How much minimum monthly retirement income should be enough for retire?

[Shinge1233]

Hi, I am new here....
Just have a simple question for all experienced people here... If my monthly pension (not include SS and only 57 yr old ) can cover my monthly expense, then, should I retire?

Thanks

 

[RunningBum]

You may think that's a simple question, but it's not. Do you have other money to handle irregular expenses? You may have your health insurance premium paid, but most policies have deductibles and co-pays. Can you handle those if you get really sick or in an accident? Can you handle an unexpected car repair? How about eventual replacement of a car. What about vacations? House repairs, if you own? If you pension COLA, or will inflation eat you up?

 

[pb4uski]

Hi, I am new here....
Just have a simple question for all experienced people here... If my monthly pension (not include SS and only 57 yr old ) can cover my monthly expense, then, should I retire?

Thanks

It depends. Does your "monthly expense" include expenses of living that tend to be lumpy like health care deductibles and copays, periodic car replacements, if you own a home periodic roof, HVAC replacements, travel, etc.? federal and state income taxes? health insurance?

Also, life's emergencies that arise like money to tide you over if your car gets wrecked while you wait for the insurance claim to pay, etc.

 

[Shinge1233]

Thanks for your response...
My pension covers my medical insurance and I have no house payment. Also I do have 457 and 401k set aside for emergencies or vacation use about 30% of monthly pension (use 4%, rules). In fact, my pension has already taken to account the house repair, misc. cost, emergency cost, and all basic expenses . Is it enough?

 

[RunningBum]

I would never feel comfortable telling someone "Yes, you can retire". Especially with 3 sentences of information. IMO you should figuring out how to be able to decide this for yourself. I'm not inclined to spend any more time trying to drag details out of you that would shed more light on any issues you might be facing. Generally, the quality of answers you get depends on the quality of questions and information your provide. Good luck.

 

[pb4uski]

.... Is it enough?

Have you run your situation through FIRECalc or FICalc? What do those tools say?

 

[Shinge1233]

Not yet... Let me try it first... Thanks for your info

 

[Silver]

I trended all of my expenses in an excel spreadsheet for many years (many = over 10 years) before I stopped working. I still trend every dollar spent .....and I have been retired for 11+ years.

Information is power for me. If I know what expenses are trending, I can anticipate an added 2-5% (minimum) for each year in the future and sort through what the costs will be. That's how I knew when enough was enough for me.

FireCalc can certainly help. But garbage in is garbage out....so making sure your data is true is very important. Only then will you know for sure what amount you need.

 

[calmloki]

Gotta ask - does everyone have full faith that their pensions, from whatever source, will continue? Guess I'm just not that confident. What happens when a pension fund fails/ company goes bankrupt? I'd want a backup plan. Of course this is from someone with no pension and a whole $200/month this year in SS coming in. Spend my time worrying that the value of a dollar is getting chopped in half and that our savings might not be adequate.

 

[Shinge1233]

My question ...When should I retire? What mean enough? . We always think not enough then never retire... If I have enough pension for my basic expense and have emergency or saving fund , and 457k set aside. Why do I need to work for?

 

[ExFlyBoy5]

My question ...When should I retire? What mean enough? . We always think not enough then never retire... If I have enough pension for my basic expense and have emergency or saving fund , and 457k set aside. Why do I need to work for?

You need to answer that question for yourself. Others have mentioned FIRE calc and that's a great tool. Your very general questions are going to get very general answers...but it looks like you want a clear cut yes or no. Well, I say "YES" you can retire. Now...what that results in next week, next month, next decade...no one here can tell you that.

 

[ExFlyBoy5]

Gotta ask - does everyone have full faith that their pensions, from whatever source, will continue? Guess I'm just not that confident. What happens when a pension fund fails/ company goes bankrupt? I'd want a backup plan. Of course this is from someone with no pension and a whole $200/month this year in SS coming in. Spend my time worrying that the value of a dollar is getting chopped in half and that our savings might not be adequate.

Well, I am pretty confident that my mil pension will continue unless a) I murder someone or 2) the entire US Government goes bankrupt.

But, not a bad question. I know a mess load of airline pilots who have had a rough go because of changes to their retirement plans and bankruptcy (and having 2+ ex-wives probably doesn't help, either).

 

[mistermike40]

Gotta ask - does everyone have full faith that their pensions, from whatever source, will continue? Guess I'm just not that confident. What happens when a pension fund fails/ company goes bankrupt? I'd want a backup plan. Of course this is from someone with no pension and a whole $200/month this year in SS coming in. Spend my time worrying that the value of a dollar is getting chopped in half and that our savings might not be adequate.

The Pension Benefit Guaranty Corporation (PBGC) guarantees tens of millions of private-sector pensions, including mine. There is a benefit cap that varies by age (and possibly other factors). In my case, my pension is 100% insured (assuming PBGC's solvency).

 

[Shinge1233]

Would you tell us your retire experience? Then I can think more before retire....

 

[Walt34]

For the OP, here is a good list of questions that you'll want to have solid and well thought-out answers to before pulling the plug:

https://www.early-retirement.org/fo...re-asking-can-i-retire-69999.html#post1399715

Gotta ask - does everyone have full faith that their pensions, from whatever source, will continue?

