Now or One More Year?

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Topic Author
jdv01
Posts: 38
Joined: Mon Mar 06, 2017 4:10 pm

Now or One More Year?

Post by jdv01 » Thu May 16, 2019 11:09 am

I apologize for the long post.

13 Months until FRA

800K in split between an IRA at Vanguard and a 401k.
100% in Total Stock Market for the IRA and the 401K is in the S&P500.

If I work until FRA and given the below amounts for my estimated monthly income I don't anticipate needing to withdraw from my IRA or 401K until I must take RMDs. I'm OK with being 100% equities. I've been through Dot Com and 2008 and left things alone.

I have about 15K in an HSA - I was late to party on that front.

Pension fixed amount with no increases this includes 100% to surviving spouse. It is Megacorp who is fiscally conservative that isn't guarantee I know but as close as it gets short of having a US Government Pension. I took a small pension in cash a couple of years ago from previous employer and rolled it in to my IRA. It also didn't have any increases in it and I figured it made more sense to grab it and put it in to my IRA since I didn’t anticipate needing it to live on.

These are the monthly amounts I anticipate at FRA
Pension
3,493

My Social Security at FRA from MySocialSecurity site.
2,734

Spouse has been a SAHM and does not qualify for Social Security but at FRA she is a couple of months older than I am. Would get 50% of the above amount.
1,367

We still have a house payment for the next 10 years $900 a month and a car payment $450 a month for the next 4 years.

We currently live on about $5500 a month after taxes, 401K insurance etc. I’m using this as my expected expenses in retirement.

We don't have any grand plans to travel after retiring. The family all lives close by so no need to travel on that front.
I'm still trying to find something to retire too as opposed to retire from since I pretty much like my job at the Megacorp, the commute is getting to be an issue, but I can carpool most days. My work is in IT and quite a bit of it can is done remotely which is what I do after hours and on weekends as needed. I have flexibility in coming and going at the office when not carpooling since I routinely put in more than 40 hours a week. I've done the commute for 40+ years now and it is getting old and it takes longer than it used to, it is 40 miles one way.

The Megacorp has been putting some money aside for myself and DW in a fund that will help pay for Medicare when it is time to do that. This is in place of retiree Health Insurance which they did away with a few years ago.

Given all the above I think I should be fine when the calendar hits the FRA date in 13 months but would like any input from the community where I may be missing something or maybe should work a past FRA.

I know about delaying Social Security not sure if that make sense given my family’s history of longevity, but I might delay it until the recommended time from Opensocialsecurity calculator which was 68years and 2 months.

I’ve run every calculator I can find, the one at work, Fidelity, Firecalc and they look good. Firecalc returns 100% on the above numbers. Wife is currently using YNAB so is on top of our finances and working on paying down the mortgage early. We have about 20K in an emergency fund almost forgot about that.

To complicate matters I might be able to retire now - Mega Corp is offering 1 year of Pension credit if I retire in the next couple of months.

Not sure I'm willing to forgo adding to my 401K for the next year and starting the draw down process early. We would both be eligible for Medicare so health care would be a wash. Pension would be about $1000 year less than if I worked OMY and received a standard pay increase (not guaranteed next year) according to the Corporate calculator they provided to compare the Incentive Plan VS Retire Now VS OMY.

Do I trade a year of my life for an extra $1000 a year in Pension (if I get a standard salary increase) and the extra 24K I would put in my 401K - on paper it looks like OMY is the safe bet? It works out to be about $1300 a year extra in pension to take the package compared to if I retired on the same day without the package according to their calculator.

I guess it is that loss of $1000 a year for the rest or our lives by not working OMY that is bothering me and of course not building my 401K and starting to draw down my 401K to make ends meet before Social Security.

A few years ago, before I found Bogleheads (do we just abbreviate that BB or BBH?) - when I was paying a financial planner he recommended that I retire at 63. I found Bogleheads and found out how much I didn't know and how much I should have saved in my 401K and now I feel like it might be OMY and OMY and OMY. I'm at peak earnings and walking away from what to me is a lot of money is bothering me.

Really struggling to decide to retire now or wait to FRA.

OMY or Now?

Nowizard
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Re: Now or One More Year?

Post by Nowizard » Thu May 16, 2019 11:18 am

Did I miss the amount of SS if you retire prior to FRA?
Also, it appears you would have a pre-tax income of $6,000 or so a month and monthly expenses of approximately $5,500. Your income will result in taxation on SS and pension and any state and local taxes, so it appears you would be cutting it close. If this is accurate, then working to FRA, at least, is the conservative approach if you do not plan to withdraw from your retirement accounts until required to do so.
Tim

delamer
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Re: Now or One More Year?

