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Retiring early at 60, in Feb 2018
Old 05-18-2017, 08:36 AM   #1
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Retiring early at 60, in Feb 2018

Hello, all! I hope to have some good conversations here!

I'm lucky enough to have started in a state government job 30 years ago, with a decent pension plan that had a "rule of 90" option I wouldn't have had if I'd started six months later, because the rule of 90 option was ended the year I began employment. Rule of 90 meaning, full pension for those whose combined age and years of service add up to 90. I'll hit that mark in February 2018. I feel very fortunate and excited!

I also will be eligible for a Social Security survivor's benefit, allowing me to draw a modest benefit from my dear late wife's SS account beginning at age 60, allowing me to postpone drawing my own, larger SS benefits until I reach full SS eligibility at age 66 1/2.

So, that means I should receive $3,750/month combined pension/SS benefits beginning in February, with a bump to $4,857/month when I turn 66 1/2 (adjusted for inflation.)

I also have about $170K saved up and my house is paid off. Plus I'm getting re-married shortly after I retire, which will bring our expenses down.

I'll have to pay almost $700/month in health insurance premiums to continue with the job-based health insurance I have now. That's a lot of money but with my savings I ought to be able to keep up with it. That premium will drop to about $300/month once I hit 65 and become Medicare-eligible.
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Old 05-18-2017, 10:14 AM   #2
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Welcome. Sounds like you have a viable plan. You have less savings than many here would feel comfortable with, but you have a nice pension.
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Old 05-18-2017, 10:50 AM   #3
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Welcome! Are you sure those expenses will go down with marriage? :^)
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Old 05-18-2017, 10:59 AM   #4
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Welcome! If you haven't found them already, we have a helpful list of things to think about as you prepare to retire:

Some Important Questions to Answer

Some very common suggestions around here are to carefully track your spending leading up to retirement, to run calculators such as FIREcalc (link at the bottom of each page here), and to plan ahead for occasional large expenses (such as new roof, replacement vehicle, etc.)

Congratulations on your upcoming marriage and retirement - a lot of change in a short time can be stressful so take care of yourself!
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Old 05-18-2017, 11:38 AM   #5
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Thanks, all! LRDave, fair question! But once we're maintaining one household rather than two that ought to save us both quite a bit. And neither of us are big spenders. We've been living in her house while getting mine (the paid-off one) ready to move in.

And yes, travelover, I wouldn't be able to pull this off without the pension I'm lucky enough to have.
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Old 05-18-2017, 01:16 PM   #6
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Originally Posted by travelover View Post
Welcome. Sounds like you have a viable plan. You have less savings than many here would feel comfortable with, but you have a nice pension.
The pension plus SS technically equates to a $1.125M nest egg (assuming 4% WR), and it grows to $1.45M at age 65. That along with a paid off house is pretty reasonable, especially since he's not retiring "extremely" early. And I'd imagine the new wife is bringing something to the table, even if it's just a monthly SS check. OP, confirm?

Of course, I'm a hypocrite saying all that, because I wouldn't retire on $1.45M...
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Old 05-18-2017, 01:43 PM   #7
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The pension plus SS technically equates to a $1.125M nest egg (assuming 4% WR), and it grows to $1.45M at age 65. That along with a paid off house is pretty reasonable, especially since he's not retiring "extremely" early. And I'd imagine the new wife is bringing something to the table, even if it's just a monthly SS check. OP, confirm?
Yep, that's what I figure. And my needs are pretty simple.
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Old 05-18-2017, 01:46 PM   #8
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Originally Posted by jriemerm View Post
Hello, all! I hope to have some good conversations here!

I'm lucky enough to have started in a state government job 30 years ago, with a decent pension plan that had a "rule of 90" option I wouldn't have had if I'd started six months later, because the rule of 90 option was ended the year I began employment. Rule of 90 meaning, full pension for those whose combined age and years of service add up to 90. I'll hit that mark in February 2018. I feel very fortunate and excited!

