Hi, pdhenry here

[pdhenry]

Let's see, where to begin?

49, working as an engineer for a defense company (you've seen our stuff on the news). Have around $1 million in various accounts - 401(k), wife's IRA, Roths, a taxable brokerage account. Mostly mutual funds, maybe 5 or 10% bond funds. A couple of stocks. No mortage per se, but have a ~$40k balance in a HELOC.

My wife is ~9 years older and left the workforce in 2003. About 40% of the tax deferred stuff is in her name. No pension, and her 401(k) was rolled into her IRA.

At 55 I will be eligible for pension (I will have been with the company for 29 years), and my understanding is that if I work to retirement at 55 or older I can buy into the company's group insurance (e.g. get the group rate but pay 100% of the premium rather than 20% as I am now) until age 65.

My target for retirement is $2 million in all accounts, and I think I'll get there by 55 or 56. If I'm not there at 55 I may retire anyway and find something else to do until the balances top $2M.

So by 56:

• I'll be pension eligible
• I'll have a source for insurance that should be fairly affordable
• Wife will be SocSec and Medicare eligible

Looking forward to planning my RE over the next few years and happy to have found this forum.

 

[bssc]

Welcome to the board

I think that you will find threads that will talk about your options and help you plan your ER. We are happy that you found us too.

 

[wildcat]

Welcome pdhenry. You will be at home here -- lots of engineers roaming the boards.

If you read people's thoughts on whether they should/should not ER, it usually always comes down to finding affordable health insurance. Sounds like you have that part covered.

Just curious, is the pension COLA'd?

 

[pdhenry]

Not COLA'd.

Based on current salary I'd earn $1560/month at 55, or $2450/month if I deferred to age 65 (still retiring at 55).

Pensions are changing within the next year - not going away but they might (for example) increase the averaging period for final average compensation. But the annual decrement for ER might go down based on what I've seen in other operating groups that have already made the change.

 

[wildcat]

Yeah, I missed the "company" detail of your intro. I haven't heard of too many (none to be exact) company COLA'd pension plans available to employees.

For only an extra $890 a month, I too would jump at 55/56 no questions if I had health insurance locked up. Your portfolio returns stand a good chance of outpacing the cost/benefit of working over the 9/10 year period.

 

[HobbyDave]

Are you comfortable sharing your estimated expenses? It certainly seems like you'll be ready to retire at 55, but that would greatly depend on your expenses.

For example, was the Heloc used to pay off home improvements which add value to the home, or to pay off c-card bills? That kind of thing can greatly change how well the retirement will go

Good luck!

 

[pdhenry]

I originally got the HELOC in '02 to combine a ~$25k first mortgage and a ~$20k car loan into a single payment. Since then we've put about $12k of a kitchen remodel through it. We'll need windows in the near future and some other work before selling - probably will ride at least partly on the LOC.

Given that I'm saving about 18% of my ~$95k salary as it is, I'm feeling confident that I'll be comfortable with the $80k initial income that a $2 Million retirement account will provide us, particularly as social security and pension payments come online.

I haven't committed an estimate of future expenses to a worksheet. No credit card debt today (from time to time I take advantage of a particular Mastercard that has a 90-day interest free period for all purchases but I don't end up paying interest). I could easily find a way to spend $5-10K annually on travel, property taxes are running about $5 nowadays, etc.

 

[Natesal]

Hi Pdhenry. Do you mind me asking which contractor you work for? I did a project last year for General Dynamics OTS, thats the only reason I ask.

 

[pdhenry]

Let's just say that the parent is a British Aerospace company.

 

[haha]

Yeah, I missed the "company" detail of your intro. I haven't heard of too many (none to be exact) company COLA'd pension plans available to employees.

Only Uncle Nasty can underwrite these, and his little sibs in the states and municipalities. How do they do it? At gunpoint from us, the taxpayer.

Ha