54 year newbee old looking to FIRE 2 years early.

[AdultArt]

Hi am a 54 yo single with no dependents thinking about pulling the plug 2 years early because my job has gotten that unsatisfactory. I have over 32 years federal service, including all military time bought back.

Current Salary 90K
401K (TSP for me) 660K all in the L2040 fund
Roth IRA 40K
House paid for and no other outstanding debts.
Rainy day fund 60K
Pension available at 56 roughly 30K
Military Pension at 60 about 18K
VA Healthcare
Tricare Health Insurance at 60
Currently reside in LCOL area with no plans on moving
Average annual spending is less than 30K with taxes. Thanks Quicken.

If I stay until age 56 I will get an additional pension (FERS special supplement) of about 11K annually until I turn 62. I also would increase my pension amount a few thousand dollars a year more due to longevity and a larger high 3 salary computation plus the addition of about 10 months of sick leave earned added to my pension calculation. Most importantly I will be able to continue my Federal Employee Health Benefits into retirement. I have participated in FEHB since day 1 so the 5 year requirement is met. I also have been maxing out my TSP, catch up and Roth IRA contributions since turning 50.
The little voice inside of me says stick it out for 2 more years but the dissatisfaction seems to be growing. I never really figured out how to use social security in my retirement plans but I do make sure my incomes are correct every year when I look my statement up on line. My TSP is in the L2040 fund because every time I tried to outsmart the market I lost, a lot. The TSP also allows me to withdraw money out the year I turn 55 if I separate penalty free. January 1, 2018 will be that year.

So should I stay or should I go?

 

 

[Sunset]

Stay.

You claim to have an extra $60K to invest each year, but it doesn't show in your numbers. So either you missed some expenses (didn't pro-rate lump sum expenses like a car, furnace, roof), or you have been a gambler with your money.

Staying just 2 more years means: extra $120K in ROTH & IRA & regular brokerage (which you don't mention), plus extra 11K per year (the value of that is $275,000). So a total equivalent of approximately $400,000 MORE for retirement.

 

[exnavynuke]

Using the following data:
Current investment balance $700k
Life expectancy 95 (conservative is good here imo)
Pension of $30k/year in 2 years
Pension of $18k/year in 6 years
No SS income

FIRECalc tells me that historically, you have a 95% success rate if you spend $67,122/year going forward and a 100% success rate if your spending is less than ~$60k/year assuming you retire now.

Considering you say your current spending (<$30k/year) is less than your pension will be in 2 years, and much less than your combined pensions will be in 6 years, I'd be retiring on January 2nd of next year if I was in your shoes.

 

[militaryman]

Eligible?

If you were born in 1963 I believe you won't even be eligible to retire under FERS until you are 56yo unless you plan to not draw an immediate annuity check and also jeopardize the FEHB which it sounds like you may be aware of and are willing to deal with...

Is the work situation effecting your health? If so see a doc/counselor etc and I would USE ALL that sick leave LIBERALLY --- and stick it out for the final two years -- 10 months of sick leave makes for 2-3 day work weeks I'm sure your doc would help with the paperwork that the boss might ask for, especially if you explain your long military/federal career and the stress you are feeling etc etc etc --- when the leave runs out you can even go leave without pay for up to 6 months a year without affecting pension. I'm not saying make something up, just something to consider....also if that is not an avenue you pursue perhaps a frank discussion with management explaining where your at and asking for a detail or reassignment? Maybe 6 months doing something a bit different would help you bridge the final two years.


https://www.opm.gov/retirement-services/fers-information/eligibility/

 

[texcurtis]

If you are under an early out offer or buy out offer you can retire in the year you turn 55 and get your FERS annuity & keep your Insurance. The supplement would start at 56. This is what I did & it's worked out well. Not sure I could have done without the insurance & supplement soon after by leaving too early. I'd stay till you can keep your insurance at least if it was me.

 

[Hopeful]

Stay.

You claim to have an extra $60K to invest each year, but it doesn't show in your numbers. So either you missed some expenses (didn't pro-rate lump sum expenses like a car, furnace, roof), or you have been a gambler with your money.