Post by delamer » Thu May 16, 2019 11:25 am

If you retired today with the extra 1 year pension credit versus retiring in one year, would there be any difference in your pension?

kaudrey
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Re: Now or One More Year?

Post by kaudrey » Thu May 16, 2019 2:12 pm

It looks like your fixed income will just about cover your costs, even if you retire now. If that is the case, then you have an $800K cushion to cover any shortfall.....I'd go now.

surfstar
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Re: Now or One More Year?

Post by surfstar » Thu May 16, 2019 2:25 pm

You have no NEED to work OMY. Do you DESIRE to?

Or are there better things to occupy your time than commuting and working?
The great thing about being financially independent, is the freedom to choose what to do. Choose what makes you happier and enjoy! :beer

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 2:33 pm

Nowizard wrote:
Thu May 16, 2019 11:18 am
Did I miss the amount of SS if you retire prior to FRA?
Also, it appears you would have a pre-tax income of $6,000 or so a month and monthly expenses of approximately $5,500. Your income will result in taxation on SS and pension and any state and local taxes, so it appears you would be cutting it close. If this is accurate, then working to FRA, at least, is the conservative approach if you do not plan to withdraw from your retirement accounts until required to do so.
Tim
Hi Tim,

I didn't figure out the Social Security before FRA since wouldn't want pull Social Security before FRA I was thinking to pull from my 401K. But it would just be one year early so I figured 8% less and it looks like $2516 for myself and $1258 for DW. Which would be an issue. I'm heavily leaning to OMY.
Thank you for you insights.

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DanMahowny
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Re: Now or One More Year?

Post by DanMahowny » Thu May 16, 2019 2:34 pm

Retire now. Just because retirement is awesome.
Funding secured

Topic Author
jdv01
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Joined: Mon Mar 06, 2017 4:10 pm

Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 2:35 pm

delamer wrote:
Thu May 16, 2019 11:25 am
If you retired today with the extra 1 year pension credit versus retiring in one year, would there be any difference in your pension?
If I work an extra year my pension if I get the standard salary increase would be an extra $1000 a year for the rest of our lives. No COLA on the pension.

Thanks

Topic Author
jdv01
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Joined: Mon Mar 06, 2017 4:10 pm

Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 2:39 pm

kaudrey
DanMahowny

Thank You for your thoughts. You echo what my old manager who retired a few years ago tells me about retirement.

bampf
Posts: 299
Joined: Thu Aug 04, 2016 6:19 pm

Re: Now or One More Year?

Post by bampf » Thu May 16, 2019 2:41 pm

jdv01 wrote:
Thu May 16, 2019 2:35 pm
delamer wrote:
Thu May 16, 2019 11:25 am
If you retired today with the extra 1 year pension credit versus retiring in one year, would there be any difference in your pension?
If I work an extra year my pension if I get the standard salary increase would be an extra $1000 a year for the rest of our lives. No COLA on the pension.

Thanks
An extra $1000 a year works out to $2.73 a day. If you are so tight that this matters, you can't afford to retire. Probably ever. If you want to work, great. If you want to add to your accounts, great. If you get hit by a bus tomorrow, are you annoyed? LIfe happens pretty quick. My Dad passed instantly with plenty of money. Didn't help him a bit. If you have enough, you have enough. A grand a year matters very little and even less over time.

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 2:50 pm

surfstar wrote:
Thu May 16, 2019 2:25 pm
You have no NEED to work OMY. Do you DESIRE to?

Or are there better things to occupy your time than commuting and working?
The great thing about being financially independent, is the freedom to choose what to do. Choose what makes you happier and enjoy! :beer
Hi surfstar

I understand that sentiment. I do have an emotional attachment to the business unit. I moved from the software development side of the business to IT a long time ago and was instrumental in implementing a lot of what is standard IT functions in the business today. Also as part of this package I told that the business would not be able to hire a replacement for anyone who leaves. Knowing the projects on the table as well as the day to day work I know my Co-Workers will be left with a larger share of the burden and the thought of leaving creates some feelings of guilt.

I'm at odds over Do I have enough to Retire on and Should I? There are plenty of days I think I would rather be doing something else but there are days where I enjoy work but in the end it is still work.

