Retiring early w/ pension to save my sanity!

[drumgal]

If I retire before 20-year mark, I will have to pay $30 more a month towards my premium. (I am exploring the possibility of a high deductible plan w/ NO monthly payment.) My current plan offers a subsidy towards health insurance, and my balance w/ dental would be a total of $230 a month. Is it worth it to me to wait another 10 months to save $30 a month? At this point I would say "no." Would you disagree? Thanks for your input! I'm reading everything here!

 

[drumgal]

I would have to pay $30 a month more for insurance and would take a pension cut of approx $60 dollars per month. This is a good point! Some would say, "It's only $100 a month." Others might say, WOW! That's $1200 (or so) a year!

I am considering staying until November, although it would be extremely hard, particularly after having already given my notice. I appreciate your input! Thank you!

 

[Sunset]

]If I retire before 20-year mark,[/B] I will have to pay $30 more a month towards my premium. (I am exploring the possibility of a high deductible plan w/ NO monthly payment.) My current plan offers a subsidy towards health insurance, and my balance w/ dental would be a total of $230 a month. Is it worth it to me to wait another 10 months to save $30 a month? At this point I would say "no." Would you disagree? Thanks for your input! I'm reading everything here!

It's not 10 months, you said you would quit in July, so you would only wait 4 additional months to get your 20 years.

As it stands you are currently planning to wait 6 months to get to July.

 

[FreeBear]

Drumgal,

Not sure if this was mentioned earlier, but please don't forget that your social security benefits will be greatly reduced if you start collecting before full retirement age AND if you continue working in a job earning above a certain level of income ($15720/year in 2016).

This could be an issue for you if, for example, your music earns you more than you expect in a given year, pushing you above the social security income ceiling. Once you are older than your social security retirement age, then job income doesn't impact your SS benefits. It may a good idea to discuss this impact of earned income when you speak with social security.

FB

 

[Yarnstormer]

The positive is the healthcare and a pension - what I wouldn't give for that deal!

I'm in the same position, leaving a "good job" before circumstances are perfect.

But, like so many here I advise waiting til the 20 year mark because that $100 with cola is gonna matter in 20 years.
Burn your vacation time if you have it. And honestly, if you can make it til November maybe you can ride out the holidays as well, unless that would impact your music gigs. Especially if your PTO/vacay and or fsa is awarded in January.

IF you were married for 10 years you can claim your ex husbands benefit. Even If he is no longer living you can claim a benefit as a widow. Either of these would allow you to pick which one was a better choice. For example, if he was a higher earner, you could claim your benefit at 62, then his at full retirement age. Or, you could claim his early and let yours increase until age 70. Not sure if you can claim his at 62 or if it has to be full retirement age.
Remember, You can't claim if you are married at age 60.

If I Were you I would consider this as a change in jobs. If the data entry is not what you hoped it would be, go get a retail job, work your butt off at xmas, keeping contributing to ss so hopefully it will increase your benefit. Maybe see if a local campground needs help? Campground host? Our county hires hosts in the summer. Do Something fun!
Also make an earnest effort to contribute to a roth IRA with the max allowed. You need some savings. Also you need savings for home/auto repairs so the side gigs might have to be more full time than you'd like for a while.

 

[Yarnstormer]

Is your house of a reasonable size and value for your plan? Ok to keep it unless you have some mansion that costs a bundle to heat and cool. Hopefully your payment is very low.

 

[drumgal]

November would be 10 months from now, if I wait and retire at 20 years, is what I meant!

 

[drumgal]

Thank you for your advice! You may be right about the 20 yr mark. I don't have the option to work holidays since the county closes offices, I WILL get paid for any unused vacation time when I retire. I have an appointment in a few weeks w/ SS to discuss benefits. I was married for just 10 yrs and I worked for 20 yrs in non-govt positions before my present job. Hopefully I have some SS credit! Unfortunately, it WILL be subject to WEP and will be reduced accordingly. I would LOVE to be a campground host. what a lovely idea! So far with the information I've gathered, waiting until Nov. and my 20 yr mark may be the way to go. I have already given notice to my evil boss. I can just hear her laughing and taunting if I change my mind! *sigh* Oh well!

 

[Pilot2013]

I was married for just 10 yrs !

Make sure it was AT LEAST 10 years. 9 years, 11 months and you can't claim anything from his. Of course, that's something you weren't counting on anyway.

I love that you are so willing to take the leap, just hope you make it to the other ledge! I ABSOLUTELY hate (4 days out of 5) my job as well, but unfortunately the health insurance issue keeps me working at the moment. If I were alone though (not married), I would have left already.

 

[Teacher Terry]

If your ex is dead you can collect SS at 60. My friend did that.

 

[Yarnstormer]

It would be cool if you could carry disability benefits with you. That is my #1 fear

 

[Sunset]

Drumgal,

Not sure if this was mentioned earlier, but please don't forget that your social security benefits will be greatly reduced if you start collecting before full retirement age AND if you continue working in a job earning above a certain level of income ($15720/year in 2016).

This could be an issue for you if, for example, your music earns you more than you expect in a given year, pushing you above the social security income ceiling. Once you are older than your social security retirement age, then job income doesn't impact your SS benefits. It may a good idea to discuss this impact of earned income when you speak with social security.

FB

This is Not really an issue, as the reduction in SS, it added back in and increases your SS once you reach full retirement age. You don't really lose the money, unless you die young (and then you don't miss it anyhow).

 

[drumgal]

I just did the calculator on the SS site. Thanks to WEP, my own SS is pretty lame! Still, I won't sneeze at a few hundred bucks when I'm 67-70. My ex's contribution will help. I am sending for the records just to be sure of the date. We divorced in the early 90's.

