53/Pension and ready to retire

[Denim]

Fifty-three with a government pension and I am SO ready to retire. Please tell me what you think. I have a defined pension with a cola and medical insurance for life at $148.00 a month. Right now I make $74,200.00 a year so it will be a change, but worth it. I've worked there for 28 and a half years and I really do not want to wait much longer for more pay. Thirty years is the magic number, but I do not think it is worth the wait! You know how that goes. My vehicle is paid for and my house is worth $190,000.00 and paid in full. I have the basic utilities as you all do. I have about $12,000.00 a year coming in for oil royalties. When oil is high it could be more. I can retire with a pension now with a monthly payment of $3581.00 per month, Jan 2011 at $3697.00 or if I wait until Feb. of 2011 I can retire at $3773.00. My feeling is that in Feb. it will sound better to wait a little longer...the trap. I'm really ready now. I'm spoiled in a lot of ways, but I think I can handle spending less. I've been lurking for quite some time and find you are very helpful to the I am's who come along wanting to be retired as you are. Thanks a lot

$3581.00 pension
$1000.00 additional income +
= $4581.00 per month

I only have $90,000.00.00 in savings.

water 100.00
alarm system 37.00
home phone 30.00
internet 67.00
cable 85.00
cell phone 86.00
gas 10.00
electric 200.00
property taxes 400.00 a month, I pay yearly
home insurance 167.00 a month, but I pay yearly
car insurance 50.00
Have a missed anything? This is it I think.

I could probably live cheaper by living alone. I could probably do better by not marrying, but I may get married this year. My gut tells me to get married before I retire so that I can have the "event" and have a reason to include him on my insurance plan. Two for $345.00 a month. Then again, I should protect my assets and retire, then get married. I live in a community property state. I live in a three story townhome (so tired of stairs after 20 years) and will be selling to buy a one story home with a bigger yard. Still a small yardl, but bigger than I have now. I guess this should be done before I marry for protection? Also, I will lose my widow social security benefit if I remarry and I will not be able to claim my social security at the age of 60. Bummer. It's so complicated as we get older and almost too much trouble to get married. What do you all do to protect your assets?

Looking foward to your replies and hoping for positive responses.

 

[georgefrick]

Wow, you sound like you have done well; I'm new so I don't have anything useful to say besides try to lower your spending now; while you plan your ER. Start living on what would be your new budget....

 

[aaronc879]

With a pension that big and low medical costs, i'd get out now before they realize how much they're paying you It shouldn't matter that you only have $90K saved. With a pension that size with limited health costs and a paid off home you should be able to add to your savings if you want to.

 

[Emeritus]

home phone 30.00
internet 67.00
cable 85.00
cell phone 86.00

FWIW I live in one of the high cost areas of the USA and pay less for these services than you do. For two cell phones and very high grade internet and cable and house phone I pay $240
check around for a better deal
In my community we have many "social" but not legal marriages among the SS set.

Otherwise go for it and have fun

 

[donheff]

If you get married will you elect a survivor annuity? If so will you take a reduction in annuity? A pre-nup will deal with the other assets.

 

[Emeritus]

If you get married will you elect a survivor annuity? If so will you take a reduction in annuity? A pre-nup will deal with the other assets.

If you gets married in most cases it is the spouse who has to consent if there is no survivor annuity. Many prenups miss this point

 

[Pete]

I can retire with a pension now with a monthly payment of $3581.00 per month, Jan 2011 at $3697.00 or if I wait until Feb. of 2011 I can retire at $3773.00. My feeling is that in Feb. it will sound better to wait a little longer...the trap.

I was in a similar position 2 and 1/2 years ago. The jump in pay would've even been greater for me if I stayed. So far the trap has not sprung and I'm glad I left.

 

[donheff]

I was in a similar position 2 and 1/2 years ago. The jump in pay would've even been greater for me if I stayed. So far the trap has not sprung and I'm glad I left.

If DW died and I remarried I would opt for a survivor annuity. Anyone I loved enough to marry I would love enough to cover with the annuity. I would use the pre-nup to specify that the new wife could not divorce me and claim part of the pension or other assets that I came into the marriage with.

Edit: I was actually trying to respond to Emeritus' post:

If you gets married in most cases it is the spouse who has to consent if there is no survivor annuity. Many prenups miss this point

 

[Emeritus]

If DW died and I remarried I would opt for a survivor annuity. Anyone I loved enough to marry I would love enough to cover with the annuity. I would use the pre-nup to specify that the new wife could not divorce me and claim part of the pension or other assets that I came into the marriage with.

Edit: I was actually trying to respond to Emeritus' post:

I'm just pointing out you have to be very very careful in how you do this.
Lots of very nasty cases involving military retired pay.
For my pension, survivor election was governed by statute and not controllable in a prenup
(don't have the problem, married to DW for 35 years)

A prenup covers all property, and says what each spouse gets. If you cut it too fine it may be held to be unreasonable. Best way to think of it is you are giving a wedding present to the spouse of the value of the survivor annuity . Get it valued and see if it's reasonable in the overall context.

