lot more work and less freedom, but I wonder to myself if I did generate a substantial amount of money like my friend, (3k to 5K a week net) if it would be worth it? And if it would be more enjoyable or tolerable than what I am doing now.

These are the nagging questions I wrestle with in my head.

I'm wise enough to realize that most people don't enjoy their job. It's work, it usually sucks and that's how it is and my situation is not any more unique than the person next to me. My job now feels like a prison sentence and I am going to carefully weigh my options.

I am going to meet with my friend next week to get a better perspective on the issues involved and hopefully gain a much better understanding from him. I won't make any hasty decisions but I really appreciate your comments, suggestions and feedback. It definitely helps!

If there are any owners out there, please chime in. Thanks Again!

student
Posts: 2575
Joined: Fri Apr 03, 2015 6:58 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by student » Sun Jan 21, 2018 5:08 pm

You are two years from retirement with pension. I would say wait. In fact, I would wait until 55. Yes, it is a set of golden handcuffs but they are very difficult to come by these days.

Grt2bOutdoors
Posts: 19301
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Grt2bOutdoors » Sun Jan 21, 2018 5:09 pm

Sandtrap wrote:
Sun Jan 21, 2018 1:51 pm
"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

you've done great . . . keep it up :sharebeer
j :D
A Granada? How about a Pinto? This idea is as bad as buying a Pinto.

Understand the job you have is stressful, totally get it. Can you talk with someone? Burn out is dangerous in a job as dangerous as yours, you don't want these thoughts to keep you preoccupied when you are on the job. Maybe you can be a silent partner in a business where you don't have to put up so much capital upfront. 600K is 3 college educations, today! You hit the proverbial lottery and now you are thinking the grass is greener on the other side but look at what you will be risking here besides your health:

Free healthcare for life - do not underestimate the value of this. Trying getting quotes today on the open market, you will be shocked.
Guaranteed income - there are no guarantees in business, someone who is successful today may not be on their next venture
$600-$800K; that there is 6.5 years of net income - if you save $5K a month, we are talking about 13 years of savings. You will be retired in half the time.
You can pay for your kids college - if you can not do it on $10K a month, who can?

No way, I would suck it up and plow ahead forward. Take it one day at a time, but don't risk your family's security for this. If you want to open a car wash, do it after you've retired, not before.
Last edited by Grt2bOutdoors on Sun Jan 21, 2018 5:23 pm, edited 2 times in total.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 5:11 pm

carolinaman wrote:
Sun Jan 21, 2018 4:50 pm
Starting a new business is a risky endeavor. Most startups fail in the first year. You should be very cautious about that. You could wind up losing a chunk of your hard earned savings. You would be better off taking another job or part time job to supplement your income in retirement.

The ideal for you would be to find a way to get to 55 in your present job because the pension and paid healthcare is so good. Perhaps a position change of some sort.

I would recommend doing some financial analysis to see the feasibility of retiring at 50 versus 55. Other variables could be one of you retiring at 50 and the other at 55 to see the viability of each plan. One challenge you have is your children's college education. Three kids over the next 10 years will be a major expense.

FWIW, paid healthcare is a great benefit but should not be the holy grail that drives your entire decision, at least in my opinion. Your mental health and life between now and 55 are also important. I recommend looking at this from multiple perspectives so you are not stuck with healthcare at 55 or nothing at 50. It might be worth paying a fee only financial planner to help you with the analysis. You have done a great job saving so far, so you may have more options than you realize. A financial planner will consider your investments but more importantly, your budget and how long your money will last under different scenarios.

One last thing. As you must be well aware, the Illinois pension fund is woefully underfunded. It is difficult to say what that means to pensioners but there is some real possibility of a reduced benefit in the future. If you are in that one or a similar one, you should hedge your bets by not totally relying on 100% of your pension and COLA. It seems as you have done that by the savings you have achieved.

Best wishes.
You have hit the nail on head regarding my mental health between now and 55! That's what pretty much driving my decision to get a business and leave the department. But I understand the risks.

It would be ideal for me to stay till 55 because with paid for healthcare my wife could retire at 50. And we could tap into our 457's without penalty and pay for our kids college.

You are correct regarding our woefully underfunded pensions. It's not a matter of IF but WHEN benefits will be reduced. The TRS in IL is already looking into a Tier 3 pension for new teachers. Under Tier 1 teachers could retire at 55 with a reduced pension/penalty and retire at 60 with full benefits and no penalty/reduced pension.

Under Tier 2 teachers have to be 67 to avoid the reduced pension with penalties. The situation keeps getting worse. My wife is in Tier 1 but that still doesn't give us much comfort.

RRAAYY3
Posts: 926
Joined: Thu Jan 17, 2013 12:32 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by RRAAYY3 » Sun Jan 21, 2018 5:16 pm

If I told you I was torn between:

1. Go to work - set family and self up for life in a few years

2. Start a car wash

What would you tell me?

mouses
Posts: 3815
Joined: Sat Oct 24, 2015 12:24 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by mouses » Sun Jan 21, 2018 5:20 pm

I would at least wait until you're fifty.

I would run far, far away from the car wash idea. You are in a very good place financially now, that sounds like a disaster that could wipe your savings out, and than what.

What about some other job after fifty, since within the department doesn't interest you? You and your wife could start looking around now to see what fields interest you. Maybe your wife would find working at a private school interesting. Recently I met a plumber who retired from being a police officer. I think they have to go through some sort of apprenticeship, which probably requires union connections, but I suspect they make a mint.

HJG0989
Posts: 157
Joined: Sat Oct 13, 2007 2:18 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by HJG0989 » Sun Jan 21, 2018 5:21 pm

I was where you are mentally and emotionally 8 years before retiring. I am so glad I hung in there. My spouse and I now have Federal BCBS for life for a low monthly premium. I worked on improving my attitude and worked toward being fully engaged in my tasks. I also started using vacation time for long weekends to shorten my work weeks.

Good luck with your big decision and nice job in saving for retirement.

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 5:22 pm

Grt2bOutdoors wrote:
Sun Jan 21, 2018 5:09 pm
Sandtrap wrote:
Sun Jan 21, 2018 1:51 pm
"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

you've done great . . . keep it up :sharebeer
j :D
A Granada? How about a Pinto? This idea is as bad as buying a Pinto.

Understand the job you have is stressful, totally get it. You hit the proverbial lottery and now you are thinking the grass is greener on the other side but look at what you will be risking here besides your health:

Free healthcare for life - do not underestimate the value of this. Trying getting quotes today on the open market, you will be shocked.
Guaranteed income - there are no guarantees in business, someone who is successful today may not be on their next venture
$600-$800K; that there is 6.5 years of net income - if you save $5K a month, we are talking about 13 years of savings. You will be retired in half the time.
You can pay for your kids college - if you can not do it on $10K a month, who can?

