The longer I work, the higher the pension - what did others do about OMY temptation?

[daylatedollarshort]

You could try immediateannuities.com to get the current value of a $500 a month life joint annuity. Making some guesses about your state and spouses age, I was quoted around $120K.

Would you want to work longer for your current salary + $120K? It depends on part your current NW and how much you hate your job if that extra money is worth it to you.

 

[daylatedollarshort]

And while I admire Jacob at ERE, I doubt many of us would want to live as cheaply as he does. Find your own comfort level.

I thought he took a full time job as a quant?

 

[38Chevy454]

With a projected 2% withdrawal rate this is even a question? Unless your spending drastically increases you are plenty safe.

I would trade more time and better health for a little less money. Especially since you already have enough money. If you don't spend it, your inheritance recipients will.

 

[jollystomper]

Part of the reason I chose OMY and pushed out my target retirement a year was due to pension growth. After this year the rate of its growth tapers down, and another 13 years of will increase it to an additional 13K yearly above what I will get next year. So it doesn't make sense in my view to keep working for diminishing returns.

The more tempting part of OMY is that I like my job and the workload has actually gone down... there are a number of folks under my 2nd line manager who are FI and eligible to retire, and I think it now scares them enough to subtly come up with ways to keep us around.

 

[Cobra9777]

I had always planned to retire at 55, when my megacorp DB pension had a significant bump up in value. That age also entitled me to keep restricted stock and unvested options. I pulled the trigger at 52 and never felt bad about giving up that extra money. My boss thought I was nuts. But I have enough money. The job had become increasingly stressful and uninteresting. And most important, I was tired of not having enough time to do the things I enjoy in life. Easy decision. My advice to OP: Forget the extra money. You've already won. Start thinking about "real life" after work.

 

[Gotadimple]

One needs to ask two questions:

Do I have enough today to retire?
No, keep working
Who am I earning the money for?
If you have enough to retire, why do you need the extra amount? Who will benefit?

-- Rita

 

[Andre1969]

I've run a few scenarios, and I'm at the point where, for the most part, working an extra year gets my safe withdrawal rate boosted by about $5,000. There are a few points though, where it takes two years, mainly because I look for a 95% success rate, and in some of the scenarios, it may come in at 92-94%, so it's close.

Anyway, I could retire now, at 44, and have a good chance of making it on $40K per year. If I wait until 58, I have a good chance of making it on $100K per year. I don't have a problem right now, giving up a year for another $5K, as I'm still fairly young, and, well, $45K represents a pretty big jump over $40K, percentage wise. But, by the time I'm 55, waiting until 56 will bump it from $80 to $85K. That's only a 6.25% boost, versus 12.5%. Plus, unless I'm ramping up my lifestyle with each passing year, I have a feeling that the extra time is going to be worth more than the extra money long before I get to that point. Right now, I think I'm going to hit that point around the age of 50, where I should be able to do $60k per year with a good chance of success.

Of course, I'll keep re-running the numbers as I get closer to that date. And, as that date approaches the numbers should be more realistic, as I'll be running shorter Firecalc cycles, so there will be more data to pull from.

 

[kcowan]

There have been studies that show that every year you work past 55 costs you more than a year of retirement.

Sample discussion

(I was a CEO when I retired and I thought I was enjoying it, But it turns out that it was enjoyable compared to not being CEO. But it was stressful even though I dealt with it easily.)

 

[Animorph]

You could try immediateannuities.com to get the current value of a $500 a month life joint annuity. Making some guesses about your state and spouses age, I was quoted around $120K.

Would you want to work longer for your current salary + $120K? It depends on part your current NW and how much you hate your job if that extra money is worth it to you.

$120k minus one year of pension payments foregone.

 

[kcowan]

Anecdote:

I retired from Megacorp at age 49 on a DB pension that started immediately.

Only 2 of my peers worked until age 65. They both died within 2 years of retirement.

 

[travelover]

Anecdote:

I retired from Megacorp at age 49 on a DB pension that started immediately.

Only 2 of my peers worked until age 65. They both died within 2 years of retirement.

Oh sure, but I bet they were pulling in a nice monthly pension check when they checked out.