Thanks for your input surfstar.

delamer
Posts: 8164
Joined: Tue Feb 08, 2011 6:13 pm

Re: Now or One More Year?

Post by delamer » Thu May 16, 2019 2:51 pm

jdv01 wrote:
Thu May 16, 2019 2:35 pm
delamer wrote:
Thu May 16, 2019 11:25 am
If you retired today with the extra 1 year pension credit versus retiring in one year, would there be any difference in your pension?
If I work an extra year my pension if I get the standard salary increase would be an extra $1000 a year for the rest of our lives. No COLA on the pension.

Thanks
So staying another year would get you an additional $30,000 over a 30 year retirement, plus whatever your current salary, minus one year’s pension.

If you make $150,000, then $150,000 plus $30,000 minus $42,000 (roughly), so $138,000 would be your gross return on the added year’s work.

Obviously, you’d substitute your actual salary above.

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 2:58 pm

bampf wrote:
Thu May 16, 2019 2:41 pm
An extra $1000 a year works out to $2.73 a day. If you are so tight that this matters, you can't afford to retire. Probably ever. If you want to work, great. If you want to add to your accounts, great. If you get hit by a bus tomorrow, are you annoyed? LIfe happens pretty quick. My Dad passed instantly with plenty of money. Didn't help him a bit. If you have enough, you have enough. A grand a year matters very little and even less over time.
[/quote]

Bampf you are correct. 1K a year will not make a difference in my life style. I'm at a bit of time crunch to evaluate this offer since it has a time limit on it as well as a cap on the number of employees who can take the offer. I guess emotionally I was gearing towards 13 months for now and now I have to make a decision to take what to me is an early offer or do OMY and stay on schedule. My wife is OK either way though she has been urging me to retire for the last 6 months. The thought of pulling money from my retirement accounts is also something that I would have to come to terms with though we may be able to get by with less than I think.

Thank you your input I appreciate the incite it never occurred to me to break it out by day

bampf
Posts: 299
Joined: Thu Aug 04, 2016 6:19 pm

Re: Now or One More Year?

Post by bampf » Thu May 16, 2019 3:15 pm

jdv01 wrote:
Thu May 16, 2019 2:58 pm
bampf wrote:
Thu May 16, 2019 2:41 pm
An extra $1000 a year works out to $2.73 a day. If you are so tight that this matters, you can't afford to retire. Probably ever. If you want to work, great. If you want to add to your accounts, great. If you get hit by a bus tomorrow, are you annoyed? LIfe happens pretty quick. My Dad passed instantly with plenty of money. Didn't help him a bit. If you have enough, you have enough. A grand a year matters very little and even less over time.
Bampf you are correct. 1K a year will not make a difference in my life style. I'm at a bit of time crunch to evaluate this offer since it has a time limit on it as well as a cap on the number of employees who can take the offer. I guess emotionally I was gearing towards 13 months for now and now I have to make a decision to take what to me is an early offer or do OMY and stay on schedule. My wife is OK either way though she has been urging me to retire for the last 6 months. The thought of pulling money from my retirement accounts is also something that I would have to come to terms with though we may be able to get by with less than I think.

Thank you your input I appreciate the incite it never occurred to me to break it out by day
[/quote]

I think I would struggle with pulling money out of my accumulation accounts and I would definitely struggle with what I would do. Its hard to change gears. The nice thing is the decision isn't really monetary. That being said, it isn't easy. Thanks for letting me see your decision process. Good luck to you....

detroitbabu
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Re: Now or One More Year?

Post by detroitbabu » Thu May 16, 2019 3:21 pm

Will you lose your job if you don't take this offer or can you stay for another year?

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 3:35 pm

detroitbabu wrote:
Thu May 16, 2019 3:21 pm
Will you lose your job if you don't take this offer or can you stay for another year?
Hi Detroitbabu

I won't lose my job. If anything I have more work than I can do with a couple of major projects. My direct manager is not who I do most of the work for - I know it is a strange set up but most of what I do supports a profitable business unit for the Megacorp. You would think I would report to them but I report up through corporate IT instead. But the business unit that I do the work for is growing so I don't see any issues with job security. So I have zero pressure to take the package and have officially zero pressure to stay - of course I understand if I leave that will leave a hole in the local group that won't be filled so I understand the realities.

Thanks

bampf
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Re: Now or One More Year?