No way, I would suck it up and plow ahead forward. Take it one day at a time, but don't risk your families security for this. If you want to open a car wash, do it after you've retired, not before.
Many excellent points, I will share all of these with my wife tonight.

I have tried shopping for healthcare on the open market and I was looking at a policy with a $13,500 deductible! with an average premium of $1,200.00 per month. My income did not qualify me for subsidies under the ACA. But this was a real eye opener. My current deductible is $3,500.00

The paid for healthcare at 55 really is a set of golden handcuffs. I could bite the bullet and pay the discounted rate for insurance when I turn 50, but it's tough thinking about writing that check every month for at least $1400.00 money that I would rather give and spend on my family. $1,400.00 is the rate in 2018 and will most likely be more in 2020 when I am eligible to pay the discounted rate.

Thanks for all the reality checks, much appreciated.

Dottie57
Posts: 4643
Joined: Thu May 19, 2016 5:43 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Dottie57 » Sun Jan 21, 2018 5:22 pm

KlangFool wrote:
Sun Jan 21, 2018 1:56 pm
Sandtrap wrote:
Sun Jan 21, 2018 1:51 pm
"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

j :D
+1,000....

KlangFool
Agree here too.

TwstdSista
Posts: 987
Joined: Thu Nov 16, 2017 4:03 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by TwstdSista » Sun Jan 21, 2018 5:26 pm

The husband and I are the same ages as you and your spouse, but we do not have kids. Just for reference, our health care this year jumped from $757/month to $1266/month. That is a silver plan, but the deductible is still $3000 each, with a max OOP of $6450 each. Ouch.

The price jump might be similar next year. The ACA subsidies might disappear at some point. Of course, maybe they will actually "fix" health care at some point.

Friends of our paid $25000 for health care the year before turning 65, and that was a small business plan and also a couple of years ago....

There are just too many unknowns about health care costs now and in the future. Please keep that in mind when making your decision.

User avatar
ruralavalon
Posts: 14065
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by ruralavalon » Sun Jan 21, 2018 5:30 pm

sergeant wrote:
Sun Jan 21, 2018 2:11 pm
Congrats, you have done a great job preparing for early retirement. My first recommendation is take a nice vacation in a warm climate to recharge your batteries. No way should you leave now to buy a car wash! Get to 50 and the pension and take it year by year. Are you sure that you get 3% COLA automatically, no matter what the CPI does?

I do think it is a good idea to go work for your buddy with the car wash. After a few months I'm pretty sure that you will no longer want your own.

How about jumping to another division or position or shift. A change of scenery usually helps to get over these types of career humps.
I agree with seargent. You have no idea if you will like or do well in that business. Owning and managing your own business is not simple or stress free.

The year before we turned 65 we paid $23k for health insurance. It's a big consideration when retiring before age 65.

Consider yourself fortunate to have those benefits at age 50 and 55. They are far better than most have. Age 55 is an early retirement for almost anyone in any occupation.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

Global100
Posts: 41
Joined: Wed Dec 27, 2017 8:46 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Global100 » Sun Jan 21, 2018 5:43 pm

VINNY wrote:
Sun Jan 21, 2018 1:42 pm
As a result I am considering buying a full service car wash. No automatic or self- service bays. An inside operation with detailing and hand washing.

A friend of the family has operated one for 30 years and has made a lot money. He averages $5,000.00 per week net. I realize that is no guarantee that I will make that much or be as successful.

If I opened a car wash, he would help me get if off and running. By doing this I am hoping to generate a lot more income than I am now and hopefully allow my wife to retire. I feel that having him as a possible partner or mentor could be a good opportunity since he knows the ins and outs and what mistakes to avoid.
One consideration is the reliance on one other person to mentor your operation. If this one person experiences a traumatic medical emergency or fatal accident and is not around after the car wash is initially bought, then this could seriously affect the business during its critical infancy under your management.
Last edited by Global100 on Sun Jan 21, 2018 5:44 pm, edited 1 time in total.

User avatar
StevieG72
Posts: 835
Joined: Wed Feb 05, 2014 9:00 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by StevieG72 » Sun Jan 21, 2018 5:44 pm

Suck it up!

Pension and health care is a homerun! Stick with it.

I am a business owner and I may be working paste 55 due to affordability of health insurance.
Fools think their own way is right, but the wise listen to others.

abonder
Posts: 226
Joined: Sat Nov 03, 2012 10:52 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by abonder » Sun Jan 21, 2018 5:46 pm

I think the financial advice you’ve received is spot on. There’s a clear answer here and we all know it.

The other issue is your mental health and overall well-being. I think you’ve been too dismissive of how transformational a change in your role, your location, etc might be. Maybe there’s opportunity to mentor new officers, take on an administrative role, be part of a special task force etc. I know youve spoken to others who say that this is just burnout and it’s par for the course, but that is not necessarily true. You may be surrounded by others who don’t know how to cope, adapt, and grow in their field, so they feel that it is the norm and perpetuate this myth. A career coach/counselor, regardless of how much it costs, could be worth it, especially if there’s a way to make the last 8 years more enjoyable, which puts you into a dynamite financial situation.

I suspect that there is a way to choose the financially smart thing (keep current job) while also making enough changes to make going to work less painful. Make sure you use your vacation to get time away from work to rest and recharge. I see colleagues in your position who hoard their vacation in order to sell it back, without realizing that they are making themselves miserable when they could use the vacation, feel better about work, and bring home a little less money. You’re in an admirable position through hard work and good circumstances. Try to make the most of it.
Last edited by abonder on Sun Jan 21, 2018 6:11 pm, edited 1 time in total.

User avatar
CyclingDuo
Posts: 1778
Joined: Fri Jan 06, 2017 9:07 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by CyclingDuo » Sun Jan 21, 2018 5:59 pm

VINNY wrote:
Sun Jan 21, 2018 1:42 pm

Vinny- frustrated in Illinois.
Frustration felt.

Image

Walking away from two excellent careers that provide the kind of benefits you and your wife are both experiencing has everyone on the opposite side of your keyboard scratching heads, wondering "what in the world are they thinking about doing"?

Okay. So you have a little burn out. A little career fatigue. A little exhaustion from the same old, same old. Welcome to the mid to late 40's! 8-) 8-)

Vinny, we've all been there. It doesn't last forever, it ebbs and flows as you learn to manage and live alongside it.

Hey, for fun...assemble your family and do a fund raiser car wash some Saturday this Spring at a gas station or parking lot where you hand wash, and dry cars to raise funds for a cause. Heck, why not throw in a little detailing of the interior and tires while you are at it? Start at 8 am. If, by 12 noon on that day you haven't soaked up the reality - stick with it until 4 or 5 pm.

Go home. Assess the day in terms of the experience. Sleep on it.

