Job eliminated – Hoping to retire.

[gbstack]

My position was eliminated after 33 years with the same company. I did receive a good severance package that I should be able to live on for 3 years. I’m planning on taking at least a year off but I would really like to retire and work part time if needed.

After my severance runs out I’ll be 62 and I’ll start collecting my $37,000 non cola pension with a 100% survivor rate and my SS will be $20,000 at 62 and $9,500 for my spouse. So my total income at 62 will be $66,500. I may try to delay SS if things go well.

My total investments are $400,000 with about 80% mutual/index funds and 20% bonds and I have $75,000 in cash and CD’s.

I just paid off my mortgage and I currently have no debt. My expenses are $48,000 and could drop to around $41,000 with Obamacare. I get 100% with FIRECalc with expenses up to $62,000 for 30 years. So glad I found ER.org, I really enjoy it.

I think I can do it – do you agree?

 

[obgyn65]

Hello gbstack. If Firecalc says you are good to go, then you are good to go. Enjoy your retirement.

 

[heeyy_joe]

Welcome to the forum! You will be very OK, enjoy your retirement.

 

[NanoSour]

You are absolutely all set. Sit back and enjoy you new life.

 

[pb4uski]

Sounds like you are good to go to me. In a few years you may want to thnik through SS claiming strategies at socialsecuritysolutions.com. You may be better delaying SS if you can.

 

[SumDay]

I agree with obgyn, if Firecalc says you're OK, then you're good to go.

Isn't it great when a plan comes together?

Welcome to the board - stick around! There's lots to learn and discuss (in great detail!).

 

[haha]

My expenses are $48,000 and could drop to around $41,000 with Obamacare. I get 100% with FIRECalc with expenses up to $62,000 for 30 years.

I love it that he tooth fairy has stepped in and is now financing Obamacare.

If those of us who are taxpayers had to come up with this, it might be difficult.

Ha

 

[gbstack]

Thank you all for the positive encouragement. I’m just starting to get use to this new life and I like it so far. I think it will take several more months to really feel like I have retired. Thanks again.

 

[DeborahB]

Thank you all for the positive encouragement. I’m just starting to get use to this new life and I like it so far. I think it will take several more months to really feel like I have retired. Thanks again.

Don't be surprised if it takes longer - but enjoy it!

 

[mickeyd]

Welcome here gbstack.

I found myself in a simular situation about 10 years ago at age 58. After adding up all of my stash and then including DB and SS future income streams, I was elated to just sit back and watch it all produce as I had intended. So far, so good.

 

[chris2008]

Blessing in disguise...
Enjoy ER!

 

[Walt34]

Welcome to ER! I second the notion to consider delaying SS but it doesn't sound that critical for you so either way will work.

 

[eytonxav]

Best wishes for a long and happy retirement!

 

[gbstack]

I'm going to try my best to delay my SS for a couple of years. My other concern was my total investments of only $400,000. It seems so many post talk about having over 1 million in investments. I guess the $37,000 pension really helps offset my lower investments. I sure wish it was adjusted for inflation but I'm also very thankful I have one.

I sure hope I did not make any mistakes with FIRECalc.

 

[Ready]

A $37K pension is quite significant, considering your expenses are only between $41-$48K. Social security will give you a bit of cushion so that you don't have to rely too much on the $400K savings. However, I might not want to have 80% of my investment in equities if I was in retirement. I'm still working and I can't justify more than 60%. There is too much risk of a correction and you don't want to find yourself down $60-$70K if we have a 20% correction in the markets.

Congratulations on your new retirement! I can't wait to experience it some day!

 

[pb4uski]

The reason that you don't need a $1m nestegg is because your pension is a significant % of your living expenses and once your SS starts you SS and pension exceed your living expenses.

 

[JoeWras]

The reason that you don't need a $1m nestegg is because your pension is a significant % of your living expenses and once your SS starts you SS and pension exceed your living expenses.

+1.

 

[chilkoot]

Welcome aboard. Hope to heck you're able make it, especially since my own situation is very similar.

 

[daytripper]

If your income is $66,500 and your expenes are $48,000 that means your expenses are about 72% of your income. I have found that expenses tend to go up more often then they go down. What do you plan to do when you retire? travel, cruse, hobbies etc.. it can add up

I am always cautious about “having no debt” – I don’t have any loans either, but I have property taxes, fire insurance, EQ insurance, medical insurance, utilities, gas, maintenance/repairs etc.. and the expenses only go one way up…

 

[BigNick]

A $37K pension is roughly equivalent to a $1 million cash pile

 

[JoeWras]

A $37K pension is roughly equivalent to a $1 million cash pile

This is a big reason I don't discuss this stuff with friends and family, many of whom have COLA'd pensions. We're saying the same thing but in different languages.

To the OP, good luck and enjoy your ER! I'm an OMYer right now, half hoping for someone to tap me on my shoulder and tell me to leave.

 

[gbstack]

However, I might not want to have 80% of my investment in equities if I was in retirement. I'm still working and I can't justify more than 60%. There is too much risk of a correction and you don't want to find yourself down $60-$70K if we have a 20% correction in the markets.

Congratulations on your new retirement! I can't wait to experience it some day!

On the bond side would it be safe to invest in just one bond index - Spartan U.S. Bond Index Fund. Or should I be more diversified?

 

[ducky911]

I wonder if there is a calculator to compare a non cola vs cola pension...ie tell you the amount of your non cola pension you can spend and how much to invest?

 

[Meadbh]

I wonder if there is a calculator to compare a non cola vs cola pension...ie tell you the amount of your non cola pension you can spend and how much to invest?

Based on both generating streams of cash flow (with an arbitrary end point at hypothetical date of death) it should be possible to use any business calculator or spreadsheet to calculate the NPV (net present value) of each, or the FV (future value) for that matter. The difference would be equivalent to the amount of money that someone with a non-COLA pension should invest to ensure equivalent future cash flows.

Ah, pensions! I wish I had one!

 

[mickeyd]

Until I eventually "got" the idea that a guaranteed income stream had intrinsic value, I never appreciated the true value of a DB plan or even SS or lifetime disability grant.

The fact that DW and I have a guaranteed string of at least six income streams makes life very easy for us and allows us to invest a greater portion of our assets in equities than if we did not have such a floor. It is a real shame that pensions are fading away.