DW needs advice

[Ronstar]

DW could retire now with a pension and health care at 58. Or she could work another year to max out the pension at $4k more per year than it is now.

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

 

[W2R]

It's such a personal decision. I can't really tell her what to do.

But if it was me - - - would I have worked an extra year for $4K/year, if I was already FI? Nope, no way, not for all the tea in China. In fact, I retired on the first day I had retiree medical, even though my pension was reduced due to being 61.5 instead of 62 years old. I don't regret it a bit either.

 

[Original Wally]

Ronstar - that is an age old question. You presented it as only one more year. What can happen is that, a year from now, you (or she) end up asking.... should I stay one MORE year? And so on. That actually happend to a fella where I used to w*rk. Around 1990 "Bob" - who had been w*rking since 1959 (31 years) was down to "this quarter or next" and it always turned out to be ... "one more quarter". Until the day he had a massive coronary at work. Retired that day, heart transplant as soon as possible, and a way different retirement than he had planned.

Remember, one more year working is one less year retired. Out of "how many"? Who know. But it absolutely is one less.

 

[Katsmeow]

I am currently 58. I semi-retired 2 1/2 years ago. I don't have a pension. But, I calculate that between the part time work that I did last year and the part time work I will do this year it will equate to us having about another $4k a year from then on. I guess I must feel it is worth it since I'm doing it.

As time goes on, I do think more about whether it is worth it and for how long. Things that I consider. How onerous is the work and how much do I want that extra money.

For us - the extra money would be nice but would provide extras not essentials. But those extras would be nice to have. However, I do have the benefit that only work 1 or 2 days a week, the work I'm doing is the parts of my job that always liked (the semi-retire part of it all means I get to pick and choose the type of work I want to do). As I continue on, my BS tolerance is very low. That is, at this point, any significant annoyance would cause me to quit. So far - that hasn't happened and so I keep on. However, I am pretty much willing to quit at any minute if things were to change....

What I don't know in your wife's situation is how need (or desire) for the money balances out versus whatever is onerous about working....

 

[Mulligan]

Yep, I agree with above, it's a personal decision. Is the money necessary for your retirement dreams and goals or just extra padding to be stuffed in the vault? My experience was this. At year 25, I could retire with pension, but the math didn't work for me to retire and have any extra money at all. I went three more years, as 28 provided me the cover I needed. If I had went two more years it would have added about 10k more before taxes to my pension, but I had reached the point that the money wasn't worth it. Simply had enough of being "the boss" and wasn't going to hang around and do a poor job just for the money.
I am 10 years younger and value each hour of free time I get. At 58, I am sure I would hold them even more precious. But that is of course how important the $4k is to enjoying my retirement years.

 

[Aiming_4_55]

- Does DW enjoy her work? If the work is not bad with alot of social benefits, it might be worth staying.

- Do you have any plans that she can not participate in because of work? Some long term employees have extensive vacation/sick/personal/comp time banks. I've known people to take every Friday and Monday off for 6 months, so time can fly along with several week long vacations.

How much surplus do you have now in your budget? With belt and suspenders, the $4k might not mean anything, however donating extra to charities each year might have alot of meaning.

Does she have something to retire to or will she be home more bored than actively enjoying something? It's the emotional side of being ready to retire. To me, that's the important wild card.

Disclaimer - I'm 43, working, but FI with young kids. I've reduced my work stress and enjoy what I do, so I'm planning for extras for myself/DW and kids in my future ER. YMMV. Good luck.

 

[karluk]

DW could retire now with a pension and health care at 58. Or she could work another year to max out the pension at $4k more per year than it is now.

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

Perhaps I'm risking excommunication from this early retirement forum for saying so, but to me the decision to stay the extra year would be easy. The way you present it, it's not a case of falling into "just one more year" syndrome, but working a strictly limited time towards a more secure retirement, with a significantly enhanced standard of living waiting at the other end. I gather that once she "maxes out" her pension in a year, there would be little or no increase in the future. If so, she would be passing up perhaps $4k per year over a 30 or 40 year retirement in addition to her regular salary for the extra year of work - easily a six figure amount that's available this year only, not in future years. Even working the extra year leaves her at a youthful 59. That may not be a particularly young retirement age for the members of this forum, but this is hardly a representative sample of the general population. I would walk away, but only after getting the most out of my career, and maxing out my pension certainly qualifies as a goal worth achieving.

 

[BTravlin]

DW could retire now with a pension and health care at 58. Or she could work another year to max out the pension at $4k more per year than it is now.

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

If I could retire now and do so very comfortably, then no. If I could retire now but the finances are a little tight, then yes, I'd work the extra year to pad my accounts.

 

[UserRequested]

If I could retire now and do so very comfortably then, no. If I could retire now but the finances are a little tight then, yes, I'd work the extra year to pad my accounts.

Agree 100%. Retirement is no fun if you have to stress about finances. On the other hand, if you already have a large enough padding to live in comfort, then why work.

