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Retire or Not?
Old 06-20-2012, 12:14 PM   #1
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Retire or Not?

I'm facing an interesting choice in the next few years and I can't decide which way to go. The short of it is that by 2014 or 2015, I should be able to take early retirement (at age 60/61) and make about 25% more than I currently make. How? I have two pensions from two different states. The first is one from a job I had in the early 80s and I let it sit there gathering dust and considerable interest over the decades. The second is from my current employer. Combined, the two pensions would be equal to about 125% of my current salary. Should I retire? Would you? Are there any pitfalls to retiring at 60 or 61? Adding to the issue is that after 35+ years, I still enjoy what I do. But if I don't retire early, then the difference between my current salary and what I would have earned in retirement expands (I'm essentially maxxed out at the top of my salary line at work--not much more upside to my salary over the next few years apart from annual cost of living increases). I roughly calculated that if I were to remain on the job until I'm 70, I would be losing well over $350,000 from the difference between what I now make and what I would have made in retirement. I think the answer may be a "no-brainer"--so I guess what I'm really asking is if there are any downsides I haven't considered? Thanks.
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Old 06-20-2012, 12:22 PM   #2
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Keeping in mind the audience your question is addressed to, I think it's safe to predict what the consensus will be. If you have the health insurance issue addressed, it sure looks to me like you should retire.
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Old 06-20-2012, 12:27 PM   #3
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I think you answered the question yourself. Why in the world would you want to work if you don't have to? The only pitfall to retiring at 60/61 is that you didn't do it earlier. This is the early retirement forum afterall.
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Old 06-20-2012, 12:29 PM   #4
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Hi vcponsardin, welcome to the forum. Do the pensions have COLA?
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Old 06-20-2012, 12:32 PM   #5
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Hi vcponsardin, welcome to the forum. Do the pensions have COLA?

Yes. From 1 to 3%. But they're state pensions. Who knows what might happen in the current political climate...
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Old 06-20-2012, 12:40 PM   #6
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COLA and Medical are probably the two biggest concerns. I have an Aunt that took her retirement at 62 and her social security at the same time. Her retirement check and SS were more than enough in the beginning and she had a good saving account for the time (early 80's), but by the time she was 85 she was living with us because it wouldn't cover the minimums... She passed at age 92 and did not have a dime to her name for many years before that time...
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Old 06-20-2012, 12:43 PM   #7
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It doesn't look like you need to worry at all financially whether you retire tomorrow or at age 70. Don't feel obligated to retire just because you can afford to. Most people on this forum dislike their job and would retire in their 40's or maybe even earlier if they could afford it. You say you like your job. How much do you like it? If there aren't other things you'd rather do then why quit. If there are other things you'd rather do then you can be confident that you can retire at any time. I can't imagine liking a job so much that I wouldn't retire in your financial situation but that doesn't mean it's the right decision for you. Only you can determine that. Best of luck!
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Old 06-20-2012, 12:47 PM   #8
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Yes. From 1 to 3%. But they're state pensions. Who knows what might happen in the current political climate...
Does that mean you are not eligible for Social Security? Also, in your OP you say two pensions. Do you need to be retired to collect both?
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Old 06-20-2012, 12:52 PM   #9
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Does that mean you are not eligible for Social Security? Also, in your OP you say two pensions. Do you need to be retired to collect both?
I am eligible for reduced Social Security benefits--though that's not entirely clear yet, since all of my SS was earned in other states years before my current job--which puts the limit on SS. No, I can start collecting the first pension anytime after 60. But doing so would give me a bumped up annual income for a time. Not sure I want that or what the consequences might be for doing so.
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Old 06-20-2012, 03:37 PM   #10
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Another key question is how much do you need to live? While your pensions (ignoring any SS) would be 125% of what you make, its probably more than 125% of your take home pay (assuming you have deductions for taxes and possible savings).

I think in your situation, the key question is would you prefer to work or not?

While your net worth would obviously be more if you continue to work, will you be happier?

While I enjoyed my work as well I decided to retire because I had enough net worth and preferred to spend my time the way I wanted and any increased net worth from continuing to work would have only benefited my heirs.

It's a very personal decision though. Good luck.
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Old 06-20-2012, 03:49 PM   #11
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I'd say retire, but since you like your job, continue to work for free.
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Old 06-20-2012, 04:11 PM   #12
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We'll see what others have to say, and more info would be helpful, such as that mentioned by pb4uski. Two thoughts, though. First, even though you have a 1-3% COLA there are a few examples now of public sector pensions being frozen. Rhode Island, San Diego & San Jose are recent examples. Not yet a trend, but definitely a threat that could hurt you badly. Second, you are 7 or so years from Medicare. Health Care insurance costs are very high at this age, and access could become an issue. Each of these could derail an early retirement.
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Old 06-20-2012, 04:19 PM   #13
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Combined, the two pensions would be equal to about 125% of my current salary. Should I retire? Read on.

