I lack the proper mind-set for ER!! HELP!!

[Rob]

Hi all-
I wrote you all a couple months ago. I am a 58 yo teacher currently in Asia. I am having tremendous difficulty "embracing" my decision to quit teaching full time. I have already signed a contract for one more school year (2005-06), but I am debating about whether I should shoot for one more after that!!!! I have this part of me that is greedy and wants to accumulate more funds, and therefore, a more comfortable retirement. However, I am at a point where the stress of long days, the stress of dealing with "spoiled" kids that somehow expect their success in school to be the teacher's responsibility, and the stress of putting up with the banter and politics inherent in any organization is overwhelming me. Having a mind-set where I fully embrace ONE MORE YEAR as my last is what I am desiring. Have any of you had the same doubting experiences as I have?
The pension plan I am with (TIAA-CREF) allows its members to live off the annuity interest after the age of 55. I am 58 That interest income for me would be about $29,800/year in August 2006. I can opt to use my full pension plan anytime I want, but the longer I wait, the more I get. If I received my full pension in August 2006, I'd get $46,700 per year, but that amount would increase 3% a year. If I waited until August 2007, I'd start at $50,000/year, increasing 3% a year.
I would love to take up Tai Chi, or meditation or some form of relaxation exercise. I'd love to choose certain times of the day to tutor science or teach English as a Seconds Language here. I'd love to wake up later and enjoy the mornings instead of worrying about getting to school early. However, I am worried about money, about being comfortable. I have no kids and no wife.
If any of you tell me I'm being absolutely ridiculous and should embrace retirement in a year, GREAT. I need some advice, since I hesitate to let this indecisiveness show at my school. I am at wits end. If I embraced a decision, the next year would go by better. My fear, though, is if the next year goes by better, then i'll want to stay one more year. I go around and around thinking like this. Help!!!!!

Rob

 

[unclemick]

Rob

Lighten up and hum - in all probability your budget is less than what you could draw if you pulled the pin yesterday.

So - if you have the FI part knocked - your work is a hobby. Relax - you will 'know' when the time comes.

Meanwhile - enjoy your new hobby.

 

[REWahoo]

Rob,

I am also 58. Last year my brother died and my best friend died. This weekend one of my high school friends suffered a stroke and is paralyzed and in intensive care. You may have been more fortunate and not experienced anything like this, but I promise you if you did it would wipe away all your doubts once and for all.

Get out while you can. A few more dollars are not worth it.

REW

 

[Mr._johngalt]

REW.............you got it right brother.

JG

 

[BUM]

Rob,

You're in the wrong forum if you expect anyone here to say, "suck it up and get back to work". Aint gonna happen boyfriend.

Regardless, your post uses the S word (stress) too often. Its obvious you've had it. Your casserole is done and you didn't hear the bell ring. Stress in your 20's - 40's keeps you sharp. After that it kills you. The greedy part - read paycheck - is worse. Its more like drug addiction... and ER is your 12 step program. Need a sponsor?

BUM

 

[nfs]

I have this part of me that is greedy and wants to accumulate more funds, and therefore, a more comfortable retirement. However, I am at a point where the stress of long days, the stress of dealing with "spoiled" kids that somehow expect their success in school to be the teacher's responsibility, and the stress of putting up with the banter and politics inherent in any organization is overwhelming me. ... The pension plan I am with (TIAA-CREF) allows its members to live off the annuity interest after the age of 55. I am 58 That interest income for me would be about $29,800/year in August 2006. I can opt to use my full pension plan anytime I want, but the longer I wait, the more I get. If I received my full pension in August 2006, I'd get $46,700 per year, but that amount would increase 3% a year. If I waited until August 2007, I'd start at $50,000/year, increasing 3% a year.

Do some back of the envelope math here. You can work one more year and collect an extra $3300/year for the rest of your life. That increment is worth somewhere between $50k and $100k, depending on various assumptions re interest rates and your health. Call it $75k just to make the comparison easy. The alternative is that you can retire in August 2006 and collect $29,800+$46,700=$76,500 in the first year doing whatever you like. Just to make it clear, that $76k in the first year isn't available to you if you keep teaching.

Bottom line, whichever alternative you choose, you are in almost exactly the same boat financially. If you loved teaching and it wasn't a source of considerable stress, then perhaps it would be worth your while to continue even if there were no financial benefit. Given what you have written re stress and with scant financial benefit from staying one more year, what's the point?

 

[bow-tie]

76k/ year. Yikes. My fam could live like kings on that kind of coin.

I would say sit down and get a good grasp of what you spend, and see if your annuity/pension $$ can cover it. If it can, then don't let the door hit hit ya where the good Lord split ya...

 

[azanon]

Kids in Asia are spoiled?

 

[Mountain_Mike]

Single and $76K per year? I'd be so "outta there" it's not funny. My personal "magic number" is about $50K per year!

 

[Rob]

If I retire in Aug. 2006, I would get about $29,800 per year if i chose to live off the annuity interest. If I were to retire in August 2006 on full pernsion, I would get about $47,000/year TOTAL. If I taught for one more year, then the $47,000 increases to about $50,500/year. Is the extra year woth it?