Post by bampf » Thu May 16, 2019 3:52 pm

jdv01 wrote:
Thu May 16, 2019 3:35 pm
detroitbabu wrote:
Thu May 16, 2019 3:21 pm
Will you lose your job if you don't take this offer or can you stay for another year?
<snip>

...of course I understand if I leave that will leave a hole in the local group that won't be filled so I understand the realities.

Thanks
This is a fascinating thread. Thanks for posting. It suddenly occurred to me that this may be in lieu of a "thou shalt cut". Put another way, if you don't take the package, will corp come down and mandate a reduction? Will the reduction hit someone that is less able to absorb the financial status change? Frankly I wrestle with this every day. It makes my job easier when someone says "I wanna go" because that means I don't have to let go of the person that is the only breadwinner for the family with a group of small children. Certainly not suggesting this is the case for you, but, it could be. Instead of feeling guilty about leaving, if you are ready, maybe you can feel good about making it easier for people that aren't ready to stay a little longer.... Just a thought.

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Thu May 16, 2019 4:58 pm

bampf wrote:
Thu May 16, 2019 3:52 pm
This is a fascinating thread. Thanks for posting. It suddenly occurred to me that this may be in lieu of a "thou shalt cut". Put another way, if you don't take the package, will corp come down and mandate a reduction? Will the reduction hit someone that is less able to absorb the financial status change? Frankly I wrestle with this every day. It makes my job easier when someone says "I wanna go" because that means I don't have to let go of the person that is the only breadwinner for the family with a group of small children. Certainly not suggesting this is the case for you, but, it could be. Instead of feeling guilty about leaving, if you are ready, maybe you can feel good about making it easier for people that aren't ready to stay a little longer.... Just a thought.
[/quote]

Bampf
You are absolutely correct in that assumption. They want to hit a certain number of people leaving the company voluntarily but if that doesn't happen the next option is of course since they have a number they have communicated to downsize if it isn't voluntary then I think it would become involuntary. I have family who work for the same company and of course many friends since I've been here for a long time. Time to talk some more with the wife. I should have formal paper work in the next day with specific details. I will also need to run some more simulations using the various calculators.

Thank you so much for your insights Bampf.

Topic Author
jdv01
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I may have already missed out

Post by jdv01 » Thu May 16, 2019 5:11 pm

Just logged in to the corporate site and they already have almost 50% of the slots taken on the first working day of this process which was yesterday and it is supposed to go another 30 days. So if that pace kept up I may have already missed this opportunity since it may be filled by now. I will check again tomorrow and see but I will need to make a decision very soon.

Thanks for the all of the responses so far.

Topic Author
jdv01
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Update Now or One More Year?

Post by jdv01 » Thu May 16, 2019 9:45 pm

Got home from work and decided to go ahead and try to start the retirement process. I filled out all of the documents online and hit submit. The pension amount on my documents looks as if I am going to receive the extra year of pension credit. The amount matches the amount I modeled that included the benefit.

Now I will see if I don't decide to not proceed since I have until the middle of June to change my mind. I'm already having second thoughts.

Thanks for all of input everyone.
jdv01

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Watty
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Re: Now or One More Year?

Post by Watty » Thu May 16, 2019 10:19 pm

jdv01 wrote:
Thu May 16, 2019 11:09 am
Pension would be about $1000 year less than if I worked OMY and received a standard pay increase (not guaranteed next year) according to the Corporate calculator they provided to compare the Incentive Plan VS Retire Now VS OMY.


You need to be very careful about how that is calculated to make sure that is calculated using the same starting date of the pension.

There is a chance that it was calculated using your retirement date as the pension start date. If they did that then you would be receiving an extra years pension payments if you retired a year sooner.

bampf
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Re: Update Now or One More Year?

Post by bampf » Thu May 16, 2019 11:29 pm

jdv01 wrote:
Thu May 16, 2019 9:45 pm
Got home from work and decided to go ahead and try to start the retirement process. I filled out all of the documents online and hit submit. The pension amount on my documents looks as if I am going to receive the extra year of pension credit. The amount matches the amount I modeled that included the benefit.

Now I will see if I don't decide to not proceed since I have until the middle of June to change my mind. I'm already having second thoughts.

Thanks for all of input everyone.
jdv01
I think about this a lot. It's a big leap. Fear of the unknown can be crippling. But it can be exhilarating. One of my favorite movies right now is the secret life of Walter Mitty. It's a great story and you should watch it if you can.

Stay.
Go.