RE's I think are a special lot. I'm sure most could have continued to work to build more wealth. At some point in their lives they decided to stop postponing happiness and started living the dream.

 

[traineeinvestor]

If I could retire now and do so very comfortably, then no. If I could retire now but the finances are a little tight, then yes, I'd work the extra year to pad my accounts.

Another +1

If the $4K pa is the difference between sleeping at night and worrying about which brand of ramen will be on special next year, then stay the extra year.

If the $4k is largely irrelevant to your future finances then pass - why give up a year of your life for something that isn't meaningful?

 

[bbbamI]

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

If we needed the money...yes.

If we didn't need the money, but DH was still working...probably.

If we didn't need the money and DH was retired...no.

 

[Bestwifeever]

I think deciding when to retire and change your life is hard and maybe the fact that she's wondering if she should delay it for a nice little financial payoff means she is not ready?

 

[Alan]

At 55, each additional year I worked would add ~$4k/yr to my pension, plus another $60k into the savings pot. However, we were comfortably FI, and getting to 55 had secured retiree HI, so there was no way I would have worked another year.

However, it is a very individual decision. Good luck to her in her choice, whatever it may be.

 

[Running_Man]

DW could retire now with a pension and health care at 58. Or she could work another year to max out the pension at $4k more per year than it is now.

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

YES

 

[Ronstar]

Thanks everyone! I shared your thoughts with DW. Some yes's, more no's. She appreciates your comments, and is still undecided.

I told her that we have expenses covered if she decides to retire now, and that she can keep the extra $4k as more of her spending money if she decides to continue working. My guess is that she wants to get as much $ from megacorp, and she's willing to stay on one more year to do so. She enjoys her job most of the time.

She says that the extra year would be easy since I would be doing all of the housework. I don't remember this being part of the deal.

 

[obgyn65]

To answer your question, 'no' at this stage in my life.

She wants to know- Would you work (or have worked) another year for an extra $4k per year for life?

 

[MichaelB]

She says that the extra year would be easy since I would be doing all of the housework. I don't remember this being part of the deal.

 

[Walt34]

She says that the extra year would be easy since I would be doing all of the housework. I don't remember this being part of the deal.

That does change the equation, at least for her. Presumably she will share at least some of that $4k/year with you.

BTW, this issue is the reason I'm still working so I guess it makes it worthwhile to me. But it's a low-stress job, short commute, easy-going boss, etc. so no real reason to bail ASAP. Change any of those factors and I'm done though.

 

[Tree-dweller]

she wants to get as much $ from megacorp, and she's willing to stay on one more year to do so. She enjoys her job most of the time.

We too have just met with DW's HR rep to run the numbers, and she's leaning towards another year with the job she (mostly) likes. She reports that just knowing that she has the option/luxury of saying "see ya" between now and then makes the occasional work-related slings and arrows that much easier to brush off.

She says that the extra year would be easy since I would be doing all of the housework. I don't remember this being part of the deal.

I too, as I am retired a year, am among the "house-b*tch" brethren, and have absolutely no problem with that. I figure it's only fair, as DW had been doing most of it while also working full-time prior to my retirement. (And now I get to set things up the way I like it.)

However you two choose, I wish you the best!

 

[palomalou]

How much of that 4K would you see after taxes?

 

[gerrym51]

the answer is retire now

 

[Tyro]

My guess is that she wants to get as much $ from megacorp, and she's willing to stay on one more year to do so. She enjoys her job most of the time.

Your guess‽ I think that's a converstion worth having now rather than finding out wrong assumptions were made a year (or more) ago, followed by possible regrets. But that's just my opinion -- YMMV.

She says that the extra year would be easy since I would be doing all of the housework. I don't remember this being part of the deal.

What -- you didn't read the fine print? Better do so -- there's probably more!

Tyro

 

[FANOFJESUS]

Tough question I have worked jobs where one year was no problem and I have worked jobs where every day was a problem.

 

[Texas Proud]

I think the one thing that I have not seen put down is what is that worth

IOW, a 59YO female would have to pay $73K to get an annuity that paid $333 per month for life...

So, add this $73K to DW's salary and then make a decision on if that compensation is worth working....


The downside is if that $4K increase is every year... IOW, if she worked 2 more years would her benefit be $8K per year If so, at some time she should retire and start collecting...

OH, almost forgot to ask... would she qualify for her full pension the day she stopped working If so, then she falls like my sister did. My sister was a teacher... she qualified for 95% pension the day she retired... I told her that she was only working for that 5% as she already qualifed for that 95% with no work... she decided to retire since they were also going to take away the spousal SS pmts at the time...

 

[Ronstar]

good observation on the 4k being worth a 73k annuity. She does qualify for her max pension the day she retires - if she waits until a year from her next anniversary date. But they have some job sharing /training coming up that may not sit well with DW and that may be enough for her to pull the plug