I also will be eligible for a Social Security survivor's benefit, allowing me to draw a modest benefit from my dear late wife's SS account beginning at age 60, allowing me to postpone drawing my own, larger SS benefits until I reach full SS eligibility at age 66 1/2.

So, that means I should receive $3,750/month combined pension/SS benefits beginning in February, with a bump to $4,857/month when I turn 66 1/2 (adjusted for inflation.)

I also have about $170K saved up and my house is paid off. Plus I'm getting re-married shortly after I retire, which will bring our expenses down.

I'll have to pay almost $700/month in health insurance premiums to continue with the job-based health insurance I have now. That's a lot of money but with my savings I ought to be able to keep up with it. That premium will drop to about $300/month once I hit 65 and become Medicare-eligible.
I'm in a very similar situation. Two careers, the 2nd being in State Govt. I'm planning to semi-retire in March 2018 and will need to fund my own health for 32 months. My health is funded 100% at age 60. Fortunately, my wife works at a hospital and I can piggy back on her plan for $320 per month.

Anyway, I project having 750k - 775K when I stop working and $32K pension a year beginning in 2021. We also have a paid off house and no poor spending habits.

I'm comparing my scenario to yours and if it were me - I'd view the 170K as a 4% withdrawal rate (which is $6,800 a year) + 45,000 yr. (pension)= $51,800 less taxes less health insurance less living expenses.

Conservatively, $51,800 - 7,700 taxes - 8,400 Health Insurance = $35,700.

Essentially, your net monthly income would be around $3,000 per month. Not bad, if you do not have expensive hobbies or vices.

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Old 05-18-2017, 02:00 PM   #9
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I'm comparing my scenario to yours and if it were me - I'd view the 170K as a 4% withdrawal rate (which is $6,800 a year) + 45,000 yr. (pension)= $51,800 less taxes less health insurance less living expenses.

Conservatively, $51,800 - 7,700 taxes - 8,400 Health Insurance = $35,700.

Essentially, your net monthly income would be around $3,000 per month. Not bad, if you do not have expensive hobbies or vices.
I can get by on that. Also, about $20K of the savings is in a tax-free health care savings account, which can cover premiums with tax-free money for the first couple of years.

If I needed to I could draw from the savings at a higher rate than 4%, given that I'm going to get an $1,100 monthly bump in social security when I hit age 66.5. But if I don't need to, I won't.
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Old 05-18-2017, 02:03 PM   #10
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As others have mentioned your wife will be bringing in income also and maybe some savings. There are a few of us on here that have decent pensions that make up a majority of our retirement $.
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Old 05-18-2017, 02:37 PM   #11
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As others have mentioned your wife will be bringing in income also and maybe some savings. There are a few of us on here that have decent pensions that make up a majority of our retirement $.
Yes, she actually makes a better living than me, and has substantially more savings, but doesn't have the pension. I definitely prefer the pension, not having to think about the possibility of outliving my savings.
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Old 05-18-2017, 06:39 PM   #12
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Good luck with your upcoming retirement & marriage.

If you remarry, will you still be able to to draw survivor benefits as a widower?
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Old 05-18-2017, 06:43 PM   #13
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Good luck with your upcoming retirement & marriage.

If you remarry, will you still be able to to draw survivor benefits as a widower?
As long as I don't remarry before the age of 60. After that there is no problem.
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Old 05-18-2017, 07:09 PM   #14
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I also will be eligible for a Social Security survivor's benefit, allowing me to draw a modest benefit from my dear late wife's SS account beginning at age 60, allowing me to postpone drawing my own, larger SS benefits until I reach full SS eligibility at age 66 1/2.
Congratulations! I retired at 61 using this scenario, however I am opting not to take my own SS until I turn 70. The bump up in value is worth waiting the extra four years for.
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Old 05-18-2017, 07:21 PM   #15
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Congratulations! I retired at 61 using this scenario, however I am opting not to take my own SS until I turn 70. The bump up in value is worth waiting the extra four years for.
Yep, that's something I'm thinking about, too. On the other hand, in my case it's an $1100 bump at age 66, for four fairly young years when those extra dollars might come in handy for travel and such.
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