Either way, experience the moment and then go play a little goat hockey. What a great blessing to have choice. There is no right answer, only that answer that is right for you and once you make it, never look back. Peace and good luck!

JoeRetire
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Re: Now or One More Year?

Post by JoeRetire » Fri May 17, 2019 4:24 pm

jdv01 wrote:
Thu May 16, 2019 2:33 pm
I didn't figure out the Social Security before FRA since wouldn't want pull Social Security before FRA I was thinking to pull from my 401K. But it would just be one year early so I figured 8% less and it looks like $2516 for myself and $1258 for DW. Which would be an issue. I'm heavily leaning to OMY.
If you are so close to the line that retiring now means claiming your SS benefits now and that would cause an "issue", then don't retire now by any means. Keep working - at least one more year.

If it were me, I'd look very closely at delaying my social security benefits until 70.

Topic Author
jdv01
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Re: Update Now or One More Year?

Post by jdv01 » Fri May 17, 2019 9:46 pm

bampf wrote:
Thu May 16, 2019 11:29 pm
I think about this a lot. It's a big leap. Fear of the unknown can be crippling. But it can be exhilarating. One of my favorite movies right now is the secret life of Walter Mitty. It's a great story and you should watch it if you can.

Stay.
Go.

Either way, experience the moment and then go play a little goat hockey. What a great blessing to have choice. There is no right answer, only that answer that is right for you and once you make it, never look back. Peace and good luck!
[/quote]

Great advice bampf - I know that I'm not good at living in the moment and should work on it.

jdv01

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WoodSpinner
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Re: Now or One More Year?

Post by WoodSpinner » Fri May 17, 2019 9:55 pm

It seems like you might benefit from building out a model of your retirement cash flows to get a better handle on your decision. The Retirement Portfolio Model is a great place to start.

You might also check out [url https://turbotax.intuit.com/tax-tools/c ... taxcaster/]TaxCaster[/url] for a quick estimate of your tax projections.

This might provide some powerful insight into the economics of Retirement.

Next step though involves what do you want to do in Retirement. Lot’s of choices — you are fortunate to have the time and the ability to choose. Many don’t.

Best of luck,

WoodSpinner

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Fri May 17, 2019 10:16 pm

JoeRetire wrote:
Fri May 17, 2019 4:24 pm
jdv01 wrote:
Thu May 16, 2019 2:33 pm
I didn't figure out the Social Security before FRA since wouldn't want pull Social Security before FRA I was thinking to pull from my 401K. But it would just be one year early so I figured 8% less and it looks like $2516 for myself and $1258 for DW. Which would be an issue. I'm heavily leaning to OMY.
If you are so close to the line that retiring now means claiming your SS benefits now and that would cause an "issue", then don't retire now by any means. Keep working - at least one more year.

If it were me, I'd look very closely at delaying my social security benefits until 70.
Thank You for the advice.

I don't expect to take Social Security early. So if I do retire I will be pulling whatever extra I need above my pension from my 401K. Not sure I want to delay until 70 my Social Security, neither one of my parents made it that long. I don't want to draw down my 401K to much putting Social Security off for 5 years. So I would try keep my expenses as low as possible during that time. I've been scrimping and saving to make it this far sometimes working two full time jobs. If I retire and have to scrimp just to get by it kind of seems pointless to retire in to that situation.

Then at 70 I would be getting Social Security, Pension and RMDs and I would suddenly have more money and probably just turn around and put it back in to the market. Or my DW would have the money and would be trying to figure out what to do with it. I see people around me all of the time dying before they make it to 70. I've had two neighbors in early retirment die of falls in the last couple of years.

jdv01

Topic Author
jdv01
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Re: Now or One More Year?

Post by jdv01 » Fri May 17, 2019 10:32 pm

Thank You Woodspinner that is excellent advice. I will dig in to those tools. I have a month to figure out if I going to really retire. I know that I will be feeling the pull of staying and supporting the team at work. I think 50% of my work group qualified to take this package. And I also know we have more work than we can accomplish with no one leaving. AFAIK I'm the only one who is seriously thinking of taking the package. The idea of losing 25% or more of their team and not being able to replace them really got their attention.

My previous boss retired a few years ago and he has been telling me to retire almost everytime we talk. Though that might be because he wants someone to hang out with. But his words to me is you won't need as much money as you think you do.

Thanks again Woodspinner for the links.

jdv01

surfstar
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Re: Now or One More Year?

