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Would you pull the plug (on work)...
Old 02-14-2013, 02:38 PM   #1
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Would you pull the plug (on work)...

Long story short...got about:

•900k in retirement accts
•150k outside retirement
•3k/mo in ss and pensions starting 12 yrs from now
•own house w no debt (own everything actually...cars, tennis racquets, wine collection, etc)
•own 1/4 of another house that is paid for and has a tenant (worth 110k)
&bullW recently went semi retired - 2 days a week (25k/yr)
•we spend approx 40k/yr
•firecalc says we are FI (and yes, I did donate

The one thing is....if I work 2.5 more year, I'll get a pension of 1k/mo for life after turning 60 (9.5 years from now). But mentally, I'm done.

So would you experienced ER peeps pull the plug now, work 2.5 more years, or change jobs to something less stressful, OR (this is what I want to do) take a year off and then decide?

Can't wait to see what you guys come up with...
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Old 02-14-2013, 03:06 PM   #2
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That's a tough call. I'm a similar age (I'm 51), and my assets are roughly similar (a little higher, but the same general ballpark, but our estimated retirement budget is higher.)

Like you Firecalc says I'm good... but I'm in the one -four more year mode... Hoping for severance. One time severance isn't as good as a $12k/year pension...

$12k/year income starting at age 60 is nice. Nothing to sneeze at.
- Is it' COLAd at all?
- If you don't stay the extra 2.5 years do you get anything... in other words, is it all or nothing?
- Is there a lump sum option now?

If I knew I could get a pension in 2.5 years... and no chance of getting it if I quite now... I'd probably hang in for it.

If you could take a year off - could you go back to your job and reclaim the pension? If that's the case - that's my choice.
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Old 02-14-2013, 03:23 PM   #3
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Rodi- you are in a high cost area of the country...you could move to a small college town in the southeast and be retired right now! As an example, my prop tax is 900 a year.

The 12k is cola'd. The deal is I could take a year off but would need to complete 2.5 more years some time in the next 7 years. If I quit and never come back, I would get approx 30k.

There are a lot of reasons to stay...I wouldn't come back to my old job....too stressful, but with my background I would be useful in a lot of different depts. I just wonder if I would ever want to return to work if I took a year off.
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Old 02-14-2013, 03:34 PM   #4
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I think only you can answer this based on your tolerance level for staying. For me, I left long term position that I was burned out on, went into consulting. After being away from what drove me nuts, I could never return. The consulting fizzled, and I'm glad. So I would think long and hard about taking a sabbatical that you think you may have to return to work from. Once sprung from the trap, you may find it unbearable to return. I stuck out my last two years to make a significant pension milestone. But we're all different. Good luck.
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Old 02-14-2013, 04:08 PM   #5
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This is a tough one. The COLA'd $1K a month is significant and financially worth waiting around for. Many people have stuck it out waiting for such a pension. If you left now, you would get a lump sum of $30K, but that's only 2.5 years' worth of the pension. As already discussed, I agree that it would be really difficult to go back after a sabbatical.

I think, on balance, that if I were in your situation I would try to stick it out for the 2.5 years, but I would do everything I could to make life more bearable, both at work and outside it. I wouldn't accept any overtime or volunteer for new projects. I would feel free to shut my office door, ignore ridiculous requests, take every possible day of vacation, and turn off the smartphone at home. (whatever applies in your situation). I would also increase the time devoted to activities that I enjoy and time with family. And i would start a countdown clock, but not until 1 year out, because 2.5 years is too long to watch time crawl by.
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Old 02-14-2013, 04:26 PM   #6
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A quick run of ORP and it spits out $67K in annual spending for your situation. If you are only spending $40K, I don't think giving up another 2.5 years is worth it. Besides, given the current status of pensions, you'll probably be worried sick thinking about them taking it away.
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Old 02-14-2013, 04:29 PM   #7
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Quote:
Originally Posted by ikubak View Post
Long story short...got about:

900k in retirement accts
150k outside retirement
3k/mo in ss and pensions starting 12 yrs from now
own house w no debt (own everything actually...cars, tennis racquets, wine collection, etc)
own 1/4 of another house that is paid for and has a tenant (worth 110k)
lW recently went semi retired - 2 days a week (25k/yr)
we spend approx 40k/yr
firecalc says we are FI (and yes, I did donate

The one thing is....if I work 2.5 more year, I'll get a pension of 1k/mo for life after turning 60 (9.5 years from now). But mentally, I'm done.

