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Old 08-03-2015, 11:34 AM   #41
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TXRNR, I agree with Spudd... it doesn't sound right. If you left at 53 for another job they would force you to start collecting your pension? Never heard of such a thing.

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Old 08-03-2015, 11:41 AM   #42
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Our city pension plan allowed retirement at age 50, however, there was a formula, years employed, age, salary, etc. I was ready to go at 50 but would have had only 50% pension. It was a difficult five years but in that time I was promoted to a manager and added quite a bit to the formula so I left with 70% and paid health. I'm happy I did, even though working was very difficult as management had become insufferable.

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Old 08-04-2015, 06:43 PM   #43
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I approached this subject with MegaCompany's Human Resources one time. I was ready to go at 30 years and 52 years old. They said that government regulations wouldn't let individuals retire until age 55, no matter if they'd put their time in.

In 2008, MegaCompany overreacted and offered generous retirement packages to those 55 years of age--including a pension supplement until age 62 when SS could startup. And providing retiree insurance cost them a fortune.

My best friend was a real manager at UPS when it was owned by one family and UPS management as a private company. After UPS went public, his stock was worth $ millions. They worked him to death until they allowed his retirement at age 55.

I think that The King wants his subjects to continue working and paying into Social Security, 401K's, IRA's and other salary holdbacks--at least until age 55. He doesn't want to shell out money to any of his subjects until he has to. Those working pay taxes and taxes pay his treasury's expenses.
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Old 08-04-2015, 06:53 PM   #44
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Retiring at say 53 but waiting until 55 to take the "Early Retirement" payment is something that could be done however the penalties are so significant (As published in the DB plan) that it is almost impossible. There is a statement that references situations such as layoffs, etc. where a bridge may be provided. This is where the thread began, looking for anyone who had experience working through the "gray area".
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Old 08-04-2015, 07:26 PM   #45
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My "grey area" had some similarities. Like the OP the pension I would get through my Megacorp would be drastically reduced if I left voluntarily before age 55. If, however, I was laid off any time after age 49 I could retire at 55 without incurring this penalty. This was often referred to as the "6 year bridge to retirement".

I considered retiring at 50 several years ago, modeled everything and saved the data. If I had quit voluntarily then and started collecting my pension at 55 my monthly payment would have been little over $1K/month, whereas if I commenced the pension on the same date and left the the company on the same date as the result of a layoff my monthly payment would have been almost $1800. Big difference.

Through various machinations I have managed to stay at the company through my 55th birthday so the layoff effect on my pension is now moot, but this was very much a consideration over the last few years. Basically I felt that a voluntary ER was out of the question, but whenever a layoff seemed possible it represented a legitimate "offramp". For various reasons I OMY'd my way past these various offramps and am substantially richer, but commensurately older, sicker and "tireder" as a result. In retrospect it's sometimes hard to tell if I made the right call, though in fairness, I like the people I work with - including my management - so my "BS Bucket" (as another poster aptly termed it) has been much less full than most. Had that not been the case I suspect I would have more actively pursued potential layoff options.
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Old 08-05-2015, 06:12 PM   #46
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Gray Area

I can definitely relate to OP's situation. I retired at 52 and immediately started collecting the pension annuity, which was 41% less than it would have been at "early retirement" age 55. Not quite as harsh as OP's plan, but still a pretty steep haircut. Waiting to collect at a later date was an option, but IIRC, it made no difference in the PV of the pension benefit I had earned; it was just a TVM/actuarial adjustment.

During my 25 years at Megacorp, we had many periods of layoffs, which were always preceded by early retirement offers. These offers typically included a "bridge to early retirement" for people over 50. No such opportunity for me. I had a discussion with HR as well as our pension administrator to see if I could be bridged, as an exception. Their response was no. Under the terms of the plan, such bridges had to be offered to everyone or no one. No exceptions. The business outlook was fairly rosy at the time, so waiting was unlikely to change anything. I even inquired about going on leave-of-absence, rather than terminating, to bridge the gap, but that was not allowed either.

I actually pressed the HR person on this point because, as a manager, I was well aware of some exceptional cases where we offered severance packages to certain people that were being driven out, usually for performance reasons. These packages often included an LOA bridge to early retirement. I was told that such cases had to be approved by the CEO and my high performance ranking and voluntary departure would exclude any such possibility. Seems a bit backward but that's the response I got. Dead-end.

For me, the pension was by-far the biggest hit. But I also forfeited some unvested stock options and all RSUs, most of which I would have retained at "early retirement" age. There were also some smaller issues related to post-retirement health insurance subsidies, and others. I knew all these impacts quite well when I made the decision. But for me, the job had reached a point of stress and dissatisfaction where continuing was not really an option.

More importantly, while that extra money certainly would have been "nice," it was not needed for FIRE. It would have just gone to my kids... and probably a lot sooner, after 3 more years of stress took its toll on my health. I guess I was fortunate that DW also has a pension, which is larger than mine, and we also have rentals and other financial assets that will easily support our spending and lifestyle. Still, that was a really tough decision, especially the pension part. But once I knew I was FI, that extra money meant nothing compared to 3 extra years of freedom in my early 50s.
Retired at 52 in July 2013. On to better things...

AA: 45% stock, 35% bonds, 15% real estate, 5% cash
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Old 08-06-2015, 01:57 PM   #47
Confused about dryer sheets
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Thanks much for the response. My situation sounds very similar to what you experienced with the exception that I really need the 55 early retirment pension components or at least reasonably close in order to reach FIRE.
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Old 08-06-2015, 02:59 PM   #48
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well, anecdotally at least, this thread shows how great DB plans are for employee retention

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