 

[2B]

Anecdote:

I retired from Megacorp at age 49 on a DB pension that started immediately.

Only 2 of my peers worked until age 65. They both died within 2 years of retirement.

The vast majority work because they believe they need the money. Sometimes it's because they "deserved" that BMW. Sometimes (like me) they don't realize they are FI and could retire until megacorp throws them out. The sad truth is that the typical person retires when their health forces them to retire. This forum is filled with "deviants."

I became a OMYer when I began considering retiring while in an easy but poorly paid position at NASA. I had just discovered this forum and ran FireCalc until I felt very comfortable. I had my mind made up to go when DW's parents went into a health spiral where my "retirement" would have made us home health workers for her parents for the duration. The duration worked out to be about 6 years. Early in that period I moved to a very well paying postion that is also very easy with no stress. When FIL finally died, we moved to our retirement home that is about an hour from my office. The only negatives are the drive and being totally free to do whatever I want. That was 2 1/2 years ago. I then planned for an August 2013 retirement but there was a lot of work to get done. I didn't want to leave in the middle of a big project I was on (a mistake). I thought I'd leave when it was over but then I saw the tax hit if I left in the middle of this year. I'm now on what I consider my second OMY. Prior to that I was avoiding the alternative.

On the plus side, I have more money than I can ever spend without reliving "Brewster's Million."

 

[pb4uski]

+1. You will never get that year back.

Not only that, it is a year that you will likely be healthier and more active.

And if you "have enough" already, then the principal beneficiary will be your heirs unless you consciously splurge with the additional pension money.

 

[travelover]

...........This forum is filled with "deviants.".........

I can attest to that.

 

[Andre1969]

I had my mind made up to go when DW's parents went into a health spiral where my "retirement" would have made us home health workers for her parents for the duration. The duration worked out to be about 6 years.

I'm in a bit of a similar situation, and have to admit I feel a bit guilty about it. My grandmother, at the age of 90, is really getting old and feeble. We had to put her in the emergency room a week ago, because she was really out of it, and couldn't walk or even sit up. She's at a rehab place now, and slowly getting better.

My uncle lives with her, but he's not in the best health, himself. Goes to dialysis 3 times per week. He's 62, but not really a "healthy" 62. If I was to retire right now, I know I'd be on call almost 24/7, and it would make me miserable. I don't mind helping out with taking them to doctor's appointments and such, making sure Grandmom takes her pills at breakfast time on the days my uncle is at dialysis, and so on. But if I was on call all the time, I know I'd end up feeling trapped.

Also, I live right across the street from them, so I don't think I'd be able to retire on the downlow. Unless I made sure to leave the house all the time. Or at least, hide the car! So, for the time being at least, I figure I might as well keep w*rking. it's an easy, low-stress job for the most part, close to home, and they're flexible with my hours. In fact, if Grandmom does come back home and needs more regular surveillance, I could get away with taking off on Tuesday and Thursday mornings to watch her while my uncle is in dialysis. But I just fear that once I do retire, then I'll start getting all the "Well you don't have anything to do, you can help out..." sort of requests almost non-stop.

 

[2B]

I'm in a bit of a similar situation, and have to admit I feel a bit guilty about it. My grandmother, at the age of 90, is really getting old and feeble. We had to put her in the emergency room a week ago, because she was really out of it, and couldn't walk or even sit up. She's at a rehab place now, and slowly getting better.

My uncle lives with her, but he's not in the best health, himself. Goes to dialysis 3 times per week. He's 62, but not really a "healthy" 62. If I was to retire right now, I know I'd be on call almost 24/7, and it would make me miserable. I don't mind helping out with taking them to doctor's appointments and such, making sure Grandmom takes her pills at breakfast time on the days my uncle is at dialysis, and so on. But if I was on call all the time, I know I'd end up feeling trapped.

Also, I live right across the street from them, so I don't think I'd be able to retire on the downlow. Unless I made sure to leave the house all the time. Or at least, hide the car! So, for the time being at least, I figure I might as well keep w*rking. it's an easy, low-stress job for the most part, close to home, and they're flexible with my hours. In fact, if Grandmom does come back home and needs more regular surveillance, I could get away with taking off on Tuesday and Thursday mornings to watch her while my uncle is in dialysis. But I just fear that once I do retire, then I'll start getting all the "Well you don't have anything to do, you can help out..." sort of requests almost non-stop.