 

[Katsmeow]

water 100.00
alarm system 37.00
home phone 30.00
internet 67.00
cable 85.00
cell phone 86.00
gas 10.00
electric 200.00
property taxes 400.00 a month, I pay yearly
home insurance 167.00 a month, but I pay yearly
car insurance 50.00
Have a missed anything? This is it I think.

Automobile fuel
Automobile repairs, maintenance, registration
Automobile replacement fund
Clothing
Income taxes
Food (groceries and dining out)
Household maintenance and repair
Appliances/furniture replacement fund
medical insurance
medical co-pays and deductibles
Personal - such as hair care, toothpaste, etc.
Gifts
Pets (if any)
Entertainment expenses
Computer and peripherals hardware, software
Vacation and travel
Printer, ink and paper, stamps
Fitness related

 

[donheff]

I'm just pointing out you have to be very very careful in how you do this.
Lots of very nasty cases involving military retired pay.
For my pension, survivor election was governed by statute and not controllable in a prenup... Best way to think of it is you are giving a wedding present to the spouse of the value of the survivor annuity . Get it valued and see if it's reasonable in the overall context.

I have no problem with the survivor annuity portion. But I would want to be sure she couldn't divorce me after a couple of years and take half my pension. That should be easy to achieve with a pre-nup.

 

[Emeritus]

I have no problem with the survivor annuity portion. But I would want to be sure she couldn't divorce me after a couple of years and take half my pension. That should be easy to achieve with a pre-nup.

its a minefield

See


http://www.tsc.state.tn.us/opinions/tca/PDF/012/LoweDE.pdf

 

[donheff]

its a minefield

See


http://www.tsc.state.tn.us/opinions/tca/PDF/012/LoweDE.pdf

I don't know. That decision seems reasonable. Half of the increase in the annuiity value that accrued during the course of the marriage. Invalidating the pre-nup application because she wasn't informed about the annuity. That seems like straight forward "half the product of the union" stuff.

I am talking about an annuity earned prior to the marriage and a pre-nup that would specifically describe it. I don't anticipate ever having to deal with this but who knows...

 

[Emeritus]

I don't know. That decision seems reasonable. Half of the increase in the annuiity value that accrued during the course of the marriage. Invalidating the pre-nup application because she wasn't informed about the annuity. That seems like straight forward "half the product of the union" stuff.

I am talking about an annuity earned prior to the marriage and a pre-nup that would specifically describe it. I don't anticipate ever having to deal with this but who knows...

Under the pre nup the retirement account is separate property in 1994.
Assume that all of the enhancement was due to the property becoming more valuable , not due to contributions from the marital community. this fits your case of an annuity earned prior to the marriage.

That is what the decision is about. If the increase was due to contributions during the marriage she gets half under the agreement.
voiding the prenup due to failure to do the prenup properly means she gets half of the increase in value of what would have been otherwise separate property

 

[Runner]

My $0.02 worth is that you can (and many do) obsess about nickles and dimes to the point of near-insanity (or beyond). You could obviously live comfortably for the foreseeable future on what you'll have coming in. It seems to me that much of the agonizing over nickles and dimes masks fears that aren't really financial in nature. If someone has reached the point of genuinely valuing free time over money, and will have anything resembling a livable retirement income, he or she will retire and find a way to make ends meet. If one really hasn't reached that point, one will continue to agonize over nickles and dimes and delay the decision. I'm in basically the same financial boat as you (albeit age 60), and when I first started thinking about retirement I made myself completely crazy with "What ifs?" -- going so far as to buy the wacky ESPlanner, which was a good decision only because it made me realize "This is completely absurd." Even before I made the decision to move to Belarus to be with my wife's family (discussed on a different thread), I had made the very liberating decision that "For God's sake, half the country lives on far less than I'll have coming in, and they don't have paid-off houses and zero debt. I'm through worrying about every last detail and making myself crazy. Barring a complete collapse of society, I can obviously live comfortably for 15-20 years. If society has to take care of me when I'm 80 and can't remember my own name, tough luck for society."

Not sure I actually responded to anything in your original post, but I do see an awful lot of people making themselves crazy trying to "get control" of their retirements in a way that just isn't humanly possible. As the Nike ads say, if you really value free time over money and pretty clearly aren't going to starve, "Just do it."

 

[beowulf]

Can't provide any advice on marriage, but it would really pay you to wait until age 55 and 30 years of service. You get 4% a year - 2% for each year plus 2% that you don't lose for being under 55. I am assuming you are under CSRS and not FERS as it appears you came into the gov about 1982, plus your pension is too large to be FERS. The extra 2 years you would have to work will net you an 8% increase in your pension plus a new high 3 as a basis for calculation.

I don't think your potential spouse would have any claim on part of your pension as you would have only been married a very short time before you retire - but a lawyer and a pre-nup can't hurt. Legally though, I doubt he would be entitled to anything.

Since you are under CSRS, your SS would be minimal in any event - assuming you have 40 quarters of coverage to qualify.

Best of luck.