Well, if my pension stops it's a safe bet the whole country is going to be in a world of hurting. Although it's from a county govt., it's right next door to D.C. and for that reason is virtually immune from the economic ebbs and flows that other areas have. And while I certainly don't agree with everything the County does, they are financially responsible and at the last quarterly report the pension plan was 98% funded. I've never seen it below 94% funded. So between that and SS and the savings, while we won't be taking any round-the-world cruises, we're a long way from Meow Mix and that cardboard box under a bridge.

 

[Time2]

The key point is to know what your expenses are.
Is it possible for you to go back 3 years and figure out what you had in assets, what your income has been and what assets you have now. Subtract any asset growth and then divide by 3. Then add some inflation to that number and multiply it by 25. If your pension is more than the number you came up with then you are close.
I have to assume you will still get your pension when you get SS.
No mention of a spouse, but if there is one, you need to figure out how they stand after your death.
Then how safe is the pension, and 2033 is not far off, are we going to get a 25% cut.

 

[pacergal]

https://www.early-retirement.org/for...ml#post1399715

Answer these questions, then come back and post if you have other questions.
It really all depends on your expenses, now and in the future.

 

[cyber888]

It depends on what's your pension .. and what's your expenses. Do you have a lot of leeway. When you say enough .. you receive $3000 and spend $3000 ? Or do you receive $5000 and spend $2,500.

 

[Out of Steam]

It depends. Does your "monthly expense" include expenses of living that tend to be lumpy like health care deductibles and copays, periodic car replacements, if you own a home periodic roof, HVAC replacements, travel, etc.? federal and state income taxes? health insurance?

Also, life's emergencies that arise like money to tide you over if your car gets wrecked while you wait for the insurance claim to pay, etc.

We retired at 60 and 59, and are awaiting Social Security eligibility. Planning to take one of ours in Fall 2022, and postpone the other by at least 3 years.

Those lumpy expenses are proving anxiety-producing at times. We had to replace our HVAC system shortly after moving into our house, and went into retirement with cars that were more used up than was probably wise. Than I got into an accident and bent the newer one, while the older one was having mechanical problems.

The car crisis seems to have passed, with the damaged car working OK after repairs. It should allow us to make a planned car replacement once COVID is over.

Just an example of lumpy expenses, and what could have been an unplanned $40K expense (a modest new car and a 4 year old SUV).

 

[jollystomper]

Gotta ask - does everyone have full faith that their pensions, from whatever source, will continue? Guess I'm just not that confident. What happens when a pension fund fails/ company goes bankrupt? I'd want a backup plan. Of course this is from someone with no pension and a whole $200/month this year in SS coming in. Spend my time worrying that the value of a dollar is getting chopped in half and that our savings might not be adequate.

My Megacorp pension plan is over funded. They are still profitable and the number of people getting pensions goes down every year since no one hired after the 1980s gets a pension benefit. The one concern is them deciding to sell the pension obligation to an insurance outfit, where I do not think it might be more exposed. In any case, I did not retire unless 2 out of the my 3 sources of retirement income (pension, SS, investments) could provide at least a basic level of comfortable support.

 

[RetireeRobert]

OP, yes you "can" retire.

Whether you "should" retire all depends.

 

[Shinge1233]

It depends on what's your pension .. and what's your expenses. Do you have a lot of leeway. When you say enough .. you receive $3000 and spend $3000 ? Or do you receive $5000 and spend $2,500.

The following are my conditions:

My monthly pension can covers the most current average monthly basic expenses plus 20% extra.

Also, approximate 30% of extra 457k monthly fund for emergency and vacation uses ( 4% of my total assets).

Therefore, I have 1.2x 1.3 = 1.56. 56% extra fund can be used every month and set aside.

SS doesn't count on yet because it requires 62 yrs above to collect it.

house has been paid off

Pension covers medical insurance. I can pick PPO or HMO.

Is it safe to retire? Or still wait....

 

[RobbieB]

You can retire. There is no safety.

Roll the dice!

 

[Sunset]

The following are my conditions:

My monthly pension can covers the most current average monthly basic expenses x 1.2

30% of 457k monthly fund for emergency and vacation uses ( 4% of my total assets).

SS doesn't count on yet because it requires 62 yrs above to collect it.

house has been paid off

Pension covers medical insurance. I can pick PPO or HMO.

Is it safe to retire? Or still wait....

OP - Plain numbers would be a much better way to ask.
Nobody can tell if your house expenses are realistic as you don't say what they are.

The bold part means to me, 30% of your 457K = 4% of total assets

How much do you plan on spending on vacations, and how many vacations do you plan per year.

Hopefully you did firecalc and other retirement calculators from other sites, plus used the simple rule 3.5% of savings (not counting house) should be at least equal to annual income needed.

 

[gauss]

The Pension Benefit Guaranty Corporation (PBGC) guarantees tens of millions of private-sector pensions, including mine. There is a benefit cap that varies by age (and possibly other factors). In my case, my pension is 100% insured (assuming PBGC's solvency).

+1

One thing that I learned about this, that wasn't obvious, is that you may be at risk during your first 3 years of retirement -- especially if you have a well funded pension plan (ie near 100%).

For a fully funded pension plan, only those that have been retirement eligible for at least 3 years can split this part of the money in a PBGC termination. Those with less than 3 years of retirement eligibility will be at the end of the line and likely only receive the PBGC minimums which are heavily discounted for age.

Suffice it to say, I was real nervous starting in March of last year when DW only had about 2 years in and the Pandemic hit and I learned this rule for the first time when checking on PBGC guarantees for her pension.


We can discuss this further in a separate thread if anyone is interested.