Post by surfstar » Fri May 17, 2019 10:47 pm

Congrats!
:sharebeer

We dream of the day we can pull the plug. Don't look back and enjoy the future!

JoeRetire
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Re: Now or One More Year?

Post by JoeRetire » Sat May 18, 2019 5:51 am

jdv01 wrote:
Fri May 17, 2019 10:16 pm
Not sure I want to delay until 70 my Social Security, neither one of my parents made it that long.
If you have inherited something from both parents that causes very short lifespans, then you will indeed need to think this through carefully. Talk with your medical professionals.

Of course your spouse's anticipated lifespan is rather important here too (perhaps more so), since they will shortly be impacted by the size of your benefits.
If I retire and have to scrimp just to get by it kind of seems pointless to retire in to that situation.
I totally agree. Don't retire if you can't afford to do so. Keep working instead.
I see people around me all of the time dying before they make it to 70.
I'm guessing you see people around you all the time not dying. Sometimes we don't notice them as much and forget how many of them there are.

Sandi_k
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Re: Now or One More Year?

Post by Sandi_k » Sat May 18, 2019 12:05 pm

Take the retirement package, and tell them that you're willing to be recalled occasionally if they have a need, given that the unit you support is so profitable. You can make up the $30k in a year or two of extremely PT work.

Best of both worlds!

Golf maniac
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Re: Now or One More Year?

Post by Golf maniac » Sat May 18, 2019 9:49 pm

You can always be a contractor or work part time if you are not mentally ready to retire fully. When I retired it took me a full year to get my week lined up for what I would do each day. Now, 3 years after retirement we moved to a new state. So getting a new schedule set up now. Lots of helpful advice here on retirement, best of luck!

Dottie57
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Re: Now or One More Year?

Post by Dottie57 » Sat May 18, 2019 10:17 pm

How is your health? Is the job stressful?

Megacorp paid me to leave about 13 months ago. I planned to leave at 65 instead of 61. Financial loses are 3 years of 401k plus + 3% match + 3% safe harbor. So pretty significant. Then I started draw down from funds to payfor my life 3 years early. Sounds like a disaster right?

Well today my health is better measured by good blood pressure, resting pulse, weight decrease. As an asthmatic, my lung and breathing capacity is measured each year - significant improvements seen this year.

All in all I am much healthier.

Very glad to have left work behind. Accounts slightly smaller, but am in a better place physically.

I vote go if you want to.

pennywise
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Re: Update Now or One More Year?

Post by pennywise » Sun May 19, 2019 7:15 am

jdv01 wrote:
Thu May 16, 2019 9:45 pm

Now I will see if I don't decide to not proceed since I have until the middle of June to change my mind. I'm already having second thoughts.
I'm going to frame this in a non-financial model that of course impacts how you then reason out the finances. Developmental change is something we usually think about as only applying to the young--babies learn to walk then talk then socialize when they are old enough to go to school etc etc.

But growth and change doesn't stop at a certain age or stage. We develop and grow emotionally as we launch from school into our careers. We develop as we find partners and form families. We develop as we make life long friendships and say goodbye to much loved family members.

And so it is with retirement. It's a developmental stage, and it is similar to the one many people face upon graduation from the last school level--it's stepping off a well known and well trod road into....what? It's unknown and it feels very intimidating to leave behind the familiar and the known.

It can be especially intimidating for those who are logical, systematic thinkers as you are OP, and as are many on this forum. For the analytical mind, being in a state of uncertainty is a huge blinking red DANGER sign. You want to set the goal, identify the benchmarks and get the project completed. But this retirement project is one you've never tackled. The markers are yours alone and you can't see them clearly yet in terms of how your life will change. You don't really know yet what the goal even is, other than ending up living a happy life without working any more. And that is what makes the STEM mind explode :wink:

OP, you have enough money to retire and you know that. Trust that once you retire you will find other things that will challenge and reward you. Listen to kindred spirits including your former boss and those who populate BH saying how wonderful life can be after you finish that last project.

And last but not least please don't forget work is work. Your company is, as the saying goes, showing you who they are. They are making this offer not to tempt people into doing what is best for the employees, they are doing it to reduce the work force with a carrot before they get out the stick. It's not good and it's not bad, it's just work.

Projects and heavy demands and deadlines are there today and they will be there tomorrow whether or not you stay or go. Believe this also, the company will figure out how to get the work done with or without you.

And although we form work 'families', in the end work is not family and those friendships are based on what you do, not who you are. Your family and your friends are waiting for you, so don't be afraid to cut loose and free up your time and your mind to start the next development stage. Good luck!

