I think I need to go back to w*rk

[aaronc879]

Quote:

Originally Posted by badatmath Maybe/probably/IDK. I will look into it some more.

Are you single? Do you have a mortgage?

[daylatedollarshort]

Quote:

Originally Posted by badatmath Maybe/probably/IDK. I will look into it some more.

Once you get a tentative budget together, you could post it here or at places like the MMM forum, Reddit lean fire, and Reddit coast fire. People on some of those forums really know how to squeeze a nickel.

Reddit has a lot of cool money saving forums like eatcheapandhealthy, frugal and nobuy to name just a few. If you can cut $10K off your annual budget, over 40 years that is $400K less in total retirement funding you will need in after tax money.

[RetiredAndLovingIt]

Are you now officially laid off? If yes, have you filed for unemployment yet? They can only say no and I think you have a good case in that you had to refuse the new company offer to protect your retirement benefits. That should bring in over $300 a week for at least 26 weeks, probably longer because of your age and you may be eligible for retraining and other benefits from your state.

If I remember correctly, isn't your mortgage paid off? If so you should not need 50K a year to live on, at least for the first few years till you figure everything out.

Surely you have some idea of how much money you spend every month? If not start writing down every single penny you spend so you have an idea of how much you need.

[Al18]

1. It sounds like you are asking questions only you can answer. You should check your last year of bank statements and credit card statements online to get a better idea of how much you spend per month. Assume it will go down 10% - 20% because you’ll probably be doing less driving and dressing more casually.
2. If your bank is not paying 3.5% interest, you should open up an online savings account that does, such as Discover, Capital One or Marcus. Move at least 6 months of expenses into this bank and schedule automatic monthly transfers to go into your checking account. This is your “paycheck”.
3. Read a book, schedule a vacation or rediscover a hobby to focus your mind - you need a healthy distraction.

[eyenitnoy]

Quote:

Originally Posted by badatmath Laid off at 55, delaying pension to age 56 in 2024 ($2272/month). (Plan to live on vacation payout until then. No severance.) But I can't live on that unfortunately and I don't want to spend 401k yet as I am afraid I will run out of money. Not to say I have any clear idea when I'd start . . . I am not so fond of w*rking my real job I can be excited to go make less working somewhere else . . . But I sort of maybe have to. I do have cash savings earning very little I could use to supplement the pension or maybe even delay it further but I can't quite work out how to think of this. It doesn't feel right to spend it on something that is not urgent especially when I don't have a clear idea how much I could safely spend. Edited *27K pension in 2024, not infl. 401k 1M.

Consider moving abroad. There are many places in the world where you can live comfortably on $2272 a month. It beats working, that's for sure. And in a few years you can supplement the monthly income with your 401(k).

You'll be just fine.

[Badger]

Quote:

Originally Posted by badatmath Laid off at 55, delaying pension to age 56 in 2024 ($2272/month). (Plan to live on vacation payout until then. No severance.) But I can't live on that unfortunately and I don't want to spend 401k yet as I am afraid I will run out of money. Not to say I have any clear idea when I'd start . . . I am not so fond of w*rking my real job I can be excited to go make less working somewhere else . . . But I sort of maybe have to. I do have cash savings earning very little I could use to supplement the pension or maybe even delay it further but I can't quite work out how to think of this. It doesn't feel right to spend it on something that is not urgent especially when I don't have a clear idea how much I could safely spend. Edited *27K pension in 2024, not infl. 401k 1M.

The first question I would be asking myself is why do I need to spend this money. The next question is what are my necessary expenses and what are not and understand the difference between need and want. I was laid off at about the same age and the first thing I did was to go on a serious austerity program. Thermostat was changed so wore more clothes indoors in winter, used fan instead of air conditioning in summer, planned car driving with multiple stops, Eating out was not an option and grocery shopping was considerably more frugal (more beans, pasta, rice, less beef and more chicken/pork, etc.), entertainment was enjoying the outdoors with hiking and riding an old bike with occasional movie at reduced "first show matinee price", etc. I think you get the point.
If I was taking care of my necessary expenses and had money left over then I would be investing it for retirement. You can count on needing more backup for medical expenses once retired.