I will never marry again, on principle! Lol!

Thank you for your confidence! Still shakin' in my shoes...

 

[drumgal]

Is that so? I don't really know if he is or not...Guess I should find out!

 

[Walt34]

Thank you for your confidence! Still shakin' in my shoes...

One way to look at it is to acknowledge that someone you know is getting by on less than your income now or what it will be next year. Other than borrowing, just do what they do.

If they're borrowing, don't do that. The Piper Will Be Paid and it's usually at a bad time.

 

[Bestwifeever]

Hello! I have recently announced my retirement from a County position where I have worked almost 20 years in a public library. My last day will be the first week of July this year (2017)....

Do you have a good relationship with your boss? Have you given official notice? Can you rescind that and stay through November or into next year? I would definitely stay until hitting 20 years (actually I would probably stay til my pension wouldn't be reduced at all, but that's me). IMO $100 a month more in pension and reduced insurance premiums, if you stay longer, will matter a great deal to your budget. I'm sure you will be all right either way, but someone who spent her spare $ traveling instead of saving probably isn't going to be happy staying home all the time when there aren't extra dollars. You should sock away all the part time money toward your retirement.

The part-time data entry work you describe is something you probably will have to pay income taxes on, including full SS (employee and employer portions), etc., so it may not be a lucrative as staying put, and probably isn't going to be very interesting. The musician stuff will be lots of fun but again you should be paying taxes on that money too, plus you may have expenses getting to jobs, etc.

My unsolicited advice is to start living right now on the pension amount and save the rest. You'll get a feel for what you need to do budgetwise while you still have a higher income.

Good luck!

 

[Yarnstormer]

Your boss may seem unbearable but I bet a more solid plan will help you suffer through! Take as much of that vacation as you can if that helps.
Think how many campsites you can get for an extra $100/mo

 

[Philliefan33]

Be aware that any Social Security benefits you collect on someone else's record (such as your ex-spouse) may be reduced by the Government Pension Offset. I don't know the details of the GPO but you should look into it.

 

[Yarnstormer]

If your ex is dead you can collect SS at 60. My friend did that.

There is a reduction tho - The folks at ss can help you decide.

I think the calculator at ss assumes that you are working full time at the same salary until the age you claim - which you are not.

If I do not go back to work full time in a few years, I plan on working part time well into my 60s, claiming my late ex husbands ss at 60, and deferring mine until 70.

 

[Gumby]

Be aware that any Social Security benefits you collect on someone else's record (such as your ex-spouse) may be reduced by the Government Pension Offset. I don't know the details of the GPO but you should look into it.

The GPO reduces spousal benefits or widow benefits by 2/3 of your government pension. Here is the SSA document describing that.

https://www.ssa.gov/pubs/EN-05-10007.pdf

 

[pb4uski]

I do notice you are a little loose with facts when it seems small to you, like the debt or no debt question earlier.
The issue is these small fact are incredibly important, like WEP vs full SS.

Here is another one, November is your 20 year anniversary, less than that is 19 years, I'll bet that difference is the difference between:
Pension or No Pension, or
$1,200 per year less for the rest of your life. (30yrs * $1,200 = $36,000)

So if you are still sure to quit, then you should do it after November, or lose a lot of $$$$

All pensions in the US now vest after 5 years so no way the OP would get "No Pension".

 

[Calico]

I just did the calculator on the SS site. Thanks to WEP, my own SS is pretty lame! Still, I won't sneeze at a few hundred bucks when I'm 67-70. My ex's contribution will help. I am sending for the records just to be sure of the date. We divorced in the early 90's.

I will never marry again, on principle! Lol!

Thank you for your confidence! Still shakin' in my shoes...

I may be misunderstanding what you're saying here. As far as I'm aware, you can receive either your own SS or your ex's - not both at the same time. Are you thinking that you will get your own and also his "contribution?"

 

[Sunset]

I may be misunderstanding what you're saying here. As far as I'm aware, you can receive either your own SS or your ex's - not both at the same time. Are you thinking that you will get your own and also his "contribution?"

Right, OP can take the larger of the 2 , but NOT both...

 

[drumgal]

Good that you have the low cost insurance option. Seems the high deductible with the rollover savings is the way to go if you are healthy.

As you know, the key is do you have your budget understood fully? You know the pension income, but do you have all of your expenses known and good understanding? I agree it is a big change from the steady paycheck of working, you have it good with 75% of that paycheck still coming in. Being a county job, are you eligible for social security? If so, that is another source of income in 5 or more years out.

As long as you are accepting that some work income will be needed to supplement the pension, then have fun - assuming you know your expenses and budget requirements.

Do you have a good relationship with your boss? Have you given official notice? Can you rescind that and stay through November or into next year? I would definitely stay until hitting 20 years (actually I would probably stay til my pension wouldn't be reduced at all, but that's me). IMO $100 a month more in pension and reduced insurance premiums, if you stay longer, will matter a great deal to your budget. I'm sure you will be all right either way, but someone who spent her spare $ traveling instead of saving probably isn't going to be happy staying home all the time when there aren't extra dollars. You should sock away all the part time money toward your retirement.

The part-time data entry work you describe is something you probably will have to pay income taxes on, including full SS (employee and employer portions), etc., so it may not be a lucrative as staying put, and probably isn't going to be very interesting. The musician stuff will be lots of fun but again you should be paying taxes on that money too, plus you may have expenses getting to jobs, etc.

"My unsolicited advice is to start living right now on the pension amount and save the rest. You'll get a feel for what you need to do budgetwise while you still have a higher income.

Good luck!

"

 

[REWahoo]

"

The quote that goes on forever...