Retiring early w/ pension to save my sanity!

[Calico]

Quote:

Originally Posted by Sunset OP - I think you are going to regret this early retirement. You have stated you have no savings, and are in debt. Plus you over the past years have gone on great vacations, but from now on will NOT for the rest of your life. You don't even have enough pension to pay for your living and the house, because repairs are simply a cost of ownership, not something you take out a loan to pay, because then it means the next 3 years you have LESS money for living and house repairs, and you are on the debt treadmill with no way off. How are you going to buy a new car in 10 years ? Are you even eligible for SS, you could be short since you have not worked long from what you said. I wish you the best, but fear the worst, or at least reading a story of being homeless. Posts crossed, but 10K savings is next to nothing anyhow..

This sums up my thoughts as well. I wouldn't retire if the plan is to "take out a loan" to pay for future home repairs, a replacement car, etc.

At your age, $10,000 is nowhere near a sufficient cushion to handle the expenses which will come with home ownership, unexpected medical expenses, etc. Personally I would not be comfortable living as close to the edge as you could easily find yourself.

Best of luck to you whatever you decide.

[MichaelB]

drumgal, will you be eligible for Social Security?

[Calico]

Quote:

Originally Posted by drumgal <snip> I am buying a home (have refinanced to lower the monthly payment) and I am nearly debt free otherwise...<snip>

Quote:

Originally Posted by drumgal Wow! That's depressing, as you state it. I don't have any debt, other than a pretty low mortgage payment. <snip>

Both cannot be accurate. What does the "nearly" consist of?

I sincerely hope you are being realistic with yourself about your financial situation, and your anticipated expenses going forward.

While I agree that you can't put a price on sanity, the reality is that almost everything else in life does have a cost, and oftentimes it is these unexpected costs that crop up at the most inconvenient of times.

I am glad to read that you will be receiving social security eventually in addition to the pension.

[Sunset]

Quote:

Originally Posted by drumgal Wow! That's depressing, as you state it. I don't have any debt, other than a pretty low mortgage payment. I do have enough credits to claim SS later when I am a bit older (62?) I will get cost-of-living increases with my pension. I have never (nor will I ) buy a NEW car. I have visited many other continents and don't feel the need to travel abroad any longer...give me a tent and a National Park! (cheap...) I will have two part-time jobs when I retire. Anyway, if you knew what I go through at this present job, you'd likely quit too!

Just trying to explain how I see it. With only 10K in savings, I myself would continue working in the Salt Mines (because living in a tent when 70 really sucks), 1 more year of work will raise the Pension, get more SS (if eligible), and have 1 less year to pay retirement, and 1 more year of mortgage paid off.

When I said new car, I meant even just new to you, around here $8,000 will buy you a well used car, but those need repairs and just that would suck up most of your $10K reserve.

The Social Security could help, and you are sure you are not subject to WEP or refusal of SS due to your County job ?

Can you plan to hold off SS until at least 66.x to get the full amount ?

Your plan which I think is shaky at best, will completely explode in your face if SS refuses you, so you better be 100% sure you will get it, as some folks don't even with decades of work, or they get WEP'd which cuts the SS payment.

[Philliefan33]

It sounds like you will be living on the edge in terms of your budget. One remedy may be to look at this as a career / job change rather than retirement. You need to leave your current job to save your sanity ( many on this forum can commiserate), but do you have to stop working? Taking another job, even at lower pay, would allow you to build up your savings and bridge the gap until your income stream improves (SS).

If I were you I would get another job and save all of that income while living solely on the pension. If I was able to do that for a couple of years then I would consider full retirement. It will be easier to work a few extra years now than to try to go back to work at age 60 because your budget isn't working.

[pb4uski]

Have you run your situation through Firecalc? Firecalc will allow you to put in your pension, SS, mortgage, etc and assess your situation... since your assets are modest just leave them out... exclude the mortgage from your expenses but include it as "off-chart" spending starting when you retire but offset by a corresponding "pension" the year your mortgage is paid off (in both cases with no inflation adjustment).

