Hi, I have been lurking here a while soaking up all the great information. I am 54.5 and am eligible for retirement from the federal government. If I wait until my 55th birthday, there is no penalty, but the penalty at this point is only about 0.5 percent.
My pension would pay about $105,00 a year (with a survivor benefit), which is about $10,000 less than our current annual expenses. Every year I work my annual pension would go up about $4,000. It seems that the present value of this increase would be about $80,000 to $95,000, depending on various assumptions.
As a result, if I retire it seems that I would be walking away from a significant amount of money. The difference between my annual take home salary and take home pension would probably be only about $20,000, but the potential increase in the pension does give me pause.
I like my job and it pays well but there have been some changes in the organization recently that are not positive. Even so, my job is quite desirable although it can be quite stressful occasionally.
We also have about $800,000 total in mutual funds, TSP, and money market funds, including a large reserve in the money market. In addition we own an amount of farmland of almost equal value that generates between $20,000 and $30,000 annually. We still have a mortgage that costs us about $26,000 annually including everything, and it runs for another 24 years or so. My daughter will graduate from the state university in 3 years.
We have the income to cover our current expenses but I have been stuck in the one more year syndrome for several years. I think this may have been good in that the value of my annual benefit has gone up by about 25 percent over the last four years to cover almost all of our expenses, but now I am wondering how much further to go.
In sum, I'm debating whether it make sense to leave a desirable job accruing significant additional benefits or waiting another year or two. In 4 years I would be forced out of the CSRS. Medical insurance would be continued in retirement by my employer. I don't think it is realistic that I would find an equally desirable job at this salary level ($167,000) at my age in this job market. I don't want to make a foolish mistake and walk away from a good job and significant accruals in a defined benefit pension, but I also would really like to have less stress and more free time for a lot of other interests. I am trying to figure out the optimal retirement date from an economic point of view, and then compare that to how much longer I really feel like working. Any thoughts on anything I may be missing would be appreciated. Thank you.
John1954
My pension would pay about $105,00 a year (with a survivor benefit), which is about $10,000 less than our current annual expenses. Every year I work my annual pension would go up about $4,000. It seems that the present value of this increase would be about $80,000 to $95,000, depending on various assumptions.
As a result, if I retire it seems that I would be walking away from a significant amount of money. The difference between my annual take home salary and take home pension would probably be only about $20,000, but the potential increase in the pension does give me pause.
I like my job and it pays well but there have been some changes in the organization recently that are not positive. Even so, my job is quite desirable although it can be quite stressful occasionally.
We also have about $800,000 total in mutual funds, TSP, and money market funds, including a large reserve in the money market. In addition we own an amount of farmland of almost equal value that generates between $20,000 and $30,000 annually. We still have a mortgage that costs us about $26,000 annually including everything, and it runs for another 24 years or so. My daughter will graduate from the state university in 3 years.
We have the income to cover our current expenses but I have been stuck in the one more year syndrome for several years. I think this may have been good in that the value of my annual benefit has gone up by about 25 percent over the last four years to cover almost all of our expenses, but now I am wondering how much further to go.
In sum, I'm debating whether it make sense to leave a desirable job accruing significant additional benefits or waiting another year or two. In 4 years I would be forced out of the CSRS. Medical insurance would be continued in retirement by my employer. I don't think it is realistic that I would find an equally desirable job at this salary level ($167,000) at my age in this job market. I don't want to make a foolish mistake and walk away from a good job and significant accruals in a defined benefit pension, but I also would really like to have less stress and more free time for a lot of other interests. I am trying to figure out the optimal retirement date from an economic point of view, and then compare that to how much longer I really feel like working. Any thoughts on anything I may be missing would be appreciated. Thank you.
John1954