When you wake up in the morning, look at yourself in the mirror. Smile.

It's true that we only get one journey in this life. Your journey, financially, has been an excellent one to date. Walking away from the money making machines that you and your wife have become with the savings and the pensions would be really hard to do. What if a nasty bear market comes along and that $1.6M is suddenly sub $1M? Even worse, what if you had pulled $600K or more out of that to purchase the Wash King, then the bear market hits. Your remaining investments suffer a loss, your new business is hit hard by the recession - and you are left with a big pile of ugly mess that you can't even sell? You would have your pensions, but perhaps many of your original dreams and goals may not be able to be met?

I'd say stick with the cash cow careers, continue to sock away like you are, and search for some hobbies, community involvement, your involvement with your kids, or whatever that can channel some positive energy balance to deal with the dread/fatigue/burn out you are feeling in the work side of the equation. Reassess in two or three years.

The good news is, it looks like you and your wife are going to be good (thanks to the pensions) whether you retire early or work a few more years. The car wash idea, though.... :shock:
"Everywhere is within walking distance if you have the time." ~ Steven Wright

epictetus
Posts: 508
Joined: Sat Mar 10, 2007 6:43 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by epictetus » Sun Jan 21, 2018 6:48 pm

i am thinking it would be less than 8 years if you are 48 now and all the benefits are available at 55?

i would definitely vote for staying put. 55 will be here soon and then you and your wife are set for the rest of your lives.

you and your wife have done an amazing job so far.

don't stop running the bases and quit the game between 3rd base and home plate :D

all the best to you no matter what you decide
Last edited by epictetus on Sun Jan 21, 2018 7:29 pm, edited 1 time in total.
Focus on what you can control

hazlitt
Posts: 41
Joined: Sun Jan 29, 2017 10:00 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by hazlitt » Sun Jan 21, 2018 6:49 pm

I say this with all due respect for an officer and a teacher (I come from generations of teachers), but how in the H E double hockey sticks does a police officer and a teacher have an annual income of $190,000? I live in a small town in the South, and I’ve never heard of that. More power to you though.

My wife and I started our own business twelve years ago when we were both 24. We still have it and are doing well. I think owning your own business is one of the most challenging and rewarding things you can do. If your plan was to start your own business, I would say jump in with both feet. But I don’t think going from a lifetime of govt work to buying a business is a good idea.

My brother is a public school teacher and he simply cannot understand my situation. He’s had a guaranteed employment contract for years (albeit technically year to year). Owning your own business has no safety net. There’s no such thing as a 40-hour week or overtime. There’s no support staff to turn to if you have a problem. It’s just you, sink or swim.

Bottom line, I think it’s something you have to grow into. Start small then build it up. Coming from the mindset of lifetime govt employees, I think paying a lot of money for an established business is a terrible idea.

I’m trying to be blunt in order to be helpful. Please do not interpret any of this as disrespect for police officers or teachers.

finite_difference
Posts: 1043
Joined: Thu Jul 09, 2015 7:00 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by finite_difference » Sun Jan 21, 2018 7:19 pm

HJG0989 wrote:
Sun Jan 21, 2018 5:21 pm
I was where you are mentally and emotionally 8 years before retiring. I am so glad I hung in there. My spouse and I now have Federal BCBS for life for a low monthly premium. I worked on improving my attitude and worked toward being fully engaged in my tasks. I also started using vacation time for long weekends to shorten my work weeks.

Good luck with your big decision and nice job in saving for retirement.
Yeah, are you actively trying to make your job as manageable as possible?

1) Taking as much vacation as possible.
2) Using your sick leave when needed.
3) Focus on the least stressful/most exciting/most preferable tasks within your job?
4) Able to delegate/ignore/quickly finish/not worry about the terrible parts?
5) Take regular breaks.

If you are feeling “burnt out” it sounds like it means you need to take vacation or try to work on a way such that you don’t cause yourself so much stress. Can you take a 1-3 month leave without pay to see if your outlook improves?

If you feel like your job is killing you (like significant and unavoidable stress), I wouldn’t want to do it for 8 more years. Those 8 years might shorten your lifespan significantly. But if it’s just a matter of boredom or something then I think a new perspective is needed.
The most precious gift we can offer anyone is our attention. - Thich Nhat Hanh

jboger
Posts: 1
Joined: Sat Jan 20, 2018 9:15 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by jboger » Sun Jan 21, 2018 8:04 pm

You are getting some really good advice on this board. I would suggest putting the goal of owning your own business in your long-term plan rather than your short-term plan. Try to motivate yourself in your current situation as an enabler for long-term success. To plan for the new business, request a mentor from SCORE.org. The mentors are volunteers so the service is free to you. A mentor can help you explore your options.

akpataego
Posts: 15
Joined: Sun Nov 26, 2017 8:43 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by akpataego » Sun Jan 21, 2018 8:05 pm

Gosh, it's always easier said than done and I haven't walked a day in your shoes...But the car wash idea just seems like too big of a risk. You have worked so hard for so long and you and your wife have amazing pensions and will have amazing retirements.

If those were my only two options I would not pick the car wash idea.

staythecourse
Posts: 6118
Joined: Mon Jan 03, 2011 9:40 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by staythecourse » Sun Jan 21, 2018 8:20 pm

KlangFool wrote:
Sun Jan 21, 2018 1:56 pm
Sandtrap wrote:
Sun Jan 21, 2018 1:51 pm
"...stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA....
. . . . run from the car wash idea . . . . as fast as you would run from a "great deal" on an 1978 Ford Granada with a new paint job and a funny smell. . .

wife is right

j :D
+1,000....

KlangFool
Agreed. Trust me if your friend thought is was such a great idea he would have just started one where you are suggesting doing it or AT LEAST go in partnership with you. The fact he has not done this is enough evidence it is not a great idea.

Just remember the tortoise and hare.

Beside not sure where in Illinois you live, but there have already been changes to retirees pensions for health insurance and more sure to come with the fiscal issues of the state so I would assume even a higher cost for retirement is in the future then you pension currently makes it seem. Believe Emmanuel already changed Chicago police officers retirement health insurance. Don't think it was huge, but the cracks are starting.

Good luck.
"The stock market [fluctuation], therefore, is noise. A giant distraction from the business of investing.” | -Jack Bogle

Murgatroyd
Posts: 131
Joined: Sun Jan 21, 2018 8:23 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Murgatroyd » Sun Jan 21, 2018 8:42 pm

In addition to the advice given, you might ask your friend how his business performed in 2008 and 2009. A car wash is a totally discretionary luxury and can easily be cut when budgets are tight. Good luck! And thank you for protecting us!

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 9:18 pm

hazlitt wrote:
Sun Jan 21, 2018 6:49 pm
I say this with all due respect for an officer and a teacher (I come from generations of teachers), but how in the H E double hockey sticks does a police officer and a teacher have an annual income of $190,000? I live in a small town in the South, and I’ve never heard of that. More power to you though.

