Marty-
I might be answering my own question but, I'm curious how your pension take home pay is higher than your working take home pay.
Is it due to not having to:
- Save for ER
- Pay SS taxes
- Pay taxes in a higher bracket
I am currently maxing my TSP @ $22,500 a year. That stops when I retire, but unfortunately I will only see just a little higher take-home than while I'm working. My gross salary is only $63k per year, net currently is $27,500. If I retire in Jan '13, my net pay, is calculated to be approx. $28,500. Wife's income is less, at just $23k gross, $14,500 net. She currently contributes 25% to her 401k, but when I retire, we'll try to get closer to her max allowable. It'll be tight, but if we can tough it out for 3 yrs till she's 55, it will be worth the effort. I should mention that on this net income, we currently maintain 2 separate apartments due to my job being located 125 miles away. We still manage to eat out too much and have 2 newer vehicles which are paid off.
So the answer to your question would be your first guess above, Save for ER.
I don't pay into SS, because I'm a fed employee under CSRS. That means I'll get almost no SS when I turn 62, due to WEP. Wife does pay SS.
Note: I could substantially increase my pension by working 4 or 5 more years after retirement eligible, but because I will receive a military retirement starting at age 60, and due to the fact that we get by ok on our present income, although not extravagantly, I feel confident we can make it until the 2nd pension kicks in. I will be able to withdraw from my TSP a reasonable amount that will be a SWR starting anytime after Jan '13 (and after I retire), and in 3 yrs, wife's 401k will also be available if needed. Wife will begin SS at 62.
So basically, we'll be looking at $28500 (my pension) + $6000 TSP net SWR) = $34,500
+ $6000 net SWR from wife's 401k begining in 2016) = $40,500
+ $10,000 net from my military reserves starting in 2018 = $50,000
All the above is net income and could vary some but is probably very close. Both my pensions include deductions for survivor's benefits for my wife, life & health insurance, and all expected taxes.
I will get a small (approx. $250) SS payment @ 62 in 2020
Wife will get SS @ age 62 in 2023, but that's so far off, we don't think about it.
The only variable in the above would be if I decided to work longer, past January 2013.