An important point is that your pension grows with inflation but your mortgage payments do not and your mortgage eventually ends but your pension does not so that will provide some wiggle room but not until later.

I suspect that you will find out what you already know, that you are cutting it close and a major unexpected cost could be difficult for you to bear when you are living so close to the edge.

[drumgal]

I have a small credit card debt which will be paid off by months end, is what I meant by "nearly"! My SS is subject to WEP, but I will still get a monthly check. That much I know..My job really is TOXIC! I have worked hard all my life and took this job to help raise my son- I was a single parent. Now he's grown, and I would like to enjoy some of MY life (while I'm young enough to do so) instead of going to a job that wrenches my gut every day. This is precisely my point. Isn't happiness worth something? Can't a person live with less and still be content? one more year would only mean $100 more on my pension check. I have had to ask myself if it is worth it... believe me, I am reading all of these posts!

[drumgal]

Yes...I DO have some part-time work lined up. I was just hired to do some at-home data entry for a local company. The job/pay will expand when I retire and I can work my own hours. I also work as a musician. This was my plan precisely- to save all that money from the part-time work and live on the pension. I know it's close, hence the anxiety, but I cannot bear too much more time at this job! I know that probably only makes sense to me...*sigh*

[drumgal]

I will try Firecalc, and thank you for your input! All this helps a lot.

[MichaelB]

Quote:

Originally Posted by drumgal This is precisely my point. Isn't happiness worth something? Can't a person live with less and still be content? one more year would only mean $100 more on my pension check. I have had to ask myself if it is worth it... believe me, I am reading all of these posts!

Sure happiness is worth something. A lot, in fact, to most of us. And yes, many can get by with less.

Just to help you understand the responses you're getting, many of the members tracked their expenses carefully for years and know exactly how much they need in retirement. They also saved a great deal, to make sure they had enough to keep their current standard of living in retirement, and also deal with unexpected expenses. The responses you are getting are telling you that there is some financial risk in your plan.

As long as you are aware, no problem. You are choosing a different route. Instead of focusing on "can I do it?", you might want to try to focus this (and other) threads on "how do I make this work?"

[Another Reader]

Did you pay into Social Security at this job? If not, you will receive a much lower SS check than you would if all your employment were covered because of the pension offset. Please look at your SS to see what you would actually get. I would not even consider retiring in your shoes without a clear understanding of ALL my income sources in the future.

I retired from a local government agency and my health insurance was $300 a month. Several years later, the agency cut the retirees loose, and the pension system had to scramble to find pre-Medicare retiree insurance. My premium is close to $1,000 a month now, but is subsidized so I pay around $715. Could you absorb a big hit in the form of insurance premiums that more than double?

Run your numbers through a couple of the retirement calculators. If you are making extra now as a musician and still not saving a lot of money, my guess is using realistic expenses as well as income will not give you a satisfactory result.

[drumgal]

I will be eligible, but subject to WEP...

[euro]

I don't know your entire situation of course, but contrary to other responders, I don't think you are in THAT bad of a shape. Since you work at a library, I assume that you are probably not pulling in six figures from your current job, and your expenses are already in line with that. Therefore, your $7200-9600 from your new data entry job may fill a pretty good portion of the 25% that you give up by quitting and taking the pension. How much do you expect to bring in from your gigs? Between that, the pension, and the data entry job, how close do you come to your current cashflow?
Definitely talk to the SS administration about how much SS you can expect at 62 and at FRA.

[drumgal]

Thank you! That helps a lot...I'm trying not to get too discouraged!

[Sunset]

Quote:

Originally Posted by drumgal I have a small credit card debt which will be paid off by months end, is what I meant by "nearly"! My SS is subject to WEP, but I will still get a monthly check. That much I know..My job really is TOXIC! I have worked hard all my life and took this job to help raise my son- I was a single parent. Now he's grown, and I would like to enjoy some of MY life (while I'm young enough to do so) instead of going to a job that wrenches my gut every day. This is precisely my point. Isn't happiness worth something? Can't a person live with less and still be content? one more year would only mean $100 more on my pension check. I have had to ask myself if it is worth it... believe me, I am reading all of these posts!

