62 and a year or so from retirement

[beernutzbob]

I have 27 years in my state's retirement system and I'm thinking of hanging up the cap and gown.

The plan is to do this June 1st, 2022 which is the smart move because I would start receiving my pension and would also still receive the final 3 months of my 9 month contract which is paid over 12 months. Work health insurance would also still cover us during those 3 months.

However, FI and NW look strong now so I may throw caution to the wind shear and retire 1/1/2022 when I'd still be 62. DW retired in 2019 and we have plans to travel a lot, so the sooner the better getting started on that.

I have been a bogleheads forum member for many years but am currently on sabbatical from there.

[MBAustin]

Welcome, Bob, glad to have you here! How do your numbers look in FireCALC (links on every page here)? Do you have health care figured out (regardless of the date)?

Can't agree more with getting started on travel sooner rather than later, especially after last year!

[beernutzbob]

Quote:

Originally Posted by MBAustin Welcome, Bob, glad to have you here! How do your numbers look in FireCALC (links on every page here)? Do you have health care figured out (regardless of the date)? Can't agree more with getting started on travel sooner rather than later, especially after last year!

Thanks for the warm welcome MB. I have used FireCALC which is a great free tool and also iORP and the boglehead's retirement portfolio model spreadsheet. I now use the Pralana Gold retirement calculator to do what ifs and stress test my retirement projections as I'm comfortable with it and it has many options.

Luckily my state has a reasonable health care insurance option for members of the retirement system. My wife also has a health retirement account from her corporate job which will reimburse us for the retirement system health care premiums until it runs out.

[pacergal]

Welcome to the forum.
If your numbers look good now, I say go for it. Why wait? Join your DW and make each day your own!

[dak2018]

Quote:

Originally Posted by beernutzbob The plan is to do this June 1st, 2022 which is the smart move because I would start receiving my pension and would also still receive the final 3 months of my 9 month contract which is paid over 12 months. Work health insurance would also still cover us during those 3 months. However, FI and NW look strong now so I may throw caution to the wind shear and retire 1/1/2022 when I'd still be 62. DW retired in 2019 and we have plans to travel a lot, so the sooner the better getting started on that.

So your incremental benefit for working six additional months is 3 months of pay and 3 months of health insurance? That does not seem like much of a payoff if you are otherwise ready to hang it up - you will always be leaving something on the table when you decide to retire. I would only stay working if my retirement finances were marginal in some way, but that is not what you stated.

The only other factor I can identify is your desire to travel. I suppose it is possible that international travel could still be messed up, so if that is the focus of your travel plans, you could consider working while waiting for things to normalize.

(On second thought, just retire. You are prepared, and there are always open places to travel safely.)

[jollystomper]

Welcome and congrats!

My opinion (worth about as much as any opinion from an anonymous internet poster ) would be to wait until you are closer to the 1/1/2022 date to make the call. Who knows what you NW that depends on the market will look like then.

How much (if any) is your pension impacted by leaving on 1/2022 instead of 6/20222.

[beernutzbob]

Quote:

Originally Posted by pacergal Welcome to the forum. If your numbers look good now, I say go for it. Why wait? Join your DW and make each day your own!

Thank you. I ask myself 'why wait' a lot.

[beernutzbob]

Quote:

Originally Posted by dak2018 So your incremental benefit for working six additional months is 3 months of pay and 3 months of health insurance? That does not seem like much of a payoff if you are otherwise ready to hang it up - you will always be leaving something on the table when you decide to retire. I would only stay working if my retirement finances were marginal in some way, but that is not what you stated. The only other factor I can identify is your desire to travel. I suppose it is possible that international travel could still be messed up, so if that is the focus of your travel plans, you could consider working while waiting for things to normalize. (On second thought, just retire. You are prepared, and there are always open places to travel safely.)

Three months salary and health insurance would be a bit over $30k gross which isn't a lot in the context of our net worth but I still have a metal hurdle about walking away from it. Educators in my state who are paid on a 9 month contract over 12 months, which is the vast majority of them, typically retire 6/1. My retirement system told me more faculty/teachers retire 6/1 than all the other months put together because of this 3 month incremental benefit.

I was also planning on accelerating my 2021 Roth 403b contributions to do all $26k in those first 6 months which would give me over $100k in Roth accounts. There's nothing magical about $100k, I just think it has a nice ring to it. OTOH I'll probably never spend any of my Roth and it will just be inherited by my kids.

[beernutzbob]

Quote:

Originally Posted by jollystomper Welcome and congrats! My opinion (worth about as much as any opinion from an anonymous internet poster ) would be to wait until you are closer to the 1/1/2022 date to make the call. Who knows what you NW that depends on the market will look like then. How much (if any) is your pension impacted by leaving on 1/2022 instead of 6/20222.