Cheers!

[Spock]

I was/am in a similar boat... "involuntary early retirement" at 55.
First off: You need to take an inventory of your financial assets (cash, savings, IRA/401K, etc) and total up "this is how much I got to live on for X years". You can this take this number to umpteen available free calculators on the web and see how much you can spend per year for those X years. The calculators are using the PMT function... it takes your total balance, an interest rate you think you're going to get, and the number of years you want it to last and will spit out a number of how much you spend every year.
To answer if you can live on that number, you need some approximation of how much you spend every year. You don't need details of what you spend it on. A crude number is to take your annual W2 income - your 401k/IRA contributions. How does that number compare to the PMT calc?
Depending on your income bracket, you'll have to decide how you're going to approach health insurance... ACA subsidy? Employer COBRA for X (18?) months?


That's the crude first steps. If the crude numbers are way off, I'd look for another job to maintain the status quo while you get a better handle on how much you need. Without knowing how much you spend a year you won't know how much you that job needs to pay.

[redraptor]

Quote:

Originally Posted by MarieIG Well, you're 55 not 75; and if you have to go back to work for a year or two while you get your affairs in order, and beef up cash reserves - it's not the worst thing in the world. The thing is - if you take another job, they can't hold you prisoner, you can always leave.

Good advice. The OP isn't ready even if it's only mentally. Gotta quit shredding bank statements for 6 months.

[target2019]

1) Look for a job. Take your time.
2) Go to bank and get a year end statement with all transactions for 2022.
3) Find a class or someone to help you enter transactions to computer program.
4) Monitor and categorize your spending.
5) Measure and monitor your income sources.
6) Track your investments monthly.

Without knowing how much you spend by month on average, or in a year, estimates will be more like guess-timates.

[aaronc879]

If you are single with no spouse or kids to support and live in a paid off house then there is no reason you NEED to go back to work. Live off your vacation payout this year then next year go on ACA, take your pension and then supplement your pension with your cash savings or a little bit out of your 401k. You have a million in your 401K so there is no reason why you can't start taking some out now. You have the pension and you will get SS in another 10 or so years. You should be just fine. Keep track of your expenses and don't spend extravagantly. Good luck.

[pb4uski]

Quote:

Originally Posted by badatmath Laid off at 55, delaying pension to age 56 in 2024 ($2272/month). (Plan to live on vacation payout until then. No severance.) But I can't live on that unfortunately and I don't want to spend 401k yet as I am afraid I will run out of money. Not to say I have any clear idea when I'd start . . . I am not so fond of w*rking my real job I can be excited to go make less working somewhere else . . . But I sort of maybe have to. I do have cash savings earning very little I could use to supplement the pension or maybe even delay it further but I can't quite work out how to think of this. It doesn't feel right to spend it on something that is not urgent especially when I don't have a clear idea how much I could safely spend. Edited *27K pension in 2024, not infl. 401k 1M.

Are you eligible for social security? If so, what does your SS statement say that your full retirement age benefit will be?

How much is in this "cash savings earning very little" that you refer to? $1,000? $100,000? $1,000,000?

You might be able to get a good idea about spending by looking at your take-home pay for a year less any savings that you did outside of your 401k... presumably any takehome pay that was not saved was spent. Or if you used savings rather than added to savings you should factor that in.

FIRECalc can solve for what you can safely spend given certain inputs. If someone had a $2,272/month or $27,264 fixed pension starting in 2024 and $1m in retirement savings in a 50/50 AA with a 45 year time horizon (to age 100) then FIRECalc indicates they could safely spend $47,368 a year in 2023 dollars. If you have social security coming to you it would be even more. And if you are interested in doing some part-time work that would be even more.

Once you stop working, you can focus a couple months on assessing whether you can retire or not and if you can't then look for work.