My in-laws had the assets available for assisted living and nursing care. Realistically, once anyone needs nursing care you are not doing them any favors by taking care of them unless they want a less comfortable life and an earlier death.

Assisted living is another story. When someone needs to make sure they've taken their meds and provide ongoing assistance with daily living, someone has to take over or you're just waiting for the inevitable disaster. We moved FIL into a decent assisted living facility that was easily affordable where he stayed for a couple of years before he needed memory care (Alzheimer's) and then skilled nursing. That sort of care was not anything I was willing to do and definitely not for the nominal 6 years it took him to finally pass away.

My SIL thought we should take over for FIL. She, of course, was too busy and lived out-of-state but she saw us as the perfect caregivers.

It sounds like you have a temporary patch with your uncle but it sounds like it will be a race to see which one falls apart first. I suggest you get proactive about looking for a place for both of them. Get other siblings involved. Go for a durable power of attorney and living wills. I'm assuming these things aren't in place now. Don't go into an elder care situation without having the paperwork clean. You could find yourself in court to get permission for everything either one needs. Houston is famous for its careful protection of the infirmed until the lawyers have drained all of the assets from an estate. After that, anyone can take over without supervision.

 

[daylatedollarshort]

$120k minus one year of pension payments foregone.

Right, good point.

When I add up our pensions, lower SS and income taxes, ACA subsidies, college financial aid we now qualify for the kids, tax credits we now qualify for, job and commute costs, DH's portion of hobby job income he can do part-time from home, and expenses reductions we could implement with DH home, we actually came out ahead with him not working a full time megacorp job.

We were late to the ER game so we had a lot of superfluous expenses we were able to cut and not miss with DH home. We had time to go over every line item in the budget. DH learned to cook, do the taxes, go around with a kill a watt, we now just get gas at Costco with a 2% cash back card, etc.

Added up that all actually saved us more money than having him work another year or two. Every $10K we cut off our annual expenses was $500K we didn't need to fund over a 50 year retirement. We'd not been careful with our expenses before in part due to a lack of time, so the cost cutting on stuff we did not miss like getting rid of the landline, raising insurance deductibles, cooking more from scratch, eating less carry out other expenses along those lines was huge for us. We made a list of a few hundred little things like that we could do to save on recurring expenses and just knock off a few each week. It has been several years and we still aren't done with the list!

 

[old woman]

I liked having worked past when I could have retired. I had enough in 2008 then didn't have enough so kept working. No pension so just life savings to count on. The last few years allowed me to collect much more money from work plus have more money from investments. 2013 my mom died leaving me 110K and my investments grew 153K so over quarter of a million on top of my over funded retirement. I retired in January, got another 60K from mom's estate and my investments have grown 65K ytd. So now I have over twice as much as I thought I needed, markets can fall 50% or more and I won't worry at all. I also reached 65 to get Medicare and 66 to collect SS on my late ex's record so don't have those worries. I could have retired at 60 or maybe less but waited until almost 66. The last few years at work were easy my boss wanted me to stay and knew I could leave so I got huge raises and bonuses and nobody told me what to do. My last boss asked me if there was anything that she could say to get me to stay and I said no, I am tired of putting on shoes to come to work. Today I still haven't put on shoes, I like retirement but not sorry I waited.

 

[growing_older]

Quote:
Originally Posted by bikeknit
And while I admire Jacob at ERE, I doubt many of us would want to live as cheaply as he does. Find your own comfort level.

I thought he took a full time job as a quant?

Yes, he is employed full-time. Although to be fair, even when ERE was his exclusive focus it was a "retirement" combined with building an internet audience.

 

[clifp]

Your life expectancy at 58 is 23 years according the SS administration.
Figure out how much more money you'll earn on the higher pension vs getting the lower pension for an extra year or so. Divide that amount by 24 years life expectancy. Or if you want to trivialize it by how many starbucks or movie tickets per day etc.

But it also depends on how much your job really sucks.. If it is truly bad than it is a no brainier, if you are ambivalent,then maybe you should stick around, cause I am sure you kids would appreciate the extra money.