My wife and I started our own business twelve years ago when we were both 24. We still have it and are doing well. I think owning your own business is one of the most challenging and rewarding things you can do. If your plan was to start your own business, I would say jump in with both feet. But I don’t think going from a lifetime of govt work to buying a business is a good idea.

My brother is a public school teacher and he simply cannot understand my situation. He’s had a guaranteed employment contract for years (albeit technically year to year). Owning your own business has no safety net. There’s no such thing as a 40-hour week or overtime. There’s no support staff to turn to if you have a problem. It’s just you, sink or swim.

Bottom line, I think it’s something you have to grow into. Start small then build it up. Coming from the mindset of lifetime govt employees, I think paying a lot of money for an established business is a terrible idea.

I’m trying to be blunt in order to be helpful. Please do not interpret any of this as disrespect for police officers or teachers.
No offense taken. None what so ever. We've been fortunate enough to receive steady raises on average of 3% every single year along with some longevity increases within our contracts. Our salary is actually slightly higher but I kept the numbers conservative, just our base pay without my overtime, which last year amounted to $11,787.00
CyclingDuo wrote:
Sun Jan 21, 2018 5:59 pm
VINNY wrote:
Sun Jan 21, 2018 1:42 pm

Vinny- frustrated in Illinois.
Frustration felt.

Image

Walking away from two excellent careers that provide the kind of benefits you and your wife are both experiencing has everyone on the opposite side of your keyboard scratching heads, wondering "what in the world are they thinking about doing"?

Okay. So you have a little burn out. A little career fatigue. A little exhaustion from the same old, same old. Welcome to the mid to late 40's! 8-) 8-)

Vinny, we've all been there. It doesn't last forever, it ebbs and flows as you learn to manage and live alongside it.

Hey, for fun...assemble your family and do a fund raiser car wash some Saturday this Spring at a gas station or parking lot where you hand wash, and dry cars to raise funds for a cause. Heck, why not throw in a little detailing of the interior and tires while you are at it? Start at 8 am. If, by 12 noon on that day you haven't soaked up the reality - stick with it until 4 or 5 pm.

Go home. Assess the day in terms of the experience. Sleep on it.

When you wake up in the morning, look at yourself in the mirror. Smile.

It's true that we only get one journey in this life. Your journey, financially, has been an excellent one to date. Walking away from the money making machines that you and your wife have become with the savings and the pensions would be really hard to do. What if a nasty bear market comes along and that $1.6M is suddenly sub $1M? Even worse, what if you had pulled $600K or more out of that to purchase the Wash King, then the bear market hits. Your remaining investments suffer a loss, your new business is hit hard by the recession - and you are left with a big pile of ugly mess that you can't even sell? You would have your pensions, but perhaps many of your original dreams and goals may not be able to be met?

I'd say stick with the cash cow careers, continue to sock away like you are, and search for some hobbies, community involvement, your involvement with your kids, or whatever that can channel some positive energy balance to deal with the dread/fatigue/burn out you are feeling in the work side of the equation. Reassess in two or three years.

The good news is, it looks like you and your wife are going to be good (thanks to the pensions) whether you retire early or work a few more years. The car wash idea, though.... :shock:
I never even thought of a bear market and recession scenario. No doubt I'd feel worse than I do now! Point well taken.
epictetus wrote:
Sun Jan 21, 2018 6:48 pm
i am thinking it would be less than 8 years if you are 48 now and all the benefits are available at 55?

i would definitely vote for staying put. 55 will be here soon and then you and your wife are set for the rest of your lives.

you and your wife have done an amazing job so far.

don't stop running the bases and quit the game between 3rd base and home plate :D

all the best to you no matter what you decide
Great analogy, I like this. Although 8 years seems daunting to me I guess I kind of am rounding third base in the final stretch.
Global100 wrote:
Sun Jan 21, 2018 5:43 pm
VINNY wrote:
Sun Jan 21, 2018 1:42 pm
As a result I am considering buying a full service car wash. No automatic or self- service bays. An inside operation with detailing and hand washing.

A friend of the family has operated one for 30 years and has made a lot money. He averages $5,000.00 per week net. I realize that is no guarantee that I will make that much or be as successful.

If I opened a car wash, he would help me get if off and running. By doing this I am hoping to generate a lot more income than I am now and hopefully allow my wife to retire. I feel that having him as a possible partner or mentor could be a good opportunity since he knows the ins and outs and what mistakes to avoid.
One consideration is the reliance on one other person to mentor your operation. If this one person experiences a traumatic medical emergency or fatal accident and is not around after the car wash is initially bought, then this could seriously affect the business during its critical infancy under your management.
Very good point as I would be relying heavily on this person for help!
TwstdSista wrote:
Sun Jan 21, 2018 5:26 pm
The husband and I are the same ages as you and your spouse, but we do not have kids. Just for reference, our health care this year jumped from $757/month to $1266/month. That is a silver plan, but the deductible is still $3000 each, with a max OOP of $6450 each. Ouch.

The price jump might be similar next year. The ACA subsidies might disappear at some point. Of course, maybe they will actually "fix" health care at some point.

Friends of our paid $25000 for health care the year before turning 65, and that was a small business plan and also a couple of years ago....

There are just too many unknowns about health care costs now and in the future. Please keep that in mind when making your decision.
WOW! I am so grateful for all of these responses. Realities of numbers like these is what we have been shielded from as our healthcare has been paid for by my city. I'm just speechless and my jaw dropped seeing that figure.

I think I need to take my rose colored glasses off and realize that I can't buy somebody else's good fortune. The people that I know that own these various business, (car wash and fast food) lead very lavish lifestyles and even if they are in debt to their eyeballs, they still have to produce the high income needed to support their lifestyles.

Mcmansions, in-ground pools, vacation homes, etc, etc. I witnessed these and I am not exaggerating.

And to be clear I want NONE of these materialistic possessions. Just the income that as Boglehead I would continue to squirrel away.

It's amazing how these same business owners and friends of mine, seem to be making a killing doing what they are doing but are discourage me once they hear of my healthcare and pension at age 55. That's where the disconnect comes in and I question myself, do I do what they're doing or stick to a job I'm no longer enjoying for 8 more years.

I'm not trying to compare myself to these friends of mine but seeing if somehow I could improve my financial situation even more.

However, after the many responses and reality checks you guys have given me, it's making me realize something that I had backwards all along and it's this. At the beginning of my career I steered clear of taking a chance of starting a business because I thought I had too much to risk, paid healthcare, a steady check, a pension and the fringe benefits, paid sick time, personal days,vacation, etc, etc. Twenty two years later I have even more at stake!