Cardinalsfan
Posts: 19
Joined: Wed Sep 06, 2017 11:18 am

Re: Now or One More Year?

Post by Cardinalsfan » Sun May 19, 2019 4:23 pm

Good post pennywise. Having just given my megacorp my formal notice I too struggled with that decision. Ultimately for me and I hope OP, you have to weigh everything. But like anything else there will always be yet another reason or consideration to be had by waiting. I wonder how many of us have dealt with paralysis by analysis! In my case going now or a year is significant financially but the freedom, lack of stress, etc I think will more than make up for it. Ultimately I had many opinions on either side of the question. Do what feels right to you and go get after the rest of your life!

stevekozak2
Posts: 67
Joined: Sun Dec 25, 2016 12:38 pm

Re: Now or One More Year?

Post by stevekozak2 » Sun May 19, 2019 7:42 pm

My financial brain says you should work another year and get that car paid off and that house as paid down as possible. Going into retirement with debt is a not a great idea. On the other hand, your family's history of lack of longevity steers me into the other direction completely. Live while you can and spend as much time with your family as possible instead of in a car commuting or at a work desk working. Life is short even for the healthiest of us. I personally plan to retire the minute I can. I am hoping (and working towards) that being before my FRA. :beer

User avatar
MikeWillRetire
Posts: 345
Joined: Fri Jun 29, 2012 12:36 pm

Re: Update Now or One More Year?

Post by MikeWillRetire » Sun May 19, 2019 7:52 pm

pennywise wrote:
Sun May 19, 2019 7:15 am
jdv01 wrote:
Thu May 16, 2019 9:45 pm

Now I will see if I don't decide to not proceed since I have until the middle of June to change my mind. I'm already having second thoughts.
I'm going to frame this in a non-financial model that of course impacts how you then reason out the finances. Developmental change is something we usually think about as only applying to the young--babies learn to walk then talk then socialize when they are old enough to go to school etc etc.

But growth and change doesn't stop at a certain age or stage. We develop and grow emotionally as we launch from school into our careers. We develop as we find partners and form families. We develop as we make life long friendships and say goodbye to much loved family members.

And so it is with retirement. It's a developmental stage, and it is similar to the one many people face upon graduation from the last school level--it's stepping off a well known and well trod road into....what? It's unknown and it feels very intimidating to leave behind the familiar and the known.

It can be especially intimidating for those who are logical, systematic thinkers as you are OP, and as are many on this forum. For the analytical mind, being in a state of uncertainty is a huge blinking red DANGER sign. You want to set the goal, identify the benchmarks and get the project completed. But this retirement project is one you've never tackled. The markers are yours alone and you can't see them clearly yet in terms of how your life will change. You don't really know yet what the goal even is, other than ending up living a happy life without working any more. And that is what makes the STEM mind explode :wink:

OP, you have enough money to retire and you know that. Trust that once you retire you will find other things that will challenge and reward you. Listen to kindred spirits including your former boss and those who populate BH saying how wonderful life can be after you finish that last project.

And last but not least please don't forget work is work. Your company is, as the saying goes, showing you who they are. They are making this offer not to tempt people into doing what is best for the employees, they are doing it to reduce the work force with a carrot before they get out the stick. It's not good and it's not bad, it's just work.

Projects and heavy demands and deadlines are there today and they will be there tomorrow whether or not you stay or go. Believe this also, the company will figure out how to get the work done with or without you.

And although we form work 'families', in the end work is not family and those friendships are based on what you do, not who you are. Your family and your friends are waiting for you, so don't be afraid to cut loose and free up your time and your mind to start the next development stage. Good luck!
Loved reading this!

michaelsieg
Posts: 563
Joined: Mon Jan 07, 2013 11:02 am

Re: Now or One More Year?

Post by michaelsieg » Sun May 19, 2019 8:23 pm

jdv01
Thanks for this interesting post - good luck with whatever you ultimately decide to do.
One thing you should consider is the sequence of returns risk - early in retirement you are the most vulnerable. With a 100% equity allocation and the need to draw from your portfolio early in retirement until you take SS, you should consider at least during that "transition period" a less aggressive equity allocation - once you take SS (at whatever age you decide to take it) and have your pension, you can then move again to a more aggressive allocation. But a 30-40% drop in equities early in your retirement could have long-lasting consequences - in other words, why keep playing if you have won the game.
Just a thought
Good luck
Michael

Topic Author
jdv01
Posts: 38
Joined: Mon Mar 06, 2017 4:10 pm

Re: Now or One More Year?