Happy to hear you are smart enough to solicit folks opinion for consideration. Everyone wants to enjoy life, nobody likes a job that is horrible.
Yes happiness is wonderful, but you can't eat it.
Maybe you are focusing on the wrong parts of your job, and focusing on other aspects could make it better. Maybe you could transfer to another job within the County ?

I have a friend who quit a $100K per yr job (yes imagine that income!) as she felt she didn't need to work. Well now 15 yrs later she is asking me advice on how to get a job that pays more than minimum wage, because life got more expensive than she thought it would..

That WEP thing is important, it can in fact be a real killer. I know as I'm subject to WEP, and everybody's situation is different due to a lot of factors, but for example my SS is expected to be reduced by 1/2 of my other Pension. You number will be different but imagine taking that amount off your SS.

I would phone and make an appt with SS, and go in to see SS and find out exactly what it will be, as honestly this is pretty crucial to your survival.

When you say your Pension would go up $100 is that $100/month or $100/year ?

[drumgal]

Yes...I live pretty cheap! I don't make a ton of money now. The gig money has gone towards remodeling. I'm a DIY all the way! Sometimes the music pay is good, sometimes not so! This is why I took the data entry job. However, I will be able to take more music work when retired. Thank you for the advice. I need to make some more calculations!

[Walt34]

Just to explore options - how important is it to own the house? And your profile says you live in Reno, NV - is that a low cost of living area? If not, would you be willing to move to a lower COL location?

Selling the house and renting an apartment, or moving to a rented or purchased park trailer type home, might greatly improve your cash and COL positions. Purchasing gives you some inflation protections other than utilities, taxes, etc. since your housing costs are fixed. I would think repairs/maintenance would be cheaper, but perhaps more frequent.

A park trailer looks similar to a mobile home but is intended to be moved only once, to it's permanent location.

[rodi]

It is very normal to feel stress and anxiety when making a major financial shift like this. Lord knows I was a nervous bundle of anxiety about walking away from a good paying job that I had grown to hate...

The way I handled the stress is that I focused sharply on watching my spending the first year or so. I don't have a pension (well... I do... but it's less than $500/month and didn't start till 2 years after I retired.) So savings and a small rental income stream were it... Boy was I nervous.

What I found was that I found more ways to enjoy cooking at home, especially finding ways to make healthy, inexpensive food. I found free activities that I absolutely love - like walking my dog at the beach every morning - FREE! And I became a power user of the library. (Something you're probably already a real expert at!)

After a few years of being hyper vigilant about my spending I'm starting to feel a bit more relaxed... and have NO regrets about leaving work. I'm sure you'll feel the same way.

[Another Reader]

Quote:

Originally Posted by drumgal I have a small credit card debt which will be paid off by months end, is what I meant by "nearly"! My SS is subject to WEP, but I will still get a monthly check. That much I know..My job really is TOXIC! I have worked hard all my life and took this job to help raise my son- I was a single parent. Now he's grown, and I would like to enjoy some of MY life (while I'm young enough to do so) instead of going to a job that wrenches my gut every day. This is precisely my point. Isn't happiness worth something? Can't a person live with less and still be content? one more year would only mean $100 more on my pension check. I have had to ask myself if it is worth it... believe me, I am reading all of these posts!

The $100 per month is nice, but if you can cut your expenses and contribute to an IRA and/or the 457 (b) plan plus work three or four more years, you will be in much better shape. If you can't save on what you are making now, I don't think you can afford to retire on 75 percent of that plus whatever you net from your data entry job. Too much risk of failure.

[drumgal]

I have transferred within my department 7 times over the years. I am grandfathered in because I do not have a degree, only years of experience. Library positions now require an MLS or equivalent. Little college leave me ineligible for most county positions. I DO have some part-time work lined up after I retire. I have an appointment with SS. If I work another year at this job my pension will only go up $100 a month.