We need to start reassessing this whole idea and take stock in what we have, what we could stand to lose and not on what we don't have.

I can't wait to share these comments with my wife. My gut told me what you guys are saying but I always felt like I let fear always hold me back from taking the risk of buying a business and watching all these other people make what I make in a few months has not been easy all these years I've known them.

But I am truly grateful for this forum, the posters and all the great advice! Thank you fellow Bogleheads!

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 9:29 pm

Murgatroyd wrote:
Sun Jan 21, 2018 8:42 pm
In addition to the advice given, you might ask your friend how his business performed in 2008 and 2009. A car wash is a totally discretionary luxury and can easily be cut when budgets are tight. Good luck! And thank you for protecting us!
Thank you and I will. I know that last year he made $750,000.00 but 2008-2009 would be interesting.

And I realize that I may not be able to duplicate those sales even his help and more importantly, what toll might running a car wash like his take on my family life, it's a seven days per week operation with ten hour days, which doesn't include opening and closing the wash.

You guys have given me a lot to think about.

Grt2bOutdoors
Posts: 19301
Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Grt2bOutdoors » Sun Jan 21, 2018 9:37 pm

VINNY wrote:
Sun Jan 21, 2018 9:18 pm


WOW! I am so grateful for all of these responses. Realities of numbers like these is what we have been shielded from as our healthcare has been paid for by my city. I'm just speechless and my jaw dropped seeing that figure.

I think I need to take my rose colored glasses off and realize that I can't buy somebody else's good fortune. The people that I know that own these various business, (car wash and fast food) lead very lavish lifestyles and even if they are in debt to their eyeballs, they still have to produce the high income needed to support their lifestyles.

Mcmansions, in-ground pools, vacation homes, etc, etc. I witnessed these and I am not exaggerating.

And to be clear I want NONE of these materialistic possessions. Just the income that as Boglehead I would continue to squirrel away.

It's amazing how these same business owners and friends of mine, seem to be making a killing doing what they are doing but are discourage me once they hear of my healthcare and pension at age 55. That's where the disconnect comes in and I question myself, do I do what they're doing or stick to a job I'm no longer enjoying for 8 more years.

I'm not trying to compare myself to these friends of mine but seeing if somehow I could improve my financial situation even more.

However, after the many responses and reality checks you guys have given me, it's making me realize something that I had backwards all along and it's this. At the beginning of my career I steered clear of taking a chance of starting a business because I thought I had too much to risk, paid healthcare, a steady check, a pension and the fringe benefits, paid sick time, personal days,vacation, etc, etc. Twenty two years later I have even more at stake!

We need to start reassessing this whole idea and take stock in what we have, what we could stand to lose and not on what we don't have.

I can't wait to share these comments with my wife. My gut told me what you guys are saying but I always felt like I let fear always hold me back from taking the risk of buying a business and watching all these other people make what I make in a few months has not been easy all these years I've known them.

But I am truly grateful for this forum, the posters and all the great advice! Thank you fellow Bogleheads!
Someone on this forum has this quote as their signature: "Comparison is the thief of joy".
The grass is not greener on the other side.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

physiorol
Posts: 164
Joined: Sun Mar 09, 2014 1:52 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by physiorol » Sun Jan 21, 2018 9:41 pm

When you work for yourself, your boss is a real a**hole.

Don't do it.

User avatar
calmaniac
Posts: 76
Joined: Fri Jan 30, 2015 3:32 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by calmaniac » Sun Jan 21, 2018 10:00 pm

This is one of the most amazing B'head strings I've seen. To be honest, there have been so many thoughtful postings, including from VINNY the OP, that I don't have much to add. Except...considering the financial benefits of staying in the force, maybe its worth spending a bit of money on making your current life less stressful. Whether that is money for a therapist (you mentioned the stress), personal coach, gym membership, meditation, 3 day weekends, etc., but things that will help improve your well being and sense of wellness.

I am a couple of years into a military pension and I am so grateful I have it and the incredible sense of freedom. After retirement I took off 6 months and then went back to work, but now I have no excuses, because work is 100% a choice.

Hold on to age 50 at a minimum and reassess!
Last edited by calmaniac on Mon Jan 22, 2018 5:26 am, edited 1 time in total.

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Sun Jan 21, 2018 11:17 pm

calmaniac wrote:
Sun Jan 21, 2018 10:00 pm
This is one of the most amazing B'head strings I've seen. To be honest, there have been so many thoughtful postings, including from VINNY the OP, that I don't have much to add. Except...considering the financial benefits of staying in the force, maybe its worth spending a bit of money on making your current life less stressful. Whether that is money for a therapist (you mentioned the stress), personal coach, gym membership, meditation, 3 day weekends, etc., but things that will help improve your well being and sense of wellness.

I am a couple of years into a military pension and I am so grateful I have it and the incredible sense to freedom. After retirement I took off 6 months and then went back to work, but now I have no excuses, because work is 100% a choice.

Hold on to age 50 at a minimum and reassess!
My wife agrees with all of the responses. We sat here and read everyone of them. She said we are going to take advantage of spring break this year since her break coincides with the kids and go on vacation. Tomorrow I will be putting in for it. Like some have suggested, to take more time off and have vacations or events to look forward to. I can break up my vacation time which allow for three day weekends and more extended periods of time off.

We both belong to a gym and ironically our level of fitness has made us want early retirement even more since we feel alive and well when we're not at work.

I can't wait to be in your shoes, to have that freedom!

I know that a business that I was contemplating or any other will add more stress in my life and end up giving me a lot less freedom. Even if I had a manager running it in time, as one of my friends suggested, there are still headaches. My friend has a manager that plays a significant role in running his car wash, and knows he's stealing small sums of money.

He has overlooked it because he believes it's a small price to pay in exchange for not being there all of the time. In addition, a manager or employee will not care as much as you would and unhappy customers will spread the word damaging your reputation and sales.

I was leaning towards throwing caution to the wind and thinking that "somehow it'll just all work itself out, like it has for those that I know in business".

The responses are consistent. Don't take the unnecessary risk and jeopardize what we have accomplished thus far. Take more time off and refocus on what can be fixed. My solution was fraught with a lot of risk and a dependence on somebody else. I knew what my gut was saying but my brain was trying to convince me otherwise, but you guys threw the ice water on me and woke me up to the potential/likely realities. Thanks again.

User avatar
Watty
Posts: 14354
Joined: Wed Oct 10, 2007 3:55 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by Watty » Mon Jan 22, 2018 12:08 am

I don't know what your current schedule is but if you buy the car wash I would think that you would need to work virtually every weekend so you could be spending a lot less time with your kids.

I might have missed it but what is your situation with Social Security and Medicare? I know that some jobs are not under that.

If you will eventually be eligible for Medicare that could make your retirement healthcare less valuable.