Post by jdv01 » Mon May 20, 2019 11:40 am

Sandi_k wrote:
Sat May 18, 2019 12:05 pm
Take the retirement package, and tell them that you're willing to be recalled occasionally if they have a need, given that the unit you support is so profitable. You can make up the $30k in a year or two of extremely PT work.

Best of both worlds!
That would be nice but as part of the agreement anyone who leaves is unable to be replaced for 2 years. Others have retired in the past and come back as contractors but in this instance that is not going to be allowed.

But thanks for the suggestion.
jdv01

Topic Author
jdv01
Posts: 38
Joined: Mon Mar 06, 2017 4:10 pm

Re: Now or One More Year?

Post by jdv01 » Mon May 20, 2019 11:48 am

Dottie57 wrote:
Sat May 18, 2019 10:17 pm
How is your health? Is the job stressful?

Megacorp paid me to leave about 13 months ago. I planned to leave at 65 instead of 61. Financial loses are 3 years of 401k plus + 3% match + 3% safe harbor. So pretty significant. Then I started draw down from funds to payfor my life 3 years early. Sounds like a disaster right?

Well today my health is better measured by good blood pressure, resting pulse, weight decrease. As an asthmatic, my lung and breathing capacity is measured each year - significant improvements seen this year.

All in all I am much healthier.

Very glad to have left work behind. Accounts slightly smaller, but am in a better place physically.

I vote go if you want to.
Hi Dottie57

Not stressed at all by the job, the commute can be stressful. I remember following your posts when you were let go from your job. I have a couple of brother-in-laws who worked for a company where thy let go all employees over the age of 60yrs. They did this last year and they gave them a large severance package and made them sign a "this is age discrimination agreement" to get the package. I'm glad to hear you are doing well. Since I have realized that I can retire if I need to my stress levels have gone down significantly. I'm sure my health would approve if I weren't spending 10 hours a day working and commuting.

Thanks for your thoughts Dottie57

jdv01

Topic Author
jdv01
Posts: 38
Joined: Mon Mar 06, 2017 4:10 pm

Re: Now or One More Year?

Post by jdv01 » Mon May 20, 2019 12:26 pm

michaelsieg wrote:
Sun May 19, 2019 8:23 pm
jdv01
Thanks for this interesting post - good luck with whatever you ultimately decide to do.
One thing you should consider is the sequence of returns risk - early in retirement you are the most vulnerable. With a 100% equity allocation and the need to draw from your portfolio early in retirement until you take SS, you should consider at least during that "transition period" a less aggressive equity allocation - once you take SS (at whatever age you decide to take it) and have your pension, you can then move again to a more aggressive allocation. But a 30-40% drop in equities early in your retirement could have long-lasting consequences - in other words, why keep playing if you have won the game.
Just a thought
Good luck
Michael
Hi Michael,

Thank you for the insights on sequence of returns. I've been thinking about that myself. I've always figured I would work until FRA and then just have to set aside 40-50K to get me through until I take Social Security. But I will definitely look at doing something to save guard enough to get us through until Social Security.

My bother-in-law moved his entire portfolio to CDs last Nov. He did the math and figured he had won the game and wouldn't need to grow the his money at all for the rest of their lives. It would be nice to have that kind of cash but I know that I'm lucky to even have a pension so I count my blessings.

jdv01

Topic Author
jdv01
Posts: 38
Joined: Mon Mar 06, 2017 4:10 pm

Re: Update Now or One More Year?

Post by jdv01 » Mon May 20, 2019 12:48 pm

Thank You Pennywise

That is an excellent analogy you have on leaving school and transitioning to the workplace. There is definitely uncertainty involved. I thought I had this one last year to get everything lined up and to add another sandbag to the dike so to speak. So this sudden opportunity has left me scrambling but I think that you have outlined very compelling arguments for just taking the opportunity when you get the chance. I have to make this transition at some point short of just working until the end and I know a year from now I would be thinking maybe one more year.

There are some decisions we will make that we just have to get correct such as Medicare since for many of us there is no do over. I think that makes it a little more daunting but you would think with all of my life experience and the knowledge of the collective Bogleheads that we can make the best of a challenging situation.

Thanks so much Pennywise for the great advice I very much appreciate the words of wisdom.

jdv01

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