Announced my retirement this week

[martyp]

I started looking into retirement last June and made the decision in early July. I've sat on the decision for a couple of months to make sure it was still a good idea. It is. I've been following this forum for a couple of months. This week I resigned from my position effective February 2011. My last day at work will be December 17th.

The push was the advancement of technology which made my engineering position uninteresting and obsolete. The pull was the realization that I had a pretty good defined benefit plan. A former employee of mine once told me that when he looked at his retirement benefits he realized he was working for free. It's just about the same thing for me. I suddenly realized the power of living below your means. The other pull was that my wife thought it was a great idea.

As everyone probably knows, the math behind a defined benefit plan is: age factor x salary x years of service. At 55 years age sort of works against me. However, I make a decent salary and I've worked at the same place for 30 years. I get to count my 7 months of accumulated sick leave toward my service credit. I get to burn off 12 weeks of accumulated vacation time to extend my service another couple of months. My car payment will be done in two years. My house mortgage is really low and will be paid off in three years. My CA Prop 13 property tax is low. No kids and no debts.

In June, my wife and I put together "The Spreadsheet" of income and expenses for a gap analysis. We were pretty generous on the expenses and we still came out with $2500/mo extra income so even if I underestimated some expenses I've got a pretty good buffer to work with. All growth assumptions in the spreadsheet are ultra conservative.

The benefit has a COLA built in. I get full health benefits. The Health rate is low right now but is not guaranteed to stay low. We have our retirement 403b savings which I figure we won't have to touch for at least 10 years. My wife intends to continue working but we've built in her retirement at 55 too (in three years).

I expect to have to budget more closely and to have to cut back in some areas but I don't see that as a real hardship. My biggest challenges don't seem to be financial. They more along the lines of keeping myself socially occupied.

I hadn't even considered retirement until 4 months ago. It surprised quite a few of my friends and family but I've gotten a lot of support. It's a pretty big deal for me. I'm comparing it to graduating high school or college. There is a whole new world and way of life out there that I know little about. A little scary but exciting too.

[TooFrugal]

Congratulations! It sounds like you have everything well under control. I'm envious of all you guys with the defined benefit pensions and the health benefits.

[chris2008]

Congratulations.
Recommendation: when your wife remains working, always get up with her, even though you do not have to.
I am wife of a teacher (aka loooong vacation) and you cannot believe how demotivating it would be to have him still sleeping while I have to get up and out to work.

[BigNick]

Quote:

Originally Posted by martyp The pull was the realization that I had a pretty good defined benefit plan. A former employee of mine once told me that when he looked at his retirement benefits he realized he was working for free. It's just about the same thing for me.

Anyone with a DB pension who has hit the minimum age for a payout, even a reduced one, should take an annual look at their effective remuneration, defined as (your salary) minus (what the pension plan would pay if you left today). It can be quite sobering.

At my place of work, we have a generous DB plan: employee pays 9% of salary, gets 2% of final salary per year of service, 70% maximum. If you leave before 60 your pension is reduced, but if you stay after 60 and you have 35 years service, you're paying 9% for 0% return. In effect, for every $1000 of your salary, you are only getting $210, because the $1000 goes down to $910 after you've paid your pension contribution and you could have $700 if you left. (In fact it's even worse than that, because staff pay more for their medical insurance than retirees.)

The bottom line is that a senior assistant grade person could leave us and either get a minimum wage job which would mean their overall net monthly income was higher than it is now; or, they could FIRE and take only a 20% income cut. And yet many people hang on, because after 35 years in this organisation, they have no other life.

As of November, when I hit 50 and could take a massively reduced pension compared to if I stayed until 60 (40% reduction for the extra 10 years, 35% reduction for the 10 years of contributions I won't have made), I will be working for 80% of my salary. That figure will go down by about 4 percentage points per year until I'm 60. As soon as the portfolio can pick up the slack, I'm outta here.

[obgyn65]

Congratulations Marty.

[chinaco]

Congrats.