Would you? Not necessarily if I still enjoyed what I was doing as you mention, depending on answers to the other questions below. I don't subscribe to the categorical 'why work if you don't have to' sentiment that is (too) casually dispensed by some here.

Are there any pitfalls to retiring at 60 or 61? What would you do with your time? If you're confident you'd have no problem filling your time, like some members here (some abusively) contend, then retirement is a viable option. But some people have trouble adjusting to 'permanent vacation' after a life of working at something they enjoyed, can lead to boredom or worse. At the very least, 'what you are retiring to' may warrant some serious consideration.

Adding to the issue is that after 35+ years, I still enjoy what I do. Most people here seem/seemed to hate their jobs and they may not think to divulge that, so their answers may not apply to you.

But if I don't retire early, then the difference between my current salary and what I would have earned in retirement expands (I'm essentially maxxed out at the top of my salary line at work--not much more upside to my salary over the next few years apart from annual cost of living increases). Not clear what you mean here. I gather your salary is maxed out, would your pension benefits increase if you wait to retire, or is that maxed out too? If so, did you consider further building your portfolio/nest egg in the calc below? If it's really true that you make less by continuing work after all expenses, benefits, COL - my answers might change.

I roughly calculated that if I were to remain on the job until I'm 70, I would be losing well over $350,000 from the difference between what I now make and what I would have made in retirement. I think the answer may be a "no-brainer." If you're convinced it's a no-brainer, then it probably is...
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Old 06-20-2012, 04:31 PM   #14
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Can you retire and then get hired back as a consultant? That way you get your retirement, and you can control the type of work and amount of work you do. Is that a possiblity in your line of work?

As I mentioned in a thread I posted a few days ago, I like my career and so likely will never fully retire per se. But I am controlling what commissions and who I do work for but on my terms and so it is like the best of both worlds. Perhaps you can structure something like that yourself?
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Old 06-20-2012, 04:32 PM   #15
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Another option that many of us do/did is to work part-time for a while. Not sure if that would be an option for you or not but if you really enjoy your work it might be worth considering.

Putting retirement aside, is there a reason that you would not start dawwing on the first pension even if you are still working? Many pensions have a sweet spot after which it doesn't make a lot of sense to defer drawing. For example, my former employer pension could start anytime between 55 and 65, and the annual increases for waiting are attractive from 55-60 but pretty modest from 60-65, so I'm planning to start drawing those benefits at age 60 (and would have even if I was still w*rking).
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Old 06-20-2012, 05:47 PM   #16
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You didn't mention your retirement interests. Do you have hobbies,etc that you enjoy more than your job? If not, you may as well keep working until you find what you want to retire to
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Old 06-20-2012, 06:23 PM   #17
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How much do you like it?
Only you can determine that. Best of luck!
As Aaron says, it looks as if you've reached financial independence and can retire on your terms.

It seems as if you don't have any compelling reason to pick the terms right now, but eventually some aspect of your job will help you make a decision about how you'd like to spend your time.
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Old 06-21-2012, 02:55 AM   #18
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Combined, the two pensions would be equal to about 125% of my current salary. Should I retire?
Why ask us. You have to ask yourself it that's the life you want. I'm sure all of us will say "you can if you want".

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Are there any pitfalls to retiring at 60 or 61?
I don't know, I retired at 58.
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I still enjoy what I do.
Well, why stop doing it, or do you think you'd like retirement better? We can't help with that.
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if I don't retire early, then the difference between my current salary and what I would have earned in retirement expands
It's only a lifestyle decision and it's your life. You've already done the arithmetic. Would you rather work or do something else? Pick one.

I also think I know what 99.99999% of people on an Early Retirement forum would suggest. To be absolutely fair to yourself (since you can't decide on your own) you should post the same question at www.work-till-i-die-and-beyond.org. I think TMMV.
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Old 06-21-2012, 08:06 AM   #19
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Combined, the two pensions would be equal to about 125% of my current salary. Should I retire?
Are there any pitfalls to retiring at 60 or 61? What would you do with your time? If you're confident you'd have no problem filling your time, like some members here (some abusively) contend, then retirement is a viable option. But some people have trouble adjusting to 'permanent vacation' after a life of working at something they enjoyed, can lead to boredom or worse. At the very least, 'what you are retiring to' may warrant some serious consideration.

Adding to the issue is that after 35+ years, I still enjoy what I do. Most people here seem/seemed to hate their jobs and they may not think to divulge that, so their answers may not apply to you.

.
+1

From my perspective, this may be your biggest consideration. Develop a plan now as to how you would spend your time, and if thats appealing, do it.
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Old 06-21-2012, 09:03 AM   #20
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For those of you who offered helpful and constructive advice, many thanks!
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