Traditional Pensions

[cnocmmz]

Hi I am updating a post that was over 177 days old.

Hi new to this group and thought I would chime in a little here, just because I can
So, I see a lot of folks have over 1M in accumulated wealth. I just asking and wondering here. I am 55 yrs old in July, we will have two guaranteed monthly pensions that total about 4,500 (COLAd!) and presently have about 500K in annuities (should be over 600K by 60), 401Ks, and a little cash. Would like to retire at age 60 but not sure if we can? Only one major bill will be a 1,600 monthly mortgage. Any thoughts out there. (I am sure there are)
Thanks in advance

Update: I realize that traditional pensions are slowly going away and being replaced by 401K's and for of us that did not make a large salary as i have seen on these posts, one must really sock it away. That being said, my dad was right all those years ago, It is not how much your salary really (it helps), it is more so what you actually SAVE.
So on that note, I wanted to give you all an update to my last post on this subject.
The correction is that we will have 3 cola'd monthly pensions totaling after taxes about $6200.00. When DW starts here SS next year it will be about $7K
Background:
DW is 64
me 58 this year
DW is retiring next April at age 65
I will now retire Jan 2020

-Actual Expenses are about 3K. Although with fluff for travel, eating out and emergency bucket, etc more realistic at 5K
-health care no real issue. Retired military so maybe $500.00 annually payment.

investments/cash as of April 2018: 850K
401K's: $580K
small annuity: $ 158K mostly to help supplament for long term care
Cash: $100K

Firecalc puts us at 100% even leaving funds for Aires lol. Looking forward to any and all comments
thanks

 

[Hermit]

Hi I am updating a post that was over 177 days old.




Update: I realize that traditional pensions are slowly going away and being replaced by 401K's and for of us that did not make a large salary as i have seen on these posts, one must really sock it away. That being said, my dad was right all those years ago, It is not how much your salary really (it helps), it is more so what you actually SAVE.
So on that note, I wanted to give you all an update to my last post on this subject.
The correction is that we will have 3 cola'd monthly pensions totaling after taxes about $6200.00. When DW starts here SS next year it will be about $7K
Background:
DW is 64
me 58 this year
DW is retiring next April at age 65
I will now retire Jan 2020

-Actual Expenses are about 3K. Although with fluff for travel, eating out and emergency bucket, etc more realistic at 5K
-health care no real issue. Retired military so maybe $500.00 annually payment.

investments/cash as of April 2018: 850K
401K's: $580K
small annuity: $ 158K mostly to help supplament for long term care
Cash: $100K

Firecalc puts us at 100% even leaving funds for Aires lol. Looking forward to any and all comments
thanks

If your numbers are accurate, you are good to go whenever you want to. (I am assuming monthly income numbers with the exception of DW's SS which is an annual number.) If you want to do some major travel, or something else that will increase your expenses, then stick to your plan. Have you done a detailed analysis of your planned expenses once you retire? - No work expenses including the commute. No retirement contribution expenses, etc.

 

[cnocmmz]

first let me say excuse my typing skills, only have left hand for another 2 weeks because I just had shoulder surgery yesterday...lol
To answer your question Yes, monthly; however, made a mistake with original pension incomes, should have been $6,700 after taxes...with DW's SS it will bring monthly income to $7,400.00.
I am just waiting to retire from Civil Service to get my 10 years in, which will be $500.00 monthly and does factor in the above calculations... Could still walk away and just wait until 62yrs old to collect my pension if i do not have 10 years in... The $500.00 is not a lot of $$$ but it could help with play money lol. Once I apply for my SS at 62 ($1,500) or later (depending what happens in that realm, there are already discussions of folks only being able to collect 75% of what is owed ALL OF US so we will see)?
So it seems at 59 years old DW and I should have almost $90K annually after taxes, and age 62 (if i decide to take it then) should jump to over $105K Net annually.
We have had some discussion of paying off the home, once i retire in Jan 2020, still owe 190K. Even with Annual 20K for mortgage, still leaves us with over 80K annually before tapping into investments at 2.5%
thanks for the response, looking forward to all of smart folks out there in case i have forgotten something.

 

[jazz4cash]

Have you been to a retirement workshop designed specifically for Federal employees?

I went to one with DW and it was quite an eye-opener. Out of 60 people attending, I think everyone learned something valuable, even the folks that thought they were well prepared learned something. Several folks said they had attended seminars before, but they were nothing like this one. This is especially true for people with combined military/civilian service, Law Enforcement, etc. This link is for the DC area, but I'm pretty sure they have presentations nationwide and you can get leave to attend.

Federal Retirement Impact Workshop

Disclosure: The seminar I attended was "hosted" by a local investment advisory firm, but the presentation is done by ProFeds, a federal contractor.