 

[BUM]

If I retire in Aug. 2006, I would get about $29,800 per year if i chose to live off the annuity interest. If I were to retire in August 2006 on full pernsion, I would get about $47,000/year TOTAL. If I taught for one more year, then the $47,000 increases to about $50,500/year. Is the extra year woth it?

NO

 

[retire@40]

If I taught for one more year, then  the $47,000 increases to about $50,500/year.  Is the extra year woth it?

It's worth it only if you need to live on $50,500 a year instead of $47,000. Otherwise, it's not worth it. You can't buy your time back.

 

[Hyperborea]

If I retire in Aug. 2006, I would get about $29,800 per year if i chose to live off the annuity interest.  If I were to retire in August 2006 on full pernsion, I would get about $47,000/year TOTAL.  If I taught for one more year, then  the $47,000 increases to about $50,500/year.  Is the extra year woth it?

Can you live on the $47K / year?  Do you need the extra $3K to pay for your lifestyle plans in retirement?  How much below that pension income do you plan to live?  If you need all that income immediately in retirement do you have outside savings?  While you've got a partial COLA, 3% may not be what you experience for inflation.  There have been periods where it has been higher and if you are limited to 3% increases you would fall behind in such a scenario.  If you don't need all of the money now and have little outside savings then stashing some aside to cover future shortfalls would be prudent.  Whether you can retire or not will depend on your lifestyle plans and other assets.

 

[Ol_Rancher]

I am the same age as you. I taught in the public schools with a couple short breaks for travel as a young man since I was 21.

I retired at age 53 when my years of service + my age = 80.

I always advised my fellow teachers to stop chasing a few percentage points per year for additional service. You and I have a 50% chance of living another 15 or so years. How many of them are you going to give to the classroom?

As you continue teaching the stress increases year by year at our age ... How many of those 15 years will be in good health? Will our final years be as good as the next few ?

My advice: Retire at end of this school year!

 

[cute fuzzy bunny]

Or look at it this way. Quit and take the 47k...then is there something you find enjoyable but didnt do for a living that makes oh...say $3k a year working very part time? Tying flies? Splitting wood?

 

[Mr._johngalt]

This is a serious question. Am I the only one on this board who just said "I quit" without any real planning
and figured I would work out the details as I went along? It surely seems that way. I know it was partly fueled by galloping egomania, but still.......................
Anyone else do this, or am I alone in the universe?

JG

 

[unclemick]

I was canned(PC er Layed off) at age 49. Pissed me off so much that I didn't look real hard for another job. That was Jan 1993. My er early retirement plan prior to that event was 2006 at age 63.

 

[Spanky]

No brainer for me. I can live on $30K a year with no dependents. Why work when you do have to? You cannot equate a monetary value to freedom and time to do things that you want to.

 

[cute fuzzy bunny]

This is a serious question. Am I the only one on this board who just said "I quit" without any real planning
and figured I would work out the details as I went along? It surely seems that way. I know it was partly fueled by galloping egomania, but still.......................
Anyone else do this, or am I alone in the universe?

JG

Nope, I had no plan at all, just a bunch of money, sick of working, tired of the job, fresh from a thoroughly enjoyable summer sabbatical, and I figured I'd probably go back to work at the same place after enjoying a year off with pay courtesy of a RIF program I dropped in on.

Then after a couple of months filled with fits of giggling and 12 hour sleeps, I ran some numbers, said "I can do this" and never looked back.

 

[parnass]

This is a serious question. Am I the only one on this board who just said "I quit" without any real planning
and figured I would work out the details as I went along? ...
JG

I worked in high tech R&D at a large corporation. I had always LBYM (lived below my means) and had been tracking my net worth for 6 years before retirement. But, I didn't have a retirement plan, as such. As time went on, my work environment deteriorated and I grew unhappy at work.

By age 48, I was seriously studying the company's pension formulas and graphed what my defined pension would be versus retirement age. The minimum retirement age was 50 and I figured that I would retire at about age 52 or 53.

But, as the job grew more stressful, retirement at age 50 looked better and better. As I turned 49, the question became whether I could even last another year on the job.

At about that time, a miracle occurred -- the company announced a voluntary early retirement offer for long time employees 45 or older! Employees were given only a month to decide whether to accept the offer. I took the plunge at age 49, thinking I would work out the details later and probably get another job.

That was over 3 years ago. JG, my wife is still working and like your wife, doesn't want to retire any time soon. Her salary is about equal to my (non-COLA) pension. We have been blessed with an increasing net worth -- more than $1M US. I didn't have to go back to work and probably won't unless it's working part time in something fun -- a lot of fun

At this point, the biggest threat to continued bliss is ever-increasing healthcare insurance costs.

 

[Cut-Throat]

I didn't have to go back to work and probably won't unless it's working part time in something fun -- a lot of fun

Parnass,

We have very similar situations. I used to believe that I would go back to work in something fun. But now I know that doing anything that someone would pay me for is no fun. Going on 4 years, and it would take a team of Clydesdales to get me back to the workforce.