So would you experienced ER peeps pull the plug now, work 2.5 more years, or change jobs to something less stressful, OR (this is what I want to do) take a year off and then decide?

Can't wait to see what you guys come up with...
So, you estimate your budget to be $40K. Beginning in 12 years you get around $36K in pensions (including SS). You have $900K in retirement accounts, to support you for the 12 years, and then compliment the pension income. You also have a nice emergency fund.

My question is: what can go wrong if you retire now, and how does working an additional 2.5 years address that? Seems to me like your big risk is losing all of your retirement fund. Losing 1/3 you are still in good financial shape.

How much of your $3K monthly pension is not SS, and is that part COLA'd? Also, does your $40K budget include taxes?

2 1/2 more years is such a long time.
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Old 02-14-2013, 04:35 PM   #8
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Does your 40k in expenses include taxes and health care ? My projected health care budget in retirement is 28k (for 2).
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Old 02-14-2013, 04:44 PM   #9
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Originally Posted by ikubak View Post
Rodi- you are in a high cost area of the country...you could move to a small college town in the southeast and be retired right now! As an example, my prop tax is 900 a year.

The 12k is cola'd. The deal is I could take a year off but would need to complete 2.5 more years some time in the next 7 years. If I quit and never come back, I would get approx 30k.

There are a lot of reasons to stay...I wouldn't come back to my old job....too stressful, but with my background I would be useful in a lot of different depts. I just wonder if I would ever want to return to work if I took a year off.
Our prop tax is 3x that - but lower than our newer neighbors due to prop 13...
(Would be about the same as you but we built a granny flat for the in-laws on our lot - and that tripled our prop tax. The good news it's a source of rental income going forward - and rents are high here. cha-ching... that's about $12k NET/year for us.)

Our house is almost paid for - that's my big hold out on pulling the plug. We're paying about $25k/year in extra principal so cashflow will be lower in retirement. Due to be paid for next year.
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Old 02-14-2013, 04:45 PM   #10
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To answer a couple of questions....my budget does include taxes and health care. 1/3 of the 3k/month is not SS and is cola'd.

Working 2 1/2 years more would definitely add to our security....ss and pensions would be more than we (plan to) spend. Maybe we could just "live it up" more but I have plenty of fun just playing tennis, biking, camping, gardening, etc. I don't get a lot more enjoyment from spending more money....and 2 1/2 y e a r s ....it seems so long.
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Old 02-14-2013, 05:07 PM   #11
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You'd need $300,000 invested to pull $12,000 a year using the 4% rule. So that argues for working the extra 2.5 years.

On the other hand if you really hate it, it might kill ya, then all the money in the world won't matter.

And it sure is easier to add years of retirement to the front end than the back end.
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Old 02-14-2013, 05:19 PM   #12
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Quote:
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To answer a couple of questions....my budget does include taxes and health care. 1/3 of the 3k/month is not SS and is cola'd.

Working 2 1/2 years more would definitely add to our security....ss and pensions would be more than we (plan to) spend.
Having more than you need does not make your plan more secure if you already have enough.

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Maybe we could just "live it up" more but I have plenty of fun just playing tennis, biking, camping, gardening, etc. I don't get a lot more enjoyment from spending more money....
This would be a good reason to work more - to live it up more. If the working isn't worth the living, you already know the answer.

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and 2 1/2 y e a r s ....it seems so long.
+1
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Old 02-14-2013, 05:29 PM   #13
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You are asking what I would do, not what I think you should do, so I would continue working the extra 2 1/2 years. It would never occur to me to walk away prematurely and leave so much money on the table.