[KanDo]

Big congrats! Sounds like all your ducks are in a row for you!! Best wishes and enjoy.

[Purron]

Quote:

Originally Posted by martyp My biggest challenges don't seem to be financial. They more along the lines of keeping myself socially occupied.

This is a challenge for many of us. You can find lots of ideas on this forum plus a place to communicate with people in a similiar situation. Hope to hear more from you.

[travelover]

I'm a retired engineer and I'm never bored. I think that you will find that you develop new interests with your extra time. If not, go back to work at something you really love to do.

[fisherman]

Enjoy! You will not likely miss work for long if at all.

[martyp]

Quote:

Originally Posted by chris2008 Congratulations. Recommendation: when your wife remains working, always get up with her, even though you do not have to. I am wife of a teacher (aka loooong vacation) and you cannot believe how demotivating it would be to have him still sleeping while I have to get up and out to work.

I am a natural early riser so I am always up before her. But more to your point . . . part of the deal is that I will start taking over most of her portion of the housework so we both have the weekends free to do fun stuff. (We already split the housework 50/50.)

[martyp]

Quote:

Originally Posted by BigNick And yet many people hang on, because after 35 years in this organisation, they have no other life.

We recently had someone in the Finance Dept retire after 30+ years. He was back at work 30 days later as a rehired retiree. How sad . . .

[martyp]

Quote:

Originally Posted by travelover I'm a retired engineer and I'm never bored. I think that you will find that you develop new interests with your extra time. If not, go back to work at something you really love to do.

What I really like to do is help people. Engineering was a means to an end. I don't need engineering to do something I like. Thanks.

[Alan]

Quote:

Originally Posted by martyp I am a natural early riser so I am always up before her. But more to your point . . . part of the deal is that I will start taking over most of her portion of the housework so we both have the weekends free to do fun stuff. (We already split the housework 50/50.)

Doing that will be a HUGE deal to her. My wife ESR'ed 6 years before me and when she did she took on most of the household chores and it was wonderful for me as well. No more shopping after work or at weekends - if I ran out of something I'd just write it on the small whiteboard on the fridge and the "shopping fairy" would get it

She also continued to get up with me each morning, except for the last 2 years when I switched sites and started getting up at 5 every day so I could do flex time and have Fridays off.

[NW Landlady]

Quote:

Originally Posted by martyp I am a natural early riser so I am always up before her. But more to your point . . . part of the deal is that I will start taking over most of her portion of the housework so we both have the weekends free to do fun stuff. (We already split the housework 50/50.)

I told DH about this post & he said "You're Kidding!! "

Right now I'd say we are about 85(me)/15(him) and I doubt if that will improve when he retires, LOL!

I am still not FIRED, but having access to a group of painters, landscapers, maintenance "elves" has spoiled the man....

His 15% is occasionally cooking meat on the bbq...it figures!

[martyp]

Quote:

Originally Posted by NW Landlady I told DH about this post & he said "You're Kidding!! " Right now I'd say we are about 85(me)/15(him) and I doubt if that will improve when he retires, LOL! I am still not FIRED, but having access to a group of painters, landscapers, maintenance "elves" has spoiled the man.... His 15% is occasionally cooking meat on the bbq...it figures!

Currently I do all the food shopping, cooking, and cleanup as well as any "manly" tasks like crawling under the house, into the attic or up on the roof. She does the housecleaning, laundry, and gardening.

[Nords]

Quote:

Originally Posted by martyp My biggest challenges don't seem to be financial. They more along the lines of keeping myself socially occupied. There is a whole new world and way of life out there that I know little about. A little scary but exciting too.

Well, as an engineer I can understand your social concerns if you use phrases like "gap analysis" and capital letters on words like "spreadsheet".

But it'll all work out fine. Before ER, one of your biggest concerns is "What will I do all day?!?" (and its companion "Who will do it with me?"). A couple months after ER you'll wake up one morning, look at all the things you have on your calendar for that day, and wonder what the heck you were worrying about.

