Par34
Confused about dryer sheets
Hi, I am a 51 SWF who am planning to retire at age 56. I earn ~$150k/yr. I will have a government pension of ~$4300/month ($52K/yr), retiree health insurance etc. I currently have ~$800K in my 401k and estimate it to be worth at least $900K at age 56. So I should have available ~$88k /yr to live on at age 56 if I assume a 4% withdrawal rate. I estimate my living expenses will be $48K/yr. Therefore I am satisfied with my current situation.
So what's the problem. I have been approached by people that I know, who would like for me to join them working in the private sector. I think this would make me happier in addition to being satisfied. But I would still like to FIRE at 56 unless the new job makes me really, really happy and fulfilled. I am trying to calculate what salary / benefits in the new job would make this at least a break even financial scenario.
By leaving the government now, I can defer my pension until age 56 but it would be reduced and I would lose retire health benefits. So what do I lose in benefits?
As a very rough first pass, I calculated what it would cost to purchase retire health care from age 56 to 65 as: 10 years * $800 / month *12 = $96,000.
My pension would go from the $52k/yr mentioned above to ~$42k/yr. So If I would assume a 30 yr life expectancy from age 56, based upon family history, this would cost me ~$300k/yr over my lifetime.
So between healthcare and the reduced pension, I would need to "makeup" $396k in the 4.5 years that I plan on working to make the new job financially equivalent. So a new salary of $150k + $396k /4 or $238k /yr would "makeup" this difference. My plan is if this new job can provide this salary (which it might) to sharpen my pencil and look at the higher tax implications in those 4 .5 years and the value of having the extra money earned in those 4.5 years invested.
Has anyone else faced a similar opportunity? Since this is a new and evolving situation I am looking for advice, items I'm not considering, and support in general.
Thanks!
So what's the problem. I have been approached by people that I know, who would like for me to join them working in the private sector. I think this would make me happier in addition to being satisfied. But I would still like to FIRE at 56 unless the new job makes me really, really happy and fulfilled. I am trying to calculate what salary / benefits in the new job would make this at least a break even financial scenario.
By leaving the government now, I can defer my pension until age 56 but it would be reduced and I would lose retire health benefits. So what do I lose in benefits?
As a very rough first pass, I calculated what it would cost to purchase retire health care from age 56 to 65 as: 10 years * $800 / month *12 = $96,000.
My pension would go from the $52k/yr mentioned above to ~$42k/yr. So If I would assume a 30 yr life expectancy from age 56, based upon family history, this would cost me ~$300k/yr over my lifetime.
So between healthcare and the reduced pension, I would need to "makeup" $396k in the 4.5 years that I plan on working to make the new job financially equivalent. So a new salary of $150k + $396k /4 or $238k /yr would "makeup" this difference. My plan is if this new job can provide this salary (which it might) to sharpen my pencil and look at the higher tax implications in those 4 .5 years and the value of having the extra money earned in those 4.5 years invested.
Has anyone else faced a similar opportunity? Since this is a new and evolving situation I am looking for advice, items I'm not considering, and support in general.
Thanks!