 

[Amethyst]

If I did the math right, OP will get 57% of base pay after working less than 30 years and being younger than 55. That doesn't sound like CSRS.

Under CSRS, if you retire at 55 with 30 years service, you can get 55% of the average of your highest 3 years' salary.

Amethyst

Can't provide any advice on marriage, but it would really pay you to wait until age 55 and 30 years of service. You get 4% a year - 2% for each year plus 2% that you don't lose for being under 55. I am assuming you are under CSRS and not FERS as it appears you came into the gov about 1982, plus your pension is too large to be FERS. The extra 2 years you would have to work will net you an 8% increase in your pension plus a new high 3 as a basis for calculation.

I don't think your potential spouse would have any claim on part of your pension as you would have only been married a very short time before you retire - but a lawyer and a pre-nup can't hurt. Legally though, I doubt he would be entitled to anything.

Since you are under CSRS, your SS would be minimal in any event - assuming you have 40 quarters of coverage to qualify.

Best of luck.

 

[beowulf]

If I did the math right, OP will get 57% of base pay after working less than 30 years and being younger than 55. That doesn't sound like CSRS.

Under CSRS, if you retire at 55 with 30 years service, you can get 55% of the average of your highest 3 years' salary.

Amethyst

Actually, under CSRS, your pension is 56.25% of your high three average salary with 30 years of service at age 55. 56.25% of $74,200 would be $41,737. However, since she will be two years short on both age and years of service, she should receive (if we have all the correct facts) about $3,200 a month, which is less than she projects. It has to be CSRS - if it were FERS, her pension would be 28.5% of her high 3 even before some pretty tough penalties for retiring before her MRD. What hasn't been mentioned is that, unless she is law enforcement, there has to be an early out or RIF to retire before you are 55 with 30 years of service.

Maybe denim can enlighten us on these details.

 

[Denim]

Actually, under CSRS, your pension is 56.25% of your high three average salary with 30 years of service at age 55. 56.25% of $74,200 would be $41,737. However, since she will be two years short on both age and years of service, she should receive (if we have all the correct facts) about $3,200 a month, which is less than she projects. It has to be CSRS - if it were FERS, her pension would be 28.5% of her high 3 even before some pretty tough penalties for retiring before her MRD. What hasn't been mentioned is that, unless she is law enforcement, there has to be an early out or RIF to retire before you are 55 with 30 years of service.

Maybe denim can enlighten us on these details.

I've been in the rat race I hate so, and I am just now back to answer some of the the nice replies I received. Thank you!

It's the TCDRS pension. I can retire after 75 points, which is my age and years of service. Taxes will be deducted from the amount and there is a chance one of the oil wells could go dry in about 15 years, but I hopefully, I will have my social security by then.

 

[Denim]

Can't provide any advice on marriage, but it would really pay you to wait until age 55 and 30 years of service. You get 4% a year - 2% for each year plus 2% that you don't lose for being under 55. I am assuming you are under CSRS and not FERS as it appears you came into the gov about 1982, plus your pension is too large to be FERS. The extra 2 years you would have to work will net you an 8% increase in your pension plus a new high 3 as a basis for calculation.

I don't think your potential spouse would have any claim on part of your pension as you would have only been married a very short time before you retire - but a lawyer and a pre-nup can't hurt. Legally though, I doubt he would be entitled to anything.

Since you are under CSRS, your SS would be minimal in any event - assuming you have 40 quarters of coverage to qualify.

Best of luck.

You are right, a pre-nup is a must, and it's surprising how many pre-numps are contested. Luckily, it's a TCDRS pension and I will be able to draw SS, if it is still around.

 

[Denim]

If you get married will you elect a survivor annuity? If so will you take a reduction in annuity? A pre-nup will deal with the other assets.

I know I should not be so pestimistic, but it's sad to think someone could leave me and I would bring home less money for the rest of my life, because I elected an survivor annuity. He's fine with a pre-nup and has a retirement account (no near as much) that he is going to put in my name. He has children ( I do not ) and this is another big issue for me. The kids come along and contest the wills. My house is tied up in community issues. I guess it's best not to "if" everything to death, but...........

 

[travelover]

I know I should not be so pestimistic, but it's sad to think someone could leave me and I would bring home less money for the rest of my life, because I elected an survivor annuity. He's fine with a pre-nup and has a retirement account (no near as much) that he is going to put in my name. He has children ( I do not ) and this is another big issue for me. The kids come along and contest the wills. My house is tied up in community issues. I guess it's best not to "if" everything to death, but...........

My 2 cents is to not get married unless you really "need" to - definition of need is obviously up to you. If you are cutting it close anyway, a divorce will really screw up your retirement at an age where going back to work at any reasonable salary is probably not going to happen. Even with a prenup, as has been pointed out, you may still lose half and if you win, you still have big legal expenses and incredible stress. Look at the statistics for second (and third) marriages before you throw the dice.

 

[beowulf]

That explains it - a Texas state pension - which I know absolutely nothing about. Sorry, I thought it was a federal pension.