Keep on working?
- Thread starter FunGoals
- Start date
Really need more information to have any thoughts on that question.
It would depend on how much money one currently had, how much their pension would be without the extra $300 and how much is needed per month for living expenses.
Also depends on how badly you want out of your job.
I would think in most cases the extra $300 would not be a factor.
It would depend on how much money one currently had, how much their pension would be without the extra $300 and how much is needed per month for living expenses.
Also depends on how badly you want out of your job.
I would think in most cases the extra $300 would not be a factor.
E
EngrGal
Guest
I agree with the comments made by the other posters.
Additionally, you typically accrue/earn more pension money for EVERY year you work. With this in mind, you can always increase your pension the longer you work. Following this logic, you could keep working until you die (thus having accrued the largest pension benefit).
The real issue is, you need to figure out how much money you need to live on (= A) Then do another calculation to figure out where the 'sweet spot' is in your pension payout (= B).
You have reached Financial Independence when you have accrued A (which can be a combination of savings, SS, and pension).
If A is less than B, then you are 'sitting pretty' and can decide how much additional time (life energy) it will take to get to B. Once you know this, you can decide if it is worth it to you to work that extra time.
(As a way of explanation, crunch the numbers for your pension payout leaving at ages 48 thru 65 or 70. Then set up a spreadsheet that calculates what the total pension payout would be if you die at whatever you are using as your 'expiration date'.
I set up a spreadsheet with age of death at 95, and calculated how much TOTAL pension I would receve retiring at 55, 56, 57,.... 70. Then I plotted these values.
Many pension benefits start with an upward slope that then levels off at a certain point.
In my case the sweet spot is at age 58, with a point at age 61 & 62 when the added increment to my pension actually goes negative.
I have reached FI, now I need to decide if it is worth it to me to work until age 58 to get hit the 'sweet spot' of my pension payout.)
EngrGal
Hubby and I just went thru this since he is retiring in a few months. (I'm already retired with a slightly higher pension than him)
He would much rather spend less than work a few more years in order to increase his pension. Actually working longer would, in our case, be for health insurance rather than pension increase.
His pension is based on his three highest years (2001, 2002, 2003) so he is technically maxed out on his pension. (he worked tons of overtime those yrs by choice) In 2004 he worked very little overtime which, in essence, will be very close to what his pension will be.
Since we are both young (53 & 50) and extremely healthy we could always work part-time if we feel the need.
We reached FI a few years back but continued working in order to save, invest, pay college bills for sons, and buy a few toys for both of us. We've thought this out fairly well and will have to see what the future holds.
And I'm actually anxious for him to retire. Should be a fun ride.
He would much rather spend less than work a few more years in order to increase his pension. Actually working longer would, in our case, be for health insurance rather than pension increase.
His pension is based on his three highest years (2001, 2002, 2003) so he is technically maxed out on his pension. (he worked tons of overtime those yrs by choice) In 2004 he worked very little overtime which, in essence, will be very close to what his pension will be.
Since we are both young (53 & 50) and extremely healthy we could always work part-time if we feel the need.
We reached FI a few years back but continued working in order to save, invest, pay college bills for sons, and buy a few toys for both of us. We've thought this out fairly well and will have to see what the future holds.
And I'm actually anxious for him to retire. Should be a fun ride.
I was surprised that Suze did not go into more detail as she usually does.
SuzeCam was on the streets of NY. A couple from CA who were both teachers asked the question. One person wanted to retire. The other wanted them to continue working for 3 more years in order to increase their pension by $300.
Suze's answer to continue working focused on the $300 every month for the rest of their lives.
SuzeCam was on the streets of NY. A couple from CA who were both teachers asked the question. One person wanted to retire. The other wanted them to continue working for 3 more years in order to increase their pension by $300.
Suze's answer to continue working focused on the $300 every month for the rest of their lives.
J
John Galt
Guest
Suze Orman is the female Bob Brinker. BTW, I still
turn him on if I am in the car. I think my record is about
10 minutes. He either gets weird or his callers are brain dead. Not sure why I keep turning it on. I don't need
any further evidence of rampant cluelessness.
JG
turn him on if I am in the car. I think my record is about
10 minutes. He either gets weird or his callers are brain dead. Not sure why I keep turning it on. I don't need
any further evidence of rampant cluelessness.
JG
BigMoneyJim
Thinks s/he gets paid by the post
As always, the answer would be a lot easier if only we knew when we will die.
Other than that, if I thought I could retire now or work three more years to get an extra $300/mo for life it's a no-brainer. I'd retire immediately.
Other than that, if I thought I could retire now or work three more years to get an extra $300/mo for life it's a no-brainer. I'd retire immediately.
When I retired almost 2 years there was the realization that proactively managing money would be a key to success. Of great concern was the 401k money which was at risk in mutual funds. I discovered that there were 3 financial channels on tv. Which was whittled down to Suze Orman & cnnfn. I have learned a lot & definitely avoided a lot of mistakes. I especially enjoyed the " Your Money " show on cnnfn & watching the market reaction after a fed rate change can be hilarious. There will be another change on Wednesday. Cnnfn is now off the air & I am happy because I spent too much time watching. I am very happy that I had the opportunity to learn from the channel. I still watch Suze occasionally & can usually predict her answer. IMHO she usually has good advice which is why I did not think that working three more years for only $300 more a month was a good answer. She also said that contributions to 40lk's, ira's, employee stock etc increase also.
There are a lot of decisions to be made when retiring. If someone wants to retire & there isn't debt or there is manageable debt & expected income during retirement is greater than expenses when is a good time to retire? Every month worked increases benefits.
There are a lot of decisions to be made when retiring. If someone wants to retire & there isn't debt or there is manageable debt & expected income during retirement is greater than expenses when is a good time to retire? Every month worked increases benefits.
Advice on how to manage your money, or your relationships? Seems to me she's always discussing the later despite her utter lack of qualifications to do so.
Best financial advice from her.... pre-pay your PMI! Roll your PMI into your home loan! Cripes, that's bad. Sorry, I often yell at the TV when she's on.
It depends on the person. If they like to work, great. If not, then now is a good time. If they have the means to do so, no sense telling people to stay if they don't want to.
I agree that she can go overboard trying to find a relationship angle & it can be unnerving. I change the channel sometimes also. Relationships do play a part in financial problems sometimes. It is the main reason for divorce & in some cases massive credit card debt.
I 100% agree with that, but rather than say "seek counseling by a qualified expert (ie: not Suze)", she will attempt to dispense her sage advice, frequently saying "girlfriend, you need to dump his ass" or some variant thereof. Perhaps she wants everyone in this world to be as successful in their romantic lives as she has been in hers.
J
John Galt
Guest
Bob and I are just friends.