That is good advice and that's what I plan to do. DW is on board with whatever call I make then.

There would not be much difference in my pension between a 1/1 and a 6/1 retirement date. We earn a bit over 2% of service credit each year so that would be a less than 1% service credit increase. The bigger difference is the 3 months of overlap where if I retire 6/1 I'm paid the remainder of my yearly salary and also my pension. I can't stop thinking that if I retire 1/1 I'm walking away from a pretty easy $30k in extra salary for 2021, even if I don't really need it to support retirement.

As I said in the previous post the money isn't lifechanging but I'm mostly trying to avoid regret about passing up on it. Maybe also it is a little hard to walk away from a job I've done for almost 30 years.

Thanks for your thoughts.

[38Chevy454]

Welcome beernutzbob, why not make it June 1st 2021? As in this year and in less than 1 month away? Same scenario as I see it, you get the 3 month insurance coverage. Of course it also means you would not be 62 and there may be something special about being 62 when retiring in your system? The 2 % loss in pension seems that would not be a bad effect given your statement about having enough now.

[beernutzbob]

Quote:

Originally Posted by 38Chevy454 Welcome beernutzbob, why not make it June 1st 2021? As in this year and in less than 1 month away? Same scenario as I see it, you get the 3 month insurance coverage. Of course it also means you would not be 62 and there may be something special about being 62 when retiring in your system? The 2 % loss in pension seems that would not be a bad effect given your statement about having enough now.

Good catch Chevy as I had originally planned to retire 6/1/2021 but a colleague asked me to help him again on a work project and accepting that offer meant working at least through the end of this September. The project pays about 10% over my regular salary but the main reason I accepted is I really like and respect this colleague and the work he does.

That's the only reason I'm working in 2021 past June. I had actually already completed and submitted part 1 of the two part retirement documentation our system requires to retire 6/1/2021 when I was asked to work on this project. I thought I was out and he pulled me back in.

In any case, the last date to submit part 2 of the retirement documentation for 6/1/2021 with the retirement system was 5/1/2021 so moot point about this June.

[Finance Dave]

welcome bob...and don't worry about your apprehension...many on here have gone through that. My only recommendation is to not be too firm about dates when you tell your employer until you are really sure. Ok to talk in generalities...but leave yourself some room to make adjustments as you see fit.

[beernutzbob]

Quote:

Originally Posted by Finance Dave welcome bob...and don't worry about your apprehension...many on here have gone through that. My only recommendation is to not be too firm about dates when you tell your employer until you are really sure. Ok to talk in generalities...but leave yourself some room to make adjustments as you see fit.

Thanks Dave. That sounds like sound advice. A recently enacted workplace policy has motivated me to retire 1.1.2022 instead of 6.1.2022. I feel liberated now.

[finnski1]

Quote:

Originally Posted by beernutzbob Thanks Dave. That sounds like sound advice. A recently enacted workplace policy has motivated me to retire 1.1.2022 instead of 6.1.2022. I feel liberated now.

Congrats. You just knocked another 5 months off your RE date! Only 7 more to go

[beernutzbob]

Quote:

Originally Posted by beernutzbob I have 27 years in my state's retirement system and I'm thinking of hanging up the cap and gown. The plan is to do this June 1st, 2022 which is the smart move because I would start receiving my pension and would also still receive the final 3 months of my 9 month contract which is paid over 12 months. Work health insurance would also still cover us during those 3 months. However, FI and NW look strong now so I may throw caution to the wind shear and retire 1/1/2022 when I'd still be 62. DW retired in 2019 and we have plans to travel a lot, so the sooner the better getting started on that. I have been a bogleheads forum member for many years but am currently on sabbatical from there.

I am happy to report I officially gave notice I'm retiring 1/1/2022. In higher education, faculty typically retire either 1/1 or 6/1 so I thought I would give my department chair some lead time and let her know now so that a replacement search can be set up.

Everyone I informed was positive and it has been a good day. There are 197 days to go until retirement but only 120 of those will be in the fall semester.

[street]

That sound good! I hope you continue to contribute to the site now and after retirement.

[JRon]

Congrats beernutzbob! Start making those travel plans…

[Dtail]

Congrats. Now it is time to totally enjoy life.

[jollystomper]

Quote:

Originally Posted by beernutzbob I am happy to report I officially gave notice I'm retiring 1/1/2022. In higher education, faculty typically retire either 1/1 or 6/1 so I thought I would give my department chair some lead time and let her know now so that a replacement search can be set up. Everyone I informed was positive and it has been a good day. There are 197 days to go until retirement but only 120 of those will be in the fall semester.

Congratulations!

[beernutzbob]

Thanks everyone! Yesterday was a very good day.