User avatar
randomizer
Posts: 1531
Joined: Sun Jul 06, 2014 3:46 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by randomizer » Mon Jan 22, 2018 12:12 am

I'd pull the plug at 50, but I wouldn't buy a business. I'd try to find a job that kept me occupied and sent a little cash my way, something that made me happy. Could be working in a store or gardening or whatever. Heck, I'd rather wash cars than own a car wash.
87.5:12.5, EM tilt — HODL the course!

OldSport
Posts: 309
Joined: Tue Jul 25, 2017 7:01 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by OldSport » Mon Jan 22, 2018 12:15 am

VINNY wrote:
Sun Jan 21, 2018 1:42 pm
I am 48 years old and my wife is 44. We are from Illinois and I am a Police Officer and my wife is a Teacher.

We have three kids, 11, 13 and 15 years old.

Our Gross Annual Income from our jobs is: $190,000.00 of which we defer the maximum to my 457 and to her 457 and 403(b), ($55,500.00) bringing our Gross annual income to $134,500.00

Dividends: In 2017 we generated $32,000.00 in dividends and capital gains from our portfolio. All of which gets reinvested. About $10,000.00 of those dividends and gains came from the taxable side of our portfolio.

Our Net Annual Income: I am estimating based on our effective tax of 6% (after deductions and child tax credits) to be approximately $10,535.00 per month, or $126,420 per year.

Monthly Spending: Approximately $5,000.00 per month. This includes everything, utilities, gas, groceries, insurance, eating out, etc, etc. If we tried, we could get this figure lower but we have a weakness for deep dish pizza!

Debts: $0. We have zero debt. Our home is paid off and carry no other debt whatsoever.

Fixed Assets: A home worth approximately $275,000.00 with no mortgage. Two paid in full cars worth about $20,000.00

Savings & Investments: $1,602,487.00 in total broken down as follows.

Tax Sheltered:
My ROTH IRA : $144,010.00
Her ROTH IRA: $138,648.00

Her 403(b): $412,224.00
Her 457: $41,161.00
My 457: $252,365.00

Child #1 Education Ira: $11,743.00

Child #1 ROTH IRA: $7,440.00
Child #2 ROTH IRA: $7,433
Child #3 ROTH IRA: $3,100.00

Taxable:
Joint GNMA Bond: $43,406.00
Joint Total Stock Market Index: $539,944.0
Joint Prime Money Market: $1,010.00

The overwhelming majority of this money is invested in index funds at Vanguard. Mainly in VTSAX.

Pensions:
I can retire and collect my pension when I turn 50 if I choose to do so. However, if I retired at 55, I’d get fully paid for medical for my family and I.

My Pension at 50:
$5,300.00 month, $63,600 annually, from 50 years of age to 55 years of age with no cost of living adjustments until I turn 55. At which point my pension would increase to $73,140.00 annually with 3% COLA’s increases every year thereafter.

Medical would cost my family around $1,500.00 per month through my employer at a discounted rate of 50%. I can avoid this by jumping on my wife insurance and we'd pay $350.00 per month, if I retired at 50.

My Pension at 55:
$7,200.00 month, $86,400.00 annually with 3% annual COLA increases and fully paid medical for my family and I.

My wife will also receive a pension when she turns 55. Hers will be approximately $50,000.00 with 3% annual COLA increases. With no medical. We’d have to pay for our medical on the open market at this point IF I retired at 50 and she at 55.

Here is my question.

We both want to retire from our jobs. We no longer enjoy doing what we’re doing and I am looking for an alternative. To be honest we dread going to work and want our freedom. I can’t imagine myself putting in another 8 years to get the free healthcare. The thought of this is so depressing.

My wife loves teaching but the policies, mandates and other things they are now required to follow has made her job no where near as enjoyable as it once was for her.

As a result I am considering buying a full service car wash. No automatic or self- service bays. An inside operation with detailing and hand washing.

A friend of the family has operated one for 30 years and has made a lot money. He averages $5,000.00 per week net. I realize that is no guarantee that I will make that much or be as successful.

If I opened a car wash, he would help me get if off and running. By doing this I am hoping to generate a lot more income than I am now and hopefully allow my wife to retire. I feel that having him as a possible partner or mentor could be a good opportunity since he knows the ins and outs and what mistakes to avoid.

But I’m concerned because on one hand we have jobs we don't enjoy but with good benefits, we live comfortably and on the other hand I’m taking on a lot more risks and issues (headaches) that a business comes with.

We could even help pay for our kids college without the potential income a business could generate with our annual income from either our jobs, pensions or investments.

I’m also considering this business as hopefully a way to super size our nest egg, so that our kids will be financially well off with an inheritance down the road, in addition to the good money skills and lessons we are instilling in them.

My wife could then hopefully retire sooner and we could stop working at places we dread.

Although who’s not to say I might not dread working 7 days per week and dealing with employees that don’t show up to work. I realize this.

I have mixed emotions.

Do I stay at my current job till I’m 55 and then retire with full medical and that would also allow my wife to retire at 50 and call it a day......but that’s another 8 years. Which I could contribute to my 457 and Roth IRA.

Or do I roll the dice and try a business like this car wash in hopes of far exceeding my current income. It would cost me between $600,000.00 and $800,000.00. to buy a business like this.

But it obviously would be more risky, require me to work more hours than I do now and it would be a new learning experience. One that I’ll hopefully enjoy.

Another option I thought of was retire at 50, go work at my friends car wash if after a few months it still interests me explore buying my own place. However, this then makes me ineligible for the free medical at 55 because I’d be retiring at 50 from my employer.

If I did this, my wife would have to enroll through her employers medical coverage and that would cost us $350.00 per month for family coverage.

After having saved all this money with no debt I still feel as though early retirement isn’t within reach because of healthcare costs.

My employer provides free healthcare while I’m working. I’m fortunate enough that I have never had to contribute a penny in 22 years.

But we’ve reached a point in our lives where we want our freedom! More than anything.

But my wife feels uncomfortable/nervous if we retired from our jobs until our kids were done with college because our income could easily allow us to help pay their way.

I would love to hear your thoughts and thank you!

Sincerely,
Vinny- frustrated in Illinois.
Whatever you do, RUN FROM THE CAR WASH IDEA. You have a ton of money saved up, plus some very nice pensions. You will be "free" in no time. You risk losing everything with the car wash.

My FIL did something like this many years ago and LOST EVERYTHING. They declared bankruptcy. It was a tragic time for the children. Please do not do this. You will both receive fantastic pensions. That on top of all your savings, you will be quite wealthy and free if you stick it out a few more years.

