Am I Ready?

[buz14260]

I'd like opions on my situation.

I'm 59 years old and my employer is offering me a buyout that would put my pension at $60k with an increase to $62k after one year. The pension has a COLA of 1/2 of the CPI to a maximum of 3%. At 62 my social security will kick in and it should be about $17k per annum.

My wife is the same age and will work 3 more years. Her pension will be about $22k and social security about $12k.

We have managed to save over $500k in Roth IRA, 403b and 457 plans. Our net worth is about $800k. The house is paid for and we have no debt.

2005 we grossed $114k, but we managed to put $35k into retirement accounts. This year my income took a big jump and we will gross about $160k and we have put about $50k into retirement accounts.

Momentum tells me to keep working, but I've had enough. . .

I am soliciting your expert opinions on our financial health. Do we have enough to make it in retirement? If I keep working for three more years my pension will be about $70k and I'll be able to put another $75k into my retirement plans, but I just don't want to work anymore. I think we'll have enough to last us for 30 years or more and hopefully we won't have to dip into the retirement savings for a number of years.

Our total expenses for 2005 were about $58,000. This does not include social security, medicare, union dues, etc. which of course we won't have to pay in retirement.

We will both be covered by health insurance plans with very little expense to ourselves after we retire for the health insurance. For 2005 we had about $3300 in medical expenses.

[Mr._johngalt]

Originally Posted by Buz

I'd like opions on my situation.

I'm 59 years old and my employer is offering me a buyout that would put my pension at $60k with an increase to $62k after one year. The pension has a COLA of 1/2 of the CPI to a maximum of 3%. At 62 my social security will kick in and it should be about $17k per annum.

My wife is the same age and will work 3 more years. Her pension will be about $22k and social security about $12k.

We have managed to save over $500k in Roth IRA, 403b and 457 plans. Our net worth is about $800k. The house is paid for and we have no debt.

2005 we grossed $114k, but we managed to put $35k into retirement accounts. This year my income took a big jump and we will gross about $160k and we have put about $50k into retirement accounts.

Momentum tells me to keep working, but I've had enough. . .

I am soliciting your expert opinions on our financial health. Do we have enough to make it in retirement? If I keep working for three more years my pension will be about $70k and I'll be able to put another $75k into my retirement plans, but I just don't want to work anymore. I think we'll have enough to last us for 30 years or more and hopefully we won't have to dip into the retirement savings for a number of years.

I'm too tired to make fun of you (that's what I usually do).
You can read some of my old posts I guess, or not. Probably not.
Others here will be more helpful I'm sure.

JG

[Rich_in_Tampa]

Originally Posted by Buz

I'd like opions on my situation.

Welcome aboard. Stand by for some replies from people a lot smarter than I am in such matters, but it would be helpful to know what you consider your annual expenses to be. Assuming they are typical (say, 40 to 80K per year) it sounds like you should be able to FIRE. The other big variable is health insurance (both continued availability and cost), so that has to be factored in after your wife retires.

A 62K per year pension over 30 years has a present value at 6% in the range of $900k even unadjusted for inflation. Add in savings and you seem to be in good shape.

[HFWR]

You'll be grossing over $100k between pensions and SS, plus $20k with an SWR of 4% from the portfolio. Sounds pretty good from here. What about health insurance?

Try plugging the numbers into FIRECALC (see link at lower left of page), and see what it "thinks".

[Donzo]

Sounds like you are all set to me! As mentioned earlier it all depends on your monthly/yearly expenses. Being debt free and all the income streams you have available.... . This is "for sure" money also(assuming your co. is solvent) - not dependant on a portfolio as many of us are.
You are in an enviable position - pull the plug while it is still an "E"R.

[Cattusbabe]

Dude your done. Enjoy your retirement.

[astromeria]

Buzz on outta there, Buz. If your wife continues to work, you can keep on funding your Roths. Such a deal!