 

[Mr._johngalt]

Hello parnass! Re. "ever increasing health care costs",
I feel your pain man....................

JG

 

[ESRBob]

If I retire in Aug. 2006, I would get about $29,800 per year if i chose to live off the annuity interest. If I were to retire in August 2006 on full pernsion, I would get about $47,000/year TOTAL. If I taught for one more year, then the $47,000 increases to about $50,500/year. Is the extra year woth it?

Rob,
I think you've got the consensus here that it's time to move on, but if a part of you deep inside didn't know that already, you wouldn't go ask a bunch of early retirees the question!

TH had the operative point, imo -- you'll have all your time back to tutor or whatever you like, which should easily make a few extra thousands if that is what you are puzzling over at the margin.

You have an obligation to the students and fellow teachers to get out of there before you become a sour old son-of-a-gun, too, which you need to consider.

I had one technical question because I am not famiiliar with the TIAA-CREF plan -- if you lived off interest only, is that a year-by-year decision or is it something you commmit to, but later get the principal from -- I wonder if you could elaborate on the pension options that would pay you either 29K or 48K.

Also, did you mention if you could collect pension in August 2005? Where would you want to live? It seems that there are plenty of places to live in Asia that could be inexpensive, but maybe the states is where you want to settle. Either way 50k or so should be fine. But you didn't mention if you had other savings that could help you buy a home -- home prices in the states are higher than you remember, to say the least, and if you've been out of the market and have no home equity built up, it is a factor to consider. Not that another year one way or the other is going to make a difference, but just so you are planning for it.

You mentioned you wanted to study Tai Chi and meditation -maybe as a way to relax, though they'd make great lifelong activities. Start doing them now -- there should be classes on the weekends; when I lived in Tokyo I used to get up early every morning and go over to the old Todai campus and do tai chi in a little park there , or on the roof of our apartment when Fuji-san was in full view -- it was great!

Your worries about having' enough' money are not going to get solved at the level of working another year and another year to earn another 3% in your pension. Here's how to solve your worries about having enough, imho:

Make lots of models, compare your estimated income and current or future budget and living expenses, go shop for real estate on weekends or during school vacation, or whatever you need to do to fill in some real numbers in your new budget. Immerse yourself in whatever calculators, literature etc on living in retirement if you feel that will help the rational part of your brain understand the various risks, long-term costs etc. Do your math-- I pet dollars to donuts you realize you are actually in very good shape -- a COLA'd pension,with I am betting health benefits thrown in, backed by a teacher's union means you really have a solid gold security there. But just in case, make a Plan B of what you'd do if things go tight. (moving into a monastery is always cheap, and could let the savings accumulate for awhile!). Then really actively start visualizing pulling the plug and doing what you want to do with your life. Get the paperwork and find out the dates you'd need to report/commit etc. Make it real.

As long as you are worried about having enough, you never will have enough. Once you start thinking in constructive terms about what you want your life to be, what you want each day to feel like, what you love about life and also that stuff (your current work) that you have long since outgrown and are ready to walk away from... that is the only way you'll get to the place where you'll realize that not only do you already have 'enough', but that you always will have enough. The only thing you need to do now is get your time back and start living your life on purpose before it's too late. Good luck, bon courage and Carpe Diem, Rob!

 

[Rob]

ESR Bob,
In answer to your questions, TIAA-CREF is a teacher retirement pension plan used at universities and private schools areound the country and American International Schools (where I work). I have been putting my own money into this plan since 1977, and in some cases the schools have been contributing to this private pension plan as much as I have.
I can opt to retire anytime I want. One part of the plan allows me to live off the interest of part of my retirement investments with TIAA-CREF, the annuity part, and that would give me close to $30,000/per year. The rest of my retirement pension funds are in stocks, bonds, and property stocks, and this remains and grows at whatever the market does.
I can get full pension anytime I want. If I wait longer, then the stocks, bonds, etc grow and that increases my pension when I do declare the time is here to retire. I continue to put money into TIAA-CREF montly. If I collect my full pension in August 2006, the pension start at $47,000 but increases 3% yearly. If I live off the interest from the annuity part, that begins at $30,000/year. I can terminate the interest annuity anytime I want and opt to get the full pension. However, the longer I wait, the more the pension funds grow.
I am leaning toward leaving June 2006 and getting the $30,000/year and teaching part-time, 2 or 3 hours a day. I would have no insurance and no house. Renting is not a problem, and even if I live in the states, I have read that most ER's get an insurance policy with a high deductable. I'm not sure of the cost, but hopefully it is manageable. If not, then I suppose I'd have to opt for the full pension ($47,000) instead of holding off. Once I decide to get the full pension, it is permanent.
I have already signed a contract for one more year to teach. I am trying to embrace my decision to leave, but still wondering about costs, health insrance, etc. I so appreciate the encouragement from the participants here. Thankyou. I will try and embrace this decision with enthusiasm.

 

[cute fuzzy bunny]

Check www.ehealthinsurance.com

You should be able to get an idea of the relative healthcare costs in your neck of the woods for the primary care providers.