This was the first thing I thought too. I tend to see this in these type of threads. People claim their expenses are really low, but then do not seem to have proportional savings balances that would indicate such. Something doesn’t seem right unless you got a recent hefty raise, or recent drastic spending cuts. I would go back and look at the numbers again to verify your spending is truly that low.

 

[exnavynuke]

This was the first thing I thought too. I tend to see this in these type of threads. People claim their expenses are really low, but then do not seem to have proportional savings balances that would indicate such. Something doesn’t seem right unless you got a recent hefty raise, or recent drastic spending cuts. I would go back and look at the numbers again to verify your spending is truly that low.

People also tend to lose massive costs (like kids, mortgages, etc) as they near retirement and can thus start pumping a lot more money into their savings if they want. Couple that with peak earning years tending to be somewhere from 40-55 these days, and a person's income:savings ratio can change drastically in the last few years.

 

[MikeWillRetire]

You really should stay in the federal government until you are 56. Consider applying for an easier, lower paying job. You shouldn't give up the FERS supplement and health benefits. They're too valuable.

 

[AdultArt]

I guessed I learned how inaccurate my numbers were after reading all the replies.
My gross annual income is about 90K, I enter all my data into quicken manually since I am a Luddite when it comes to computers.
In 2016 using my tax statements and end of year pay statement I grossed around 87K. After TSP contributions and health insurance this dropped my taxable income to about 61K. After state and federal income tax, OASDI, Medicare and retirement deductions my net takehome is around 40K. I contribute the max to my Roth IRA so that leaves me with about 34K. Which comes close to my original 30K spending. Now where that extra 3-4K went is puzzling and I'm sure I'll figure it out. When I originally said including taxes in my spending I was referring to property and school taxes which are considered high to those not from New York.

I appreciate all the feedback and will still try to stay at work for the next 2 years, there is an occasional good day I have to admit. Thanks to all who responded.

 

[MBAustin]

Welcome AdultArt! If you haven't found them already, we have a helpful list of things to think about before you make your decision:

Some Important Questions to Answer

You've already received some good advice above. Getting a firm handle on your actual expenses is something we all recommend in the years leading up to retirement.

I would have to agree that some mental health days are in order for you in the next few months. That alone may help you make it the final two years if that's what you decide to do.

 

[RAE]

You really should stay in the federal government until you are 56. Consider applying for an easier, lower paying job. You shouldn't give up the FERS supplement and health benefits. They're too valuable.

+1000. NO WAY would I give up your federal health benefits, especially. If your current job is really that bad, see if you can get a lateral transfer to another position that you can tolerate better for the last two years.

 

[Terhathum123]

I guessed I learned how inaccurate my numbers were after reading all the replies.
My gross annual income is about 90K, I enter all my data into quicken manually since I am a Luddite when it comes to computers.
In 2016 using my tax statements and end of year pay statement I grossed around 87K. After TSP contributions and health insurance this dropped my taxable income to about 61K. After state and federal income tax, OASDI, Medicare and retirement deductions my net takehome is around 40K. I contribute the max to my Roth IRA so that leaves me with about 34K. Which comes close to my original 30K spending. Now where that extra 3-4K went is puzzling and I'm sure I'll figure it out. When I originally said including taxes in my spending I was referring to property and school taxes which are considered high to those not from New York.

I appreciate all the feedback and will still try to stay at work for the next 2 years, there is an occasional good day I have to admit. Thanks to all who responded.

Good clarification. I'd stick it out if I were you.

 

[UnrealizedPotential]

Two years for 11k more in pension benefits until age 62 + health benefits? I would suck it up and do the two years. Easy for me to say I know, but man, that's a pretty big carrot stick that 11k for two more years and the health benefits . I'd do it.

 

[AndyS]

....

I appreciate all the feedback and will still try to stay at work for the next 2 years, there is an occasional good day I have to admit. Thanks to all who responded.

My work situation before I left the Feds had become "toxic" in some respects. Take a lot of annual & sick leave if you have to.