[bbuzzard]

Assuming that your expenses will not increase in retirement, you are more than ready. They only thing that could bite you is high inflation over a long period of time (since your job pension COLA is only 50% of inflation to 3% max). However, given your retirement income is almost twice your current expenses, and 50% of your expenses are covered by fully COLA'd pensions (SS), I would not get too worried.

Enjoy your retirement.

[modhatter]

for your information, there were a lot of very envyious people reading your post. We should all be so lucky.

As to when. I think it boils down to how lavish a retirement you would like to have. If you really want to have a lot of fun and travel, etc.- wait a few more years. If that's not in the cards, then say bye bye.

[donheff]

Based on your description of recent savings (put away $35 K on $110K income) your pensions alone will put you close to where you were re real expenses. I think you should look carefully at waiting until 70 or at least 67 before taking Social Security. Fund the difference from your Roth.

Read the most recent thread on delaying SS here. You will make a lot more COLAd income at 70 -- that will leave you in a secure state during retirement. Your tax situation in the meantime will be great - you will probably not have to hit the Roth money very hard at all.

[Dawg54]

Yes.

[goodguy1_64]

Yes.. Immediately..you're not getting any younger..

[ADJ]

Take the money and run and enjoy the rest of your life.

[Helen]

It looks like you are sitting real pretty. What do you want to do when you are retired ? How do you envision your life ?

Does your 60k per year pension include a survivorship benefit for your wife ? Would she be able to make it if you were to pass ?

If I had the pension and savings that you have, I wouldn't work the extra three years for a mere $10k more per year.

One more thing, like what others have asked, will you have health insurance ?

-helen

[Corporateburnout]

I would be out of there in a heartbeat. With this kind of a guarranteed pension and SS I would not hesitate for one minute.

[Spanky]

but I just don't want to work anymore. I think we'll have enough to last us for 30 years or more and hopefully we won't have to dip into the retirement savings for a number of years.

If you do not want to work any more and you are financially independent, what are you waiting for? Your money will last more than 30 years since your annual spending is only $58,000 (in 2005) while your income is $160K in 2006, $62,000 + ? in 2007, $62,000 + ? in 2008, $111K in $2009, etc. Just your income along will cover your expenses.

[newguy88]

Originally Posted by Buz

I'd like opions on my situation.

I'm 59 years old and my employer is offering me a buyout that would put my pension at $60k with an increase to $62k after one year. The pension has a COLA of 1/2 of the CPI to a maximum of 3%. At 62 my social security will kick in and it should be about $17k per annum.

My wife is the same age and will work 3 more years. Her pension will be about $22k and social security about $12k.

We have managed to save over $500k in Roth IRA, 403b and 457 plans. Our net worth is about $800k. The house is paid for and we have no debt.

2005 we grossed $114k, but we managed to put $35k into retirement accounts. This year my income took a big jump and we will gross about $160k and we have put about $50k into retirement accounts.

Momentum tells me to keep working, but I've had enough. . .

I am soliciting your expert opinions on our financial health. Do we have enough to make it in retirement? If I keep working for three more years my pension will be about $70k and I'll be able to put another $75k into my retirement plans, but I just don't want to work anymore. I think we'll have enough to last us for 30 years or more and hopefully we won't have to dip into the retirement savings for a number of years.

Our total expenses for 2005 were about $58,000. This does not include social security, medicare, union dues, etc. which of course we won't have to pay in retirement.

We will both be covered by health insurance plans with very little expense to ourselves after we retire for the health insurance. For 2005 we had about $3300 in medical expenses.

Buzz I am gonna do it on half that amount in 4 weeks. Do it.

[mickeyd]

but I just don't want to work anymore.

Man, I know the feeling. You have seemingly done all of the right things in order to reward yourself with a smooth ER.

Jump in, the water's fine. 8)

[rrspike]

i would give my left nut for a $60K defined benefit pension and health insurance. On top of that you have ss, other retirement a/cs, wife's share coming in....what's not to like? As I heard recently in an ad: "It's the biggest no-brainer in the history of mankind".
Do it.