On the other hand, I've never had a job I've really hated. I've generally been able to think of a lot of things I'd rather be doing instead of working, but I've never really minded the work per se. You sound extremely negative towards your job, so I'm sure it's a much closer call for you than it would be for me.

As is always the case with these personal decisions, your spouse's and your opinions matter far more than those of anonymous strangers. It certainly sounds to me as if you are ready to retire and don't really need outside advice. What does your spouse think? It's not really right to make such a fundamental decision at such a young age unless you are both comfortable that you're doing the right thing.
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Old 02-14-2013, 05:43 PM   #14
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I have a very stressful job. A large part of my job is investigations and in some cases it leads to people being terminated and at times I have to testify and justify my conclusions. It takes a toll on me. I guess some people handle it better than I do, but I know it stresses me out.

DW and I have discussed this at length and find benefits for working 2.5 more years and for stopping now. I think the best option is to transfer to another dept and do something less stressful.
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Old 02-14-2013, 05:52 PM   #15
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I think the best option is to transfer to another dept and do something less stressful.
Sounds like a great plan!
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Old 02-14-2013, 05:54 PM   #16
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Definitely an individual response based on individual needs and circumstances. I left 10k a year on the table, by not sticking it out 2 more years. It was a simple math question to me, as I wanted to retire. The 10k was really only $6900 for me as there was no way around the taxes. The extra $575 or so a month wasn't meaningful to me because I have about 30% leftover cushion anyways. The extra money wasn't going to make me rich nor was it going to change my lifestyle, so I retired. I have worked PT for 15 hours a week for 3 years, but in a different stress free job to transition and add to my cushion a bit.
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Old 02-14-2013, 06:39 PM   #17
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Quote:
Originally Posted by ikubak View Post
Long story short...got about:

•900k in retirement accts
•150k outside retirement
•3k/mo in ss and pensions starting 12 yrs from now
•own house w no debt (own everything actually...cars, tennis racquets, wine collection, etc)
•own 1/4 of another house that is paid for and has a tenant (worth 110k)
&bullW recently went semi retired - 2 days a week (25k/yr)
•we spend approx 40k/yr
•firecalc says we are FI (and yes, I did donate

The one thing is....if I work 2.5 more year, I'll get a pension of 1k/mo for life after turning 60 (9.5 years from now). But mentally, I'm done.

So would you experienced ER peeps pull the plug now, work 2.5 more years, or change jobs to something less stressful, OR (this is what I want to do) take a year off and then decide?

Can't wait to see what you guys come up with...
Are you big on spending? Are you a shopper? Are materialistic?

Or, on the other hand, are you pretty laid back? Are you not so much into shopping? Are you not materialistic? (By that I mean anything that is unnecessary and you like the latest this, the latest that. Whatever specific consumer goods.)

If you're managing in a way where you got your spending pretty controlled, you have all that money, and your property is paid off ... what more you could do is simplify by streamlining (if you want).

Is the extra income very important to you? If it is ... go the extra time and then become retired. If it's not, that extra time isn't going to make enough difference. Most people would kill to have what you've earned and saved.

There is this question not enough of us ask ourselves. It's a spin on Barbara Walters's old, "What do you think you will be doing 10 years from now?" It's one people don't want to ask themselves. Especially when they 're senior age (for discounts). "Do you think you will still be alive 10 years from now?" And I'm not joking. My mother died at age 62.
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Old 02-14-2013, 09:14 PM   #18
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DW and I have discussed this at length and find benefits for working 2.5 more years and for stopping now. I think the best option is to transfer to another dept and do something less stressful.
I'd go with the transfer first... Plan B can be to retire early if the transfer doesn't work out.
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Old 02-15-2013, 12:29 AM   #19
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I agree with what Meadbh is saying. As usual. :-)
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I think, on balance, that if I were in your situation I would try to stick it out for the 2.5 years, but I would do everything I could to make life more bearable, both at work and outside it.
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Old 02-15-2013, 09:12 AM   #20
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Your WR is less than 4% and you only need to go 12 years before it drops to almost nothing.

That doesn't even account for:

-Your wife is working at 25k/year.

-You have an additional 110k equity in a rental house

I think you are fine to pull the plug.
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