Can/Should I Retire Today or in 6 Years?

[Koolau]

I may have been in a similar situation back in 2012, when I first joined this forum (almost exactly 9 years ago, wow!) and started a "should I retire now?" thread. My Megacorp had put on the table an early-retirement offer that I was eligible for.

<SNIP>

My good buddy from w*rk had to make that decision - to stay or go with a "package." I wasn't old enough to be in the mix. My buddy (the one who is NOW half a million in debt at age 76!) didn't really want to go because they were paying him an almost obscene amount of money for the w*rk they demanded of him. It was enough to meet his life-style and even build up (IIRC) almost $20K in his 401(k) (don't know whether to laugh or cry at that! ). His pension would be "sweetened" a bit, he'd get some "cash" as well. He could also "borrow" some pension (lower his pension when SS kicked in at 62.) I think they called it something like "pension smoothing."

So Megacorp sent some "big boys" down to the plant site to sit in a room with the couple hundred eligible "packagees." Buddy described the dire warnings of management. "We don't know WHAT will happen to the company of you guys don't take the package. For certain, it WON'T be offered later if the decision comes down that we didn't get enough folks to take it. So you can leave now WITH the package or HOPE you don't have to leave - but definitely with OUT a package in 6 months. It's YOUR choice."

Stuff always leaks out and we knew that over 90% of eligible took the package - the "boys" were good at their scare tactics. What leaked out 6 months later - and we already knew it by experience, was that the "boys" were hoping for 75% participation. Because so many folks "rabbited" we were left critically SHORT of w*rkers in critical technical positions. Those of us who knew the science had to learn how to actually "do" the w*rk and fill in for years to come - Good news to the company was: WE were on salary, not hourly. The extra w*rk was "free" to Megacorp. Of course, nothing is truly free and Megacorp lost the loyalty of a lot of folks who used to sing the company song (you know what I mean) whenever someone whined about w*rking there. Nothing was ever the same again. YMMV

 

[KingOfTheCheapos]

I also noted mention of "we" and "our" but no plan for the partner/ spouse.

Fair point. I didn't want to complicate it but if we add my spouse into the mix then:

Retire Now: No pension and $1000 a month SS for them.
Retire in Six years: $2K a month pension and $1500 a month SS.

 

[eytonxav]

It looks to me like it's a no brainer for you to go now, but I would just advise making sure you know how you will spend your time in early retirement compared against how much you still enjoy your job.

 

[ivinsfan]

Fair point. I didn't want to complicate it but if we add my spouse into the mix then:

Retire Now: No pension and $1000 a month SS for them.
Retire in Six years: $2K a month pension and $1500 a month SS.

How does adding your spouse complicate it? It's important to make sure the last one standing will be OK money wise. For example your pension, it is 100% survivor, no survivor or somewhere in between?

 

[KingOfTheCheapos]

How does adding your spouse complicate it? It's important to make sure the last one standing will be OK money wise. For example your pension, it is 100% survivor, no survivor or somewhere in between?

Because you need to consider things like survivor benefits! We are both the same age and in same health (good).

If it helps my pension has a 25% survivor benefit for spouse and for children.
As my first spouse she gets all my SS.

 

[RetMD21]

$2.7M available in funds to spend
$60k expenses, minus the $24k pension, so you need $36k.

Do you like your job? Because you don't need it.

I think "can I retire" is easier to answer than "should I retire"

 

[KingOfTheCheapos]

I think "can I retire" is easier to answer than "should I retire"

Precisely, because retiring early means leaving $30K a year on the table in terms of retirement pension income and probably another $500K plus in disposable income.

I've been thinking what would that extra pension and disposable income get me in terms of really changing my lifestyle.

 

[ivinsfan]

Because you need to consider things like survivor benefits! We are both the same age and in same health (good).

If it helps my pension has a 25% survivor benefit for spouse and for children.
As my first spouse she gets all my SS.

That's a really low survivor benefit for someone your age....say you die one SS check goes away and the pension income is cut by 75%..

 

[RetMD21]

I've been thinking what would that extra pension and disposable income get me in terms of really changing my lifestyle.

If the work is miserable it makes the decision easier. I stayed on longer than needed because I liked most aspects of working but I don't really have a use for the "extra" money. I probably should have retired and worked as a part time temp.

 

[MarieIG]

Fair point. I didn't want to complicate it but if we add my spouse into the mix then:

Retire Now: No pension and $1000 a month SS for them.
Retire in Six years: $2K a month pension and $1500 a month SS.

https://www.early-retirement.org/fo...-answer-before-asking-can-i-retire-69999.html

Certainly you have done a good job saving, but:

Is you spouse financially savvy, or does she just follow your lead? How would she react with no income if the market takes a big hit?

I have never heard of a benefit below 50%, without the spouse signing a waiver. Is there a higher benefit available?

What happens to the health insurance if you die first. Does your spouse need to take extra from savings to pay for it, or does she loose it altogether?

I suspect 60k a year in expenses is a tad low, with a million in real estate (can we say new roof, AC, boiler, tree needs to be removed, etc.); you do have cars; and you want to travel.

The education of the kiddos appears to be well funded. (There may be costs involved with them outside the scope of education, which at this point you are not considering, however when the time comes, you may wish to fund.)

Just because you both are in good health does not mean something won't happen to cut that short. If she goes first, your financial picture is only very minimally effected; but that does not appear to be the case for your spouse. There was a thread not too long ago about a hubby who fell off a ladder; and his wife who trusted him and signed a pension waiver, didn't have income to support the household. Now, your spouse certainly would not be destitute, but she deserves the same consideration that you would give yourself.

In the event my DH passed and didn't make arrangements for me to receive his pension, I would not be able to continue his health insurance. Now, in our case there is a very good chance that I ]will go first; but DH wanted me to be at ease so bit the bullet with the 100% joint and survivor - not withstanding savings. With my DH - I do have a small annuity (100% joint and survivor). BTW, in light of low interest rates I am not recommending one - but I would not buy (another) one that was not 100% joint and survivor.)

 

[2cheap2eat]

Your defy good to go numbers-wise. Have you factored in growth in your portfolio? Even if conservatively invested, seems like your portfolio will continue to grow nicely.

Also, your investment home should raise in value over time. Worst case, you can sell it or take a loan on it, if you get in a serious bind.