Quote:

Originally Posted by NW Landlady I told DH about this post & he said "You're Kidding!! " Right now I'd say we are about 85(me)/15(him) and I doubt if that will improve when he retires, LOL!

Hey hey hey, some of us haul more than half the load, even though our gender demography suggests otherwise!

[NW Scruffy Guy]

Quote:

Originally Posted by NW Landlady I told DH about this post & he said "You're Kidding!! " Right now I'd say we are about 85(me)/15(him) and I doubt if that will improve when he retires, LOL! I am still not FIRED, but having access to a group of painters, landscapers, maintenance "elves" has spoiled the man.... His 15% is occasionally cooking meat on the bbq...it figures!

I have been very lazy lately. Expect FIRED in 4/11. My attitude is not good right now at work.

Bruce
NW Landlady's other half.
yes that is me in her avatar

[NW Scruffy Guy]

Quote:

Originally Posted by martyp I started looking into retirement last June and made the decision in early July. I've sat on the decision for a couple of months to make sure it was still a good idea. It is. I've been following this forum for a couple of months. This week I resigned from my position effective February 2011. My last day at work will be December 17th. The push was the advancement of technology which made my engineering position uninteresting and obsolete. The pull was the realization that I had a pretty good defined benefit plan. A former employee of mine once told me that when he looked at his retirement benefits he realized he was working for free. It's just about the same thing for me. I suddenly realized the power of living below your means. The other pull was that my wife thought it was a great idea. As everyone probably knows, the math behind a defined benefit plan is: age factor x salary x years of service. At 55 years age sort of works against me. However, I make a decent salary and I've worked at the same place for 30 years. I get to count my 7 months of accumulated sick leave toward my service credit. I get to burn off 12 weeks of accumulated vacation time to extend my service another couple of months. My car payment will be done in two years. My house mortgage is really low and will be paid off in three years. My CA Prop 13 property tax is low. No kids and no debts. In June, my wife and I put together "The Spreadsheet" of income and expenses for a gap analysis. We were pretty generous on the expenses and we still came out with $2500/mo extra income so even if I underestimated some expenses I've got a pretty good buffer to work with. All growth assumptions in the spreadsheet are ultra conservative. The benefit has a COLA built in. I get full health benefits. The Health rate is low right now but is not guaranteed to stay low. We have our retirement 403b savings which I figure we won't have to touch for at least 10 years. My wife intends to continue working but we've built in her retirement at 55 too (in three years). I expect to have to budget more closely and to have to cut back in some areas but I don't see that as a real hardship. My biggest challenges don't seem to be financial. They more along the lines of keeping myself socially occupied. I hadn't even considered retirement until 4 months ago. It surprised quite a few of my friends and family but I've gotten a lot of support. It's a pretty big deal for me. I'm comparing it to graduating high school or college. There is a whole new world and way of life out there that I know little about. A little scary but exciting too.

Marty-

Congrats! I invoked the same thing a couple weeks ago, although I will be working until ~ 4/11 (FIRED date). My boss wanted me to lead a large multi year project and I told him that I didn't think that was a good idea. He kept pressing me on why and I told him that I am calling it quits (aka FOAD, you guys need to put this one in your acyronom list).

I am also an engineer who works for a major aerospace company and NW Landlady's other half. I can call it quits relatively easily. It will take her longer to do this. I will help her, as I will retire first.

Bruce

[Sue J]

Quote:

Originally Posted by martyp My biggest challenges don't seem to be financial. They more along the lines of keeping myself socially occupied.

Congratulations on making the decision. My DH retired on 6/1/10 with a COLA-ed defined benefit plan that includes health insurance, similar to yours except that he had almost 27 years.

Right now he doesn't want to be socially occupied. His career was in social services and I think he's dealt with enough people to last him a long time. So far he's been content to do things at home, go out on his own biking or hiking or just experience life without the daily work grind. Lately he's been talking about simplifying things around the house, like he's adjusting to no longer needing to be on the working treadmill.

NW Scruffy Guy,

Welcome to the board. I had to look up FOAD. Learn something new everyday.