With a car wash, you risk losing everything, plus that is no relaxing retirement. You are dependent on the business.

stlutz
Posts: 4784
Joined: Fri Jan 02, 2009 1:08 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by stlutz » Mon Jan 22, 2018 12:24 am

I'd pull the plug at 50, but I wouldn't buy a business. I'd try to find a job that kept me occupied and sent a little cash my way, something that made me happy. Could be working in a store or gardening or whatever. Heck, I'd rather wash cars than own a car wash.
+1

You are in a financial position where you can do anything, but not really at the point where you can do nothing. There are plenty of other options besides current job for 8 more years or car wash.

riverguy
Posts: 439
Joined: Sun May 23, 2010 10:33 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by riverguy » Mon Jan 22, 2018 3:50 am

I wouldn’t be depending on two Illinois pensions for my retirement especially only being less than 50 years old now. Almost ten years into a bull market with an already underfunded pension and people fleeing the state of IL as fast as they can. It’s just not sustainable. Lots of public employees are going to have a rude awaking at some point in the future. The pension might be “guaranteed” but where’s the money going to come from when the market crashes and everyone has left the state of IL? Good luck!

HIinvestor
Posts: 1690
Joined: Tue Apr 08, 2014 3:23 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by HIinvestor » Mon Jan 22, 2018 4:25 am

Headline in our paper this morning was an estimate that a family of 4 will be owing over $40,000/year in health insurance premiums if some significant changes aren’t made to reduce healthcare costs in the near future—yikes!

Sounds like opinions here are unanimous to nix the car wash and make changes to help make your current jobs more enjoyable and stick it out until your pension at least vests at 50 — 55 if you can last.

My husband worked for Fed govt for 45 years and we have lifetime subsidized medical insurance. It’s really great peace of mind for us and helps H gave no copays with his Medicare while covering me and our dependent kids. Invaluable! We could not buy anything similar on the open market as individuals, especially for such reasonable premiums.

Very pleased that you’re putting in for Spring break vacation—great idea! Good idea for you and your wife to be talking about how to make your careers better fit your current interests as well, plus taking long weekends and mini-vacations.

dekecarver
Posts: 297
Joined: Mon Feb 22, 2010 10:24 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by dekecarver » Mon Jan 22, 2018 6:06 am

My thoughts:
I'd strategically use my leave to essentially pare back and work a modified work schedule if that is available and ride it out till 55 to pick up the big perk, health insurance, and then let ride.

One question: Why do you not like your current role and ca you do a departmental move to change that?

User avatar
djpeteski
Posts: 660
Joined: Fri Mar 31, 2017 9:07 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by djpeteski » Mon Jan 22, 2018 7:13 am

I have a different business idea for you: financial planning. Holy cow you two have done a good job in your finances with "normal" occupations.

I would echo the thoughts of others, is that you are assuming a lot of down side risk for almost no upside. It sounds like you are burnt out and need a family vacation and if possible a long one. Can you guys take off a month to travel Europe or some other destination you really care about? I would do that, I would do that every year until you turn 55. I bet that make that "race" a lot easier to run.

And I am serious about the financial planning. You could probably serve others very well in coaching them to get their finances in order. Your wife could teach them how to be good with money. You can start this business now, part time, with not much capital (so you have insignificant downside risk). While these services may not be needed for the majority of members of this board, they are certainly well needed by the larger US population. Your total time spent (probably) in building a financial planning business and working as a police officer would be less than that spent building a car wash business. If you find the financial planning meaningful, it could certainly help energize you to making it to 55 as a police officer.

The best part, 7 years is probably just the right amount of time to build a financial planning practice. I would make this a full partnership with yoru wife as she has certainly contributed to the success of your family.

vested1
Posts: 1595
Joined: Wed Jan 04, 2012 4:20 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by vested1 » Mon Jan 22, 2018 7:50 am

As others have said, those of us who have worked long enough have gone through the same thing as you have. It's almost universal to want a change at this stage in your life, but resist the urge to destroy the future you've built for yourself.

I had these same impulses but stuck it out for 31 years in my longest stretch of employment at megacorp. After retiring from that job at 56 I worked an additional 8 years in the "real world" finding out that my greener pastures were littered with cow patties. Now retired, I keep in touch with old friends who still work at megacorp. Their complaints echo those that I had while working there, but I can't help thinking that they don't appreciate how good they have it.

The problem with working in a closed loop of those who complain is that the negativity rubs off on you. I would suggest getting new acquaintances at work, maybe newer hires who aren't so jaded.

Your greatest asset can't be tallied on a spreadsheet. It is a spouse who keeps you grounded in reality, and in the wisdom of staying the course.

User avatar
hand
Posts: 1207
Joined: Sun May 17, 2009 8:42 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by hand » Mon Jan 22, 2018 9:01 am

VINNY wrote:
Sun Jan 21, 2018 1:42 pm
Another option I thought of was retire at 50, go work at my friends car wash if after a few months it still interests me explore buying my own place. However, this then makes me ineligible for the free medical at 55 because I’d be retiring at 50 from my employer.
I'm in strong agreement with those who think that from a math perspective, trading in pensions for a risky business with low barriers to entry is not a good idea.

The challenge of course is that you *do* think it is a good idea and will likely worry about what could have been had you taken the alternate path. If you're really interested, why not keep your job and work (or volunteer) part time for your friend... That way, you 1) get a feeling for working the number of hours well in excess of 40 required to start a business, 2) get a feel for the car wash business, 3) Not lose the jobs / benefits you've worked your career for.

Possibly a month or two in the business would make it obvious that the grass isn't always greener.

P.S. Sounds like you're running away from jobs rather than running towards something better. This doesn't seem like a recipe for success.

BlackStrat
Posts: 264
Joined: Wed Apr 29, 2015 9:20 am

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by BlackStrat » Mon Jan 22, 2018 9:16 am

Look what buying a carwash did for Walter White! :oops:

In all seriousness, you're in an enviable position many people would die for...IF the Illinois pension system survives.

Healthcare costs are totally out of control; the next 7-8 years will fly by - try to learn to at least cope with your job.

Another option is to make an offer to be a part-owner of your friends already established business. It may be appealing to him to have a trusted co-owner manage the place and give him a break.

Good luck!

User avatar
3CT_Paddler
Posts: 3226
Joined: Wed Feb 04, 2009 5:28 pm
Location: Marietta, GA

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by 3CT_Paddler » Mon Jan 22, 2018 9:31 am

No need to pile on, but all of the advice you have received on here is spot on.

If you add the income and benefits you are currently receiving your combined income is above $230-250k for working two public sector jobs. Very few small business owners make that kind of money. Much of the wealth you see around you is from people who save little to nothing... you are in a fantastic position.

VINNY
Posts: 374
Joined: Wed Mar 28, 2007 9:07 pm

Re: Should I buy a business or suck it up at a job(s) with a pension.

Post by VINNY » Mon Jan 22, 2018 10:46 am

Watty wrote:
Mon Jan 22, 2018 12:08 am
I don't know what your current schedule is but if you buy the car wash I would think that you would need to work virtually every weekend so you could be spending a lot less time with your kids.