[TheWizard]

I'm not sure what bank statements have to do with anything when it comes to understanding what you're spending money on.
Perhaps combined with CC statements you can fill in the blanks on how much went to certain categories.

You can also take a top down approach: $100k gross annual income, minus $20k going to 401(k) and Roth IRA, minus $10k going to savings/taxable account, means you spent $70k for the year (including taxes).
So you would need to replace most of that $70k in this example...

[Toocold]

If you spend $100k/year, you should go back to work. If you spend $15k/year, you don't need to go back to work. If you don't know how much you spend/will spend, it's impossible to tell you.

[badatmath]

Single, yes.
Mortgage, no.
Not officially over
Defintiely some expenese will go up in retirement - medical, gas (currently WFH)
Retiree medical, no ACA
With all due respect for the people who think a/c is a luxury, I am not one of them. People die here in summer with no a/c. . . (AZ).
SS, yes ~ 2K at 62 if I assume no more w*rk. Never crossed my mind to wait, people in my family die young.
~125K cash just sitting there. Al18 was correct I should move savings for more interest.
Wondering if I can make better use of cash to delay pension another year to 2025

[pacergal]

-Start tracking every penny you are spending now--even go so far as to keep a little notebook with you so you don't forget.
-Do figure out how to get monthly statements from bank, credit company, credit union to start a look back for 6-12 months.
-Do file for unemployment. The worse thing would be they say no. You won't know until you try.
-Give yourself permission to spend from that savings for a month or two to decompress from your toxic work, to gather some info, refresh and relax. Then reassess if you need to go back to work. Maybe you need only part time? 55 is still young, there are lots of jobs out there and employers looking for folks. Perhaps look at something totally different than what you are doing.

[latexman]

Quote:

Originally Posted by badatmath Not officially over - what does this mean? ~125K cash just sitting there - where is it sitting?

I’d get most of that cash in a money market fund Monday/ASAP. MM’s are making between 4-5% now and they will probably go higher this year. It’s a no-brainer.

[Go-NoGo]

I found a budget worksheet to be quite helpful when I first started to plan for retirement to help me ballpark how much I was spending each month (or year). I followed up with downloading credit card end of year summaries to see if they were more or less the same.

It might be useful to you estimate what your current expenses are:

https://www.tiaa.org/public/pdf/tc_l..._worksheet.pdf
(BTW the file name has nothing to do with life insurance - don't be put off by the name)

[Fermion]

Quote:

Originally Posted by badatmath Single, yes. Mortgage, no. Not officially over Defintiely some expenese will go up in retirement - medical, gas (currently WFH) Retiree medical, no ACA With all due respect for the people who think a/c is a luxury, I am not one of them. People die here in summer with no a/c. . . (AZ). SS, yes ~ 2K at 62 if I assume no more w*rk. Never crossed my mind to wait, people in my family die young. ~125K cash just sitting there. Al18 was correct I should move savings for more interest. Wondering if I can make better use of cash to delay pension another year to 2025

How much is retiree medical? ACA can be free if you meet the income requirements, although being single and having at least $2300 a month coming in, I guess you would not get a full ride. That is the one benefit I guess of not having a pension. We are able to adjust our income to whatever level we need it to be.

[badatmath]

latexman - not officially over means I am still getting paid a couple more weeks though it hardly feels like it because I upped the 401k deduction.

Cash is earning under 2% in a "real" ie not online bank.

[Spock]

A couple of comments on unemployment:
1. I think you mentioned no severance pay, but the vacation pay might be taxable. It's been a couple of years so you'll have to check for yourself, but for me I waited to start unemployment until Dec of the year I got laid off (May 31st). That way most of the unemployment benefits went on the following years taxes (and the 0% tax bracket).
I think there was a 6 month time limit to start is why I started in Dec instead of Jan of the following year.
2. AZ unemployment is capped at $240/week. They say it's 50% of your prior wages, but the cap makes it less than minimum wage.