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Old 11-30-2021, 01:58 PM   #21
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If your pension is only 23K. . .

I'm trying not to ask a finance question so leaving out my other assets, more of a way to think about it being the "right" thing or not.

Probably not making a lot of sense but you folks always make me think.
As other have said, it all depends on how much "padding" you have in your other assets, and whether or not the additional $225/month is worth it.

In theory I could have retired at 54, but it would have been a basic retirement. Every additional year until I turned 60 would add over $2K annually to my pension and push it where it alone would cover our basic expenses. In addition, that gave us additional years to save and invest.


I like my job so the additional years were not a burden (and gave us time to better refine my retirement plan). But after age, 60 the pension would only grow about $800 a year to age 65. At age 60 I had plenty of "padding" in cash, investments, and future SS to support an extravagant (in our terms) retirement. Forgoing any additional pension growth (and salary) was an easy choice at that point.
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Old 11-30-2021, 02:09 PM   #22
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A couple of other points - it's not just the pension:

You add one year of savings to everything else
You reduce one year of the span your retirement needs to cover
You reduce one year of pre-medicare health care needs
You retire one year closer to your SS timing

If all those add up to way over the $2700 difference, great. But all of that is also the OMY trap.

Once you get to numbers where you can look at all that and go "i don't care, I'm confident and happy in my numbers", then you're good.
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Old 11-30-2021, 02:15 PM   #23
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One year? I'd tough it out. You have no need to remain in anyone's good graces. Be a Wally for 12 months. Or at least be your own person. What are they going to do, nudge you into retirement?

There are employers so ruthless that they'd sh!tcan you with an aim to keep pension costs down. It's up to you to determine whether your employer falls into that category.
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Old 11-30-2021, 02:16 PM   #24
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What's you life style like?

For some an extra $225 a month allows for weekly meetings with friends for lunch, maybe even buying a little something for the grand kids from time to time.

For others, $225 wouldn't cover the cost of a few shots of their high-end important brandy.
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Old 11-30-2021, 02:41 PM   #25
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Too many variables unique to each persons situation to give a definite answer. I would be able to live happily on a $23K/yr pension so I would not consider working another year. Most people want more than that. You have to choose what is best for your personal situation.
Me too. I would do a dance for a 23k pension but many would not. I would run out the door. Just remember I heard one poster say you always leave money on the table. So true.
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Old 11-30-2021, 03:02 PM   #26
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Originally Posted by badatmath View Post
If your pension is only 23K. . .

I'm trying not to ask a finance question so leaving out my other assets, more of a way to think about it being the "right" thing or not.

Probably not making a lot of sense but you folks always make me think.
Sounds to me like $2700/year + one year of income + one year of not spending from savings = Is it worth my time given up?
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Old 11-30-2021, 03:57 PM   #27
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Originally Posted by badatmath View Post
If your pension is only 23K. . .

I'm trying not to ask a finance question so leaving out my other assets, more of a way to think about it being the "right" thing or not.

Probably not making a lot of sense but you folks always make me think.
For me, no, another year of work is not worth $2,700 annually. I think the question is not well formed because there're are a lot of other considerations, as mentioned above.

A very lean retirement (if possible) with only $500,000 to draw from (ignoring SS) has the $2,700 annual increase equivalent to just 0.5% growth on that $500,000. In this situation another year of work is necessary because there likely isn't enough saved to meet spending. So it depends on your spending too.

Good Luck.
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Old 11-30-2021, 04:14 PM   #28
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Again, without knowing your age/assets/expenses it's a guessing game. Your asking the question, though, makes it sound like that $2300 could be a big help. And, as mentioned by another, putting in that extra year means one less year of drawing down your assets.
It sounds to me that you should do your best to tough it out for another year. In that year, be a 9-5er, no extra "volunteer" work for the boss, dot your i's and cross your t's and just do your job, nothing extra. Who knows, Providence may shine down on you and your employer lays you off or offers a package!
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Old 11-30-2021, 04:21 PM   #29
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I would ask myself also how could I reduce my expenses annually by the amount of that amount.

Can I downsize my dwelling? IE sell a house in the city, and buy a mile out of town. Sell a house, get a condo or a manufactured house (saw you are in AZ) and know some of the park model homes are ok and inexpensive to live in.