I might have missed it but what is your situation with Social Security and Medicare? I know that some jobs are not under that.

If you will eventually be eligible for Medicare that could make your retirement healthcare less valuable.
I do not contribute to Social Security but I do to Medicare. My paid for healthcare would kick in at age 55, well before Medicare which would make it valuable. I will receive some social security benefits from working side jobs but this amount will be off set by my pension. I'm guessing it will amount to only a few hundred dollars per month.

And I would most likely be missing on my kids sporting events and family functions. Things that I can now attend because I've finally made it to the day shift, and no longer work mids or afternoons unless it's a manpower issue.
riverguy wrote:
Mon Jan 22, 2018 3:50 am
I wouldn’t be depending on two Illinois pensions for my retirement especially only being less than 50 years old now. Almost ten years into a bull market with an already underfunded pension and people fleeing the state of IL as fast as they can. It’s just not sustainable. Lots of public employees are going to have a rude awaking at some point in the future. The pension might be “guaranteed” but where’s the money going to come from when the market crashes and everyone has left the state of IL? Good luck!
I agree wholeheartedly. They have already tried to reform our pension by raising the retirement age for new hires to 55 but it's not nearly enough to address the unfunded liabilities. The high salaries at retirement combined with the expensive automatic 3% COLA's every January, have made these pensions unsustainable in the long term.

I preach to my colleagues to contribute to our 457. My efforts landed us an excellent plan with Fidelity and I reach out to every single new hire and I inform them of two things. The benefit of the 457 and dire straits our pensions are in. It's challenging because at their age, retirement seems so far away and they don't give it much thought. But I feel better knowing that those who sign up will be better off than had they not done so.

The day of reckoning will come and at least I have a back up plan when it does.


dekecarver wrote:
Mon Jan 22, 2018 6:06 am
My thoughts:
I'd strategically use my leave to essentially pare back and work a modified work schedule if that is available and ride it out till 55 to pick up the big perk, health insurance, and then let ride.

One question: Why do you not like your current role and ca you do a departmental move to change that?
I'm in a suburban department and mine along with so many others are starving for revenue and have looked to us as an ATM.

Quotas were abolished by the governor several years ago, and departments can no longer base our evaluations on the number of tickets we write. However, they can evaluate you on the number of traffic stops that you make.

The pressure to still issue citations is strong and if you don't, the bosses find ways to make your life miserable. And what sucks is that I've literally sat behind a car and had to decide, write the ticket or catch grief. In my experience, most people I stop are decent and the majority could benefit from a warning.

But when we began to issue more warnings than citations, we were told that we weren't enforcing the law!
Which is complete BS. The truth of the matter is the elected officials want and need the revenue and the Chief who is appointed by the Mayor, will see to it that the revenue (fines) keep coming in.
djpeteski wrote:
Mon Jan 22, 2018 7:13 am
I have a different business idea for you: financial planning. Holy cow you two have done a good job in your finances with "normal" occupations.

I would echo the thoughts of others, is that you are assuming a lot of down side risk for almost no upside. It sounds like you are burnt out and need a family vacation and if possible a long one. Can you guys take off a month to travel Europe or some other destination you really care about? I would do that, I would do that every year until you turn 55. I bet that make that "race" a lot easier to run.

And I am serious about the financial planning. You could probably serve others very well in coaching them to get their finances in order. Your wife could teach them how to be good with money. You can start this business now, part time, with not much capital (so you have insignificant downside risk). While these services may not be needed for the majority of members of this board, they are certainly well needed by the larger US population. Your total time spent (probably) in building a financial planning business and working as a police officer would be less than that spent building a car wash business. If you find the financial planning meaningful, it could certainly help energize you to making it to 55 as a police officer.

The best part, 7 years is probably just the right amount of time to build a financial planning practice. I would make this a full partnership with yoru wife as she has certainly contributed to the success of your family.
I do take a lot of time off in the summer because that's when my kids and wife are off of school. Sometimes, I've taken an entire month off and it was great! We need to look into perhaps taking that month and spending it entirely away from home. That would be something awesome to look forward to.

My wife has echoed your same advice regarding helping others with financial advice. I have helped a lot of the friends I train with at the gym, start IRA's, enroll in their 457's and have even helped numerous teachers that my wife works with rolling their 403(b)'s over to Vanguard. And educating them on low cost index funds.

They have been very appreciative and you are correct, many need the service because they find the task so daunting and confusing.

I would rather help teachers and colleagues with their 403b's, 457's and IRA's than write a ticket. And I have helped many of her colleagues with the paperwork needed to enroll and roll over their money. They find the task confusing, whereas I actually enjoy doing it because I know the end result will be good for their money

I definitely find this kind of work more rewarding knowing that a friend/colleague/investor is on the right path and is no longer going to be taken advantage of after taking my advice. It truly does feel good because although they may not comprehend the impact of fees and loads on their money, I do.

This is most definitely an area that I need to explore more of.
vested1 wrote:
Mon Jan 22, 2018 7:50 am
As others have said, those of us who have worked long enough have gone through the same thing as you have. It's almost universal to want a change at this stage in your life, but resist the urge to destroy the future you've built for yourself.

I had these same impulses but stuck it out for 31 years in my longest stretch of employment at megacorp. After retiring from that job at 56 I worked an additional 8 years in the "real world" finding out that my greener pastures were littered with cow patties. Now retired, I keep in touch with old friends who still work at megacorp. Their complaints echo those that I had while working there, but I can't help thinking that they don't appreciate how good they have it.

The problem with working in a closed loop of those who complain is that the negativity rubs off on you. I would suggest getting new acquaintances at work, maybe newer hires who aren't so jaded.

Your greatest asset can't be tallied on a spreadsheet. It is a spouse who keeps you grounded in reality, and in the wisdom of staying the course.
I'm definitely surrounded by a lot of negativity and I agree it is very easy to get caught up in it. I have from time to time and it makes matters a lot worse!

Several years ago I was off rehabbing from an injury and I nearly lost my job because of it. I made a full recovery and I recall how grateful I was after coming back to work. I nearly lost my pension, my good income, paid for medical and the financial and psychological aspects a job provides.

When I tried explaining to some my journey and the toll it took on me, psychologically and emotionally, it pretty much fell on deaf ears. And I remember thinking to myself, these folks have no idea how good they have it but couldn't appreciate it because some were outright miserable.

Pretty much how I find myself these days. I am not criticizing them, as I can relate to how they feel, but it's certainly not healthy to come to work that unhappy. As I can attest.

I thought I had a great idea, a plan, an escape but as many have pointed out it's fraught with risks of jeopardizing our financial future and the ability to spend more time with my family.

Thanks for all the responses! I needed a healthy dose of reality.

Post Reply