 

[bizlady]

"Even with Annual 20K for mortgage, still leaves us with over 80K annually"

Assuming you have figured health care expenses for yourself and taxes figured in....I know you say health care no real health care issues, but not sure if you are saying your health or your insurance.

Also, you indicate in your first post that expenses are 3k a month (36k annually) and in your second post indicate mortgage is 20k a year. That would leave 16k a year for everything else. You have plenty of resources, just be sure you have a good handle on expenses

 

[cnocmmz]

Yes

 

[exnavynuke]

Without your $500/month 10 year vesting "extra", You'll have $6,900/month in pension income to cover your estimated $5k/month spending.

That of course doesn't include the $850k you have in investments, which could reliably generate another $2,833/month at a 4% SWR. Adding that in, you could relatively safely have $9,733/month to cover your $5k/month spending if you retired today.

2+ years of more work just to generate money you don't have any need for seems like an unfortunate way to spend two years imo.

 

[cnocmmz]

Yeah agree..... the nice thing is we have options lol, plus this gives us more time to fill up buckets for travel, home Maintennance, etc... I normally keep 8-10k in home Maintennance and same for travel bucket anyway(not counting the 100k in cash).
I guess truthfully would like to see our total hit 1-M prior to Jan 2020, needed or not.....lol

 

[cnocmmz]

Hi bizlady,
Yes, that is the cost of tricare insurance �� thank you for your input. Having a guaranteed steady stream of income really helps....we are truly blessed!

 

[Teacher Terry]

i would go now. I have lost 3 friends between 59-67 and since you have enough $ I would not take any chances. I would start traveling and having fun. You should enjoy while you both are healthy.

 

[CardsFan]

i would go now. I have lost 3 friends between 59-67 and since you have enough $ I would not take any chances. I would start traveling and having fun. You should enjoy while you both are healthy.

I tend to agree with this, but we all have our emotional reasons to do OMY. I could have gone 2 years earlier, but I didn't hate my job (anymore, after a transfer), and the extra security felt good.

What we DID do, about 4 years out, was to treat ourselves to nicer, more frequent vacations. I also ended the extra office hours. They only got a "soft" 8 when I was in the office, to make up for the 24/7 when I traveled. Ironically, the largest bonuses I ever got came after I made this change!

 

[Dash man]

Take a month and go fishing. If you still have a job when you get back, tell them you’re going on vacation for a month to tour Europe. If you still have a job when you get back, give them three months notice. In three months show up to turn in your things.

 

[cnocmmz]

"Even with Annual 20K for mortgage, still leaves us with over 80K annually"

Assuming you have figured health care expenses for yourself and taxes figured in....I know you say health care no real health care issues, but not sure if you are saying your health or your insurance.

Also, you indicate in your first post that expenses are 3k a month (36k annually) and in your second post indicate mortgage is 20k a year. That would leave 16k a year for everything else. You have plenty of resources, just be sure you have a good handle on expenses

Yes, 3K would just cover essentials, Mortgage, Food, Car insurance Electric, Gas etc. We plan on doing some traveling and so, I am planning on spending 6-7K monthly, hopefully without touching investments till we need to take RMD's. We will also spend 3 months overseas during the cold months in VA...Cost of living is cheaper in in Asia.

 

[Midpack]

i would go now. I have lost 3 friends between 59-67 and since you have enough $ I would not take any chances. I would start traveling and having fun. You should enjoy while you both are healthy.

This is trotted out here too often but having “lost 3 friends between 59-67” is not in itself a reason to retire. It’s an exception if you simply look at the overall longevity probabilities. Unless you know for sure your life may be cut short (existing poor health, family history), you have to plan on what’s probable. Planning on going young and living to 90+ could make for a long miserable retirement...

 

[cnocmmz]

Midpack I see by your profile that you retired in Jun 2011 at age 57.
I tend to agree with you that looking at the future is much more realistic and, with Medical advances, population will live in their 90+'s.
Our income stream (90K) should be relatively safe (U.S. Gov), then if I take my SS early brings income over 100K annually without investments. We will need to think about tax implications. One thought is to roll over to IRA and then Roth and pay the tax now?
The good thing is that 23K of the 90K income is not taxable(disability).
A lot to consider I guess. The last issue is to decide if we should pay off the home, still owe 190K?

 

[kimcdougc]

If the interest is relatively low, I would not pay off the house. Just my 2 cents. I too would go ahead and retire. You can't get that time back. Good luck with whatever you decide.

 

[cnocmmz]

If the interest is relatively low, I would not pay off the house. Just my 2 cents. I too would go ahead and retire. You can't get that time back. Good luck with whatever you decide.

Kincdougc
Thanks for the feedback, we were thinking the same, although having the home paid off does make one sleep better[emoji23]