Maybe you want to vagabond for a year and live very frugally while the nest egg increases? IE cook your baked potato on the manifold of your car. lol

I believe Robert Kiosaki said in one of his books," I never say I can't afford something; I just have to figure out how to finance it."
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Old 11-30-2021, 04:43 PM   #30
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Maybe you want to vagabond for a year and live very frugally while the nest egg increases? IE cook your baked potato on the manifold of your car. lol
haha definitely not. I need to work the year plus just to make 55 so it might be more clear by then.
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Old 11-30-2021, 04:49 PM   #31
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This is the sort of thing I'm thinking about every year. lol I was pretty certain 2022 was going to be the year to retire until high inflation broke out and prices started soaring. Now, I'm not sure, so I'm just not getting my hopes up and prepared to work another year to help compensate for the higher prices.
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Old 11-30-2021, 05:28 PM   #32
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If you feel that you have less money than time left on this earth, then keep working. If you feel that you have more money than time remaining, then quit your job.
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Old 11-30-2021, 06:56 PM   #33
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May be I am missing something, but aren't you also losing a year's worth of earning by not working another year?
+1

I would hate to figure out the earned income I forfeited by stop working at 55 instead of hang on till 65. And to think of that money compounded by the market return.

But then, I remember that when I was in the hospital recovering from 2 major surgeries to treat something that could have killed me, I did not think of that forfeited money at all.

PS. But I will admit that on the hospital bed, I did reach for my laptop to check my portfolio balance.

Of course, I cared, because I knew I would not be going back to work, and I counted on that money to live on, now that I was not going to die.
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Old 11-30-2021, 07:09 PM   #34
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A couple of other points - it's not just the pension:

You add one year of savings to everything else
You reduce one year of the span your retirement needs to cover
You reduce one year of pre-medicare health care needs
You retire one year closer to your SS timing

If all those add up to way over the $2700 difference, great. But all of that is also the OMY trap.

Once you get to numbers where you can look at all that and go "i don't care, I'm confident and happy in my numbers", then you're good.
I agree, it doesn't make sense to me for the OP to be focusing on the pension bit, surely the effects of working and saving for a year instead of spending down the portfolio are more important than the pension increase. The pension bump is just the cherry on top.
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Old 11-30-2021, 07:19 PM   #35
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For me, working one more year would have been something like another $7k in my Roth IRA, another $24k in my supplemental 403(b), and another $40k+ in my main 403(b) including employer contribution.

So you need to look at the whole picture, not just a fragment...
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Old 11-30-2021, 07:25 PM   #36
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Another year increase your pension. Have you thought that in addition, another year of income adds to your personal retirement accounts, reduces the number of years your retirement accounts will have to support you, and may increase you SS benefits too.

I know you don't want to go into financial discussion. You do the math and see where it takes you. My point is, another years in not simply just the pension. It is a question that should have a wider view.
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Old 11-30-2021, 07:32 PM   #37
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at that retirement income level, the extra $225 per month can make the payment on a used car.
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Old 12-01-2021, 06:02 AM   #38
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I left a fair amount of money on the table. The pension was pretty much maxed out, but it was clear we would soon have a package for retirement. I guessed about 2 years when I left.

When my j*b assignment changed (from enjoyable to horrible) I left the next week. Sure enough, the package came along 18 months later. Do I regret the decision. Well, I admit that I did regret it - for about 30 seconds. I didn't need the money and you can not ever buy back a year and a half of life - at any price.

If you really need the money, stay. If not, consider FIREing yourself. It has to be up to you because YMMV.
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Old 12-01-2021, 07:13 AM   #39
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Our combined pensions are 2/3 your $2700. Should we have worked longer? We both could have but neither of us think we would have. We are happy with our financial situation and an increase in pension would not have made a difference. But that is us. How would you answer your question?


Cheers!
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Old 12-01-2021, 07:42 AM   #40
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For me, the quick answer would be that no, one more year of my life spent working is not worth another $2700 annually. But, there's more to it than just that. As others have mentioned, working an extra year means one less year of retirement you have to fund. And one more year that your investments can grow, as you're not tapping into them yet. And the added bonus of one more year of continued investments, if you're still putting money away into an IRA, 401k, or even an after-tax account. Then there's health insurance. If your company is currently paying your health insurance, that's a bill you're going to have to pick up, unless you're old enough to go on Medicare. But even there, there's gap insurance. Also, if you're expecting to receive SS, an extra year of work will increase that payout if you're replacing a low-paying year or a "zero" year with a year's worth of higher wages, for their calculations.
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