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badatmath · 03-04-2023, 04:46 PM

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.

Teacher Terry · 03-04-2023, 05:01 PM

You need to get a good understanding of how much money you spend yearly in order to determine if you can live off the interest from your 401k until your pension starts or the combination of both once it does start. I would look back at your bank statements for the past two years.

aja8888 · 03-04-2023, 05:06 PM

If you are worried about how to live on a small amount of income at 55 years old, you really need to worry about what's going to happen when you are 10 - 15 years older. Inflation will eat you alive.

badatmath · 03-04-2023, 05:21 PM

TT - Yeah no bank statements. Shredded. Had this been planned of course I would have been paying attention but well so much for that.

Aja8888 - Well once I am older I have 401k and SS to add to the pension. But you aren't wrong.

Teacher Terry · 03-04-2023, 05:24 PM

You can look at your bank statements online. For some reason I was thinking you could use your 401k at 55 but it’s probably 59 and a half.

disneysteve · 03-04-2023, 05:24 PM

Quote:

Originally Posted by badatmath

TT - Yeah no bank statements. Shredded.

They should be available online. I can pull up my bank statements going back to 2016.

RetiredAt49 · 03-04-2023, 05:27 PM

Quote:

Originally Posted by badatmath

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.

If I’m reading your post correctly… you are 56 now so you can’t touch your 401k until you’re 59.5 unless you want to pay a penalty.

badatmath · 03-04-2023, 05:28 PM

IDK I don't use online banking for my checking - I can look. Savings has not gone down because I have not touched it since 2012. I have to remind them every year I am not dead.

badatmath · 03-04-2023, 05:29 PM

I am 55, but I can use the rule of 55 to take it out of 401k should I choose. But i did not plan to touch it. I am only considering going back to w*rk or using cash (so far). This pretty much changes day to day mind you. I had once thought I'd leave at 55 but with my 401k down so much and expenses up, I would not have done so.

disneysteve · 03-04-2023, 05:33 PM

Really not enough information here to give any useful advice. You need to sit down and run the numbers with firecalc to see if what you have will support what you need. If not, what's the gap that you need to make up with paid employment? If it's relatively small, you may not need to find a new full time position. Something part time or even a fun side gig might do the trick.

stephenson · 03-04-2023, 05:39 PM

A bit confusing ... did you have non-IRA investments in equities? What was you non-IRA investment ratio?

At 55 online banking and investing fits your gen ... you weren't doing this? Paper statements via USPS?

badatmath · 03-04-2023, 05:44 PM

Quote:

Originally Posted by stephenson

A bit confusing ... did you have non-IRA investments in equities? What was you non-IRA investment ratio?

At 55 online banking and investing fits your gen ... you weren't doing this? Paper statements via USPS?

Didn't understand the first question.

But yes paper statements via USPS. . .Which are shredded each month when I look at them.

I think we already know I can't serve as a good example of what to do - more like a horrible warning - but a little late to change that now.

Edited to add - I guess I want permission to spend the money in the savings account. Or how much to spend anyway until I start taking 401k or SS or pension or . . .

daylatedollarshort · 03-04-2023, 05:51 PM

Quote:

Originally Posted by badatmath

TT - Yeah no bank statements. Shredded. Had this been planned of course I would have been paying attention but well so much for that.

We used the Consumer Expenditure Survey (https://www.bls.gov/cex/tables.htm) as a base for our retirement budget planning. What you spent in the past doesn't matter at this point as much as what plan to spend going forward. We had a lot of fat and waste in our working years budget so after a good long review we figured out we could live well on a lot less in retirement. When we were working we had to hire out a lot of services we could easily do ourselves once retired; ordered carry out often because we didn't have time to cook; didn't have time to price shop Internet, insurance and cell phone bills every year, etc.

Once you have a good idea of your expenses you can run your numbers through a few different retirement planners. That should give you a good feel for how much you can spend safely from your savings each year.

**MarieIG** · 03-04-2023, 05:52 PM

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.

Dtail · 03-04-2023, 06:02 PM

Have you using Firecalc, or if you are willing to, provide us with the relevant financial information and we can plug it in to get a first look at where you really are financially.

badatmath · 03-04-2023, 06:04 PM

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.

I have cash. I just don't know if I can or should spend it. . . . or how much of it I need to keep around for "later".

I will have to see how it goes I guess. My retirement expenses will be higher than current due to higher medical and I might actually have to drive the car if i was not WFH. . . .and I assume free time will make me want to spend more on entertainment.

badatmath · 03-04-2023, 06:46 PM

Quote:

Originally Posted by Dtail

59Have you using Firecalc, or if you are willing to, provide us with the relevant financial information and we can plug it in to get a first look at where you really are financially.

Not really smart enough I guess. I do not see a way to say "spend cash and delay pension until you hit $X" or "you can live on pension + cash until age X at which time we add your 401k giving you a 95% chance of not running out if you spend $Y.

I appreciate everyone trying to help. Thank you.

I looked at the charts so kindly provided above and am not sure how close they are to what I spend but I won't have that much so that probably means I don't have enough.

Edited to add - I had a recent thread here https://www.early-retirement.org/for...ar-116970.html where we determined delaying pension until 2024 by living off vacation payout would possibly/probably work.

I could spend cash savings possibly until until 2025 to get 2451/mo or 2026 to get 2626/mo but that requires actually touching existing cash and I am not sure that is a great plan. There is really no place I can imagine myself taking 401k now since it would make me lose sleep.

Fermion · 03-04-2023, 07:03 PM

How much do you need to live?

1M 401K will throw off 50k a year right now 100% guaranteed in treasury bonds. You could put half of it in treasuries yielding 5% and get 25k a year, put the other half in S&P500. In 2024 you would have 52k to live on, would that be enough?

copyright1997reloaded · 03-04-2023, 07:06 PM

OP -
If you don't have a good grasp on your spending over the last couple years, you are flying blind...and that can be very scary especially after getting laid off.

Take a breath, and take some time to go over your expenses. Get registered so you can look online, look at your check register, or get with the bank to see if you can get access to statement images at the bank for no/low fee. Do the same with credit cards and other known expenses like property taxes.

I would also look at things in terms of necessary expenses and optional expenses. I did this long ago (and still do) as a way of saying "If things went bad, how can I cut back". MOST people have a bunch of things they pay for that aren't really necessary.

Just KNOWING that you can cut back $X/year if needed provides a sense of relief. Again, especially after a "laid off" kind of event for which if it is your first time can cause a bit of panic.