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Voluntary early retirement offered!!!
Old 11-08-2011, 07:23 PM   #1
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Voluntary early retirement offered!!!

Hello all. Seems like a good deal for my husband. He's a federal worker, 54 years old with 28 years of service. Unlike myself, he's been living for the day he can quit work. Lo and behold, a RIF is happening! Voluntary early retirement is being offered with no MRA. It includes immediate full annuity (and annuity supplement until soc sec begins at 62). There are also rumors of lump sum buy outs in addition to this. In 1 year I will collect a military pension, drop the health care insurance from my job, and go from fulltime to casual hours (I love my career). We will then sign up for tricare. We have no debt, own our home. Retirement savings of approx 600K between us, 110K liquid savings. We live frugal but rich lives. Monthly expenses should almost be covered by the pensions alone. If we want/need more $$ should we dip into the retirement funds or start soc sec at 62? Am I missing anything important here? Any opinions, suggestions appreciated. P.S. I dont really understand how to use firecalc. Thanks for the great forum.
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Old 11-08-2011, 09:24 PM   #2
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Looks good to me, Infoseeker. Congrats on the opportunity!
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Old 11-08-2011, 11:07 PM   #3
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Old 11-08-2011, 11:13 PM   #4
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Nice! Nothing like some incentives to sweeten the decision.
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Old 11-09-2011, 05:34 AM   #5
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You show that it is always good to be prepared.
Imaging this offer for someone who has just refinanced the house to the roof to pay off credit card debt...
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Old 11-09-2011, 06:59 AM   #6
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Originally Posted by infoseeker View Post
Hello all. Seems like a good deal for my husband. He's a federal worker, 54 years old with 28 years of service. Unlike myself, he's been living for the day he can quit work. Lo and behold, a RIF is happening! Voluntary early retirement is being offered with no MRA. It includes immediate full annuity (and annuity supplement until soc sec begins at 62). There are also rumors of lump sum buy outs in addition to this. In 1 year I will collect a military pension, drop the health care insurance from my job, and go from fulltime to casual hours (I love my career). We will then sign up for tricare. We have no debt, own our home. Retirement savings of approx 600K between us, 110K liquid savings. We live frugal but rich lives. Monthly expenses should almost be covered by the pensions alone. If we want/need more $$ should we dip into the retirement funds or start soc sec at 62? Am I missing anything important here? Any opinions, suggestions appreciated. P.S. I dont really understand how to use firecalc. Thanks for the great forum.
Hi infoseeker, welcome to the forum. Do monthly pensions and annuities have COLA adjustments? Do pensions + annuities + SS exceed budget + taxes?
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Old 11-09-2011, 10:08 AM   #7
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Hey that's great! The govt actually gave your husband 2 years of added life! That's the way I look at that.

I have a feeling in the upcoming years there will not be incentives like that since the govt is beginning to belt tighten. I feel sorry for any new employees coming on board...the retirement system will be much different.
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Old 11-12-2011, 01:18 AM   #8
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Congrats! On taking SS at 62 vs. using savings, I've seen 10 "experts" give 10 different opinions on it. However, my view is to delay the SS...it grows by a substantial amount for every year you don't take it. There are some technical "tricks" you can utilize such as file and suspend or synergizing benefits with spouse, etc....but they depend on a myriad of factors, so would need to know lots of specifics...suggest you make an appointment at your local SS office and talk to them about some of these.

Good luck, hope it works out!
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Old 11-12-2011, 07:24 PM   #9
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Welcome to the forum. It's a nice situation to be in.

Delay SS if you can, but depends on alot of factors, i.e. health, roth vs TIRA/401k funds, kids, etc.
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Old 11-12-2011, 07:32 PM   #10
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Take the offer! I was 51 when I went out with 34 years and got a two year buyout. I always planned to go at 55 but that two year lump sum buyout was the clincher. I just couldn't see myself working two more years for nothing. I've never been sorry and your assests look good.
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Old 11-12-2011, 09:43 PM   #11
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My dad took an early our from the post office. His deal wasn't as good as yours. His buddy decided to wait. His kids moved back in (all three of them), a couple with spouses. He ended up working a dozen more years to pay for it all.

Retire while you can. If you don't you're kids moving back in might be the best thing that happens. At least he didn't pass away and never get to retire.

As far as budget is concerned, budgets can be trimmed. Sounds like you have a good thing, but if retirement is a goal, trimming the budget is as good (or better) than saving more dollars. Good luck!
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Old 11-13-2011, 04:56 PM   #12
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I was already FI at 55, but hadn't really considered retiring. Just stuck in the rut, I guess. At that time, the company I w*rked for was bought out, and the rumors of a big layoff were running rampant. It suddenly occurred to me that this was the push I needed. Over the next few weeks, I gradually cleared out my cube, and waited for the big day.

When it came, my division head was almost in tears that she had to let me go, and I had the biggest grin you ever saw. She didn't know quite how to deal with that, and I just spent the rest of the day trying to make everyone feel as good as possible.

In the ten years since then, I've been totally happy with my retirement. I stay just a little bit active doing consulting in the micro and regional brewing industry (nothing to do with my former j*bs), and I earn just a few thousand a year (all of which goes into an individual 401k), so I treat it as a hobby that pays for itself.

Like so many others have said, once you retire, you will seriously wonder how you ever had the time to go to w*rk.

As to Firecalc, just read the information on the Firecalc home page carefully. Then start playing with it.
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Old 11-13-2011, 05:08 PM   #13
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If we want/need more $$ should we dip into the retirement funds or start soc sec at 62? Am I missing anything important here?
Good work.

You don't really need to dip into the retirement funds in the sense of drawing down your assets. Just invest them sensibly (something like Vanguard Wellesley or Wellington come to mind) and take out part of the monthly dividend periodically to meet your additional cash needs. Even if you withdrew 3% of the total initial investment of $600K, you'd generate an extra $1500 a month and your investment would likely grow despite those withdrawals, if history is any guide.
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Old 11-13-2011, 08:51 PM   #14
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Hi infoseeker - I retired from the fed. govt. in Jan. of 2010, also at age 54, like your husband. I was also offered a VERA (voluntary early retirement), and I took it without hesitation. I did not get a buyout. Almost 2 years later, I have absolutely no regrets - it was one of the best decisions I ever made. The last 2 years have been absolutely wonderful.......maybe the best years of my life (so far). Our financial situation is not nearly as good as yours is, but we are still doing fine. My wife and I are both good at controlling expenses and saving $$ for our priority items (like a trip south for part of each winter to get out of the cold), so we've had no problems with finances. My health has improved also, as I'm getting a lot more exercise, and we are eating healthier than ever (more time to garden and cook healthy meals from scratch).

Best of luck to you and your husband!

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Old 11-14-2011, 11:16 AM   #15
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Congtats!
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