Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Is an extra year of w*rk worth $2700 annually?
Old 11-30-2021, 12:25 PM   #1
Full time employment: Posting here.
 
Join Date: Aug 2017
Posts: 699
Is an extra year of w*rk worth $2700 annually?

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.
badatmath is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 11-30-2021, 12:35 PM   #2
Thinks s/he gets paid by the post
 
Join Date: May 2008
Posts: 4,653
So extra $225/mo? Not worth it for me, but if you don't have a lot of padding in your budget...
tmm99 is offline   Reply With Quote
Old 11-30-2021, 12:43 PM   #3
Thinks s/he gets paid by the post
 
Join Date: Oct 2014
Posts: 1,091
It could be a finance question. It might not be. All depends. What does that extra $225/mo do for you? Is the job that bad that you can't handle 365 more days? What are you going to do on day 1 of retirement if you leave that job? Lot's of questions. Basically, it depends. Good luck with your decision.
__________________
-Big Dawg-FI since 9/2010. Failed ER in 2015. New target 202?.-

-"Blow that dough"-Robbie

" People say I'm lazy, dreaming my life away Well, they give me all kinds of advice designed to enlighten me When I tell them that I'm doing fine watching shadows on the wall "Don't you miss the big time, boy. You're no longer on the ball" -John Lennon-
Bigdawg is offline   Reply With Quote
Old 11-30-2021, 12:44 PM   #4
Full time employment: Posting here.
 
Join Date: Aug 2017
Posts: 699
Well I do have other assets, I can't live on that alone but maybe I should ask how much padding is enough? I think I have some but . . .

Well yes job is pretty bad, I was forced into it at last reorg rather than laid off. But its like 62 vs 70 for SS. But one more year could turn into 5 and well um no. . .

The good part about being single is I don't screw up anyone else's life with my (bad) choice if there is one.
badatmath is offline   Reply With Quote
Old 11-30-2021, 12:44 PM   #5
Moderator
Aerides's Avatar
 
Join Date: Nov 2015
Posts: 9,934
If $225 per month is the difference between a comfortable retirement vs. one that has worries and little wiggle room, then sure.
Aerides is offline   Reply With Quote
Old 11-30-2021, 12:45 PM   #6
Thinks s/he gets paid by the post
 
Join Date: Mar 2013
Location: Coronado
Posts: 2,761
Have you played with Firecalc? What are your odds of success without the $2700/yr?
cathy63 is offline   Reply With Quote
Old 11-30-2021, 12:48 PM   #7
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
RunningBum's Avatar
 
Join Date: Jun 2007
Posts: 11,802
If it means you're not dumpster diving for food, of course it's worth it. If it means a little less caviar, maybe not.

As someone who worked (part-time) a few years longer than needed, it's nice to have the buffer and to shrug off a bad market day like today. I'd be reluctant to retire today if I didn't have buffer. 10 years ago I couldn't know that the market would be so good to me, and now I can enjoy extras like flying first class if I want to.

Use that info however you want to.
RunningBum is offline   Reply With Quote
Old 11-30-2021, 12:51 PM   #8
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Sunset's Avatar
 
Join Date: Jul 2014
Location: Spending the Kids Inheritance and living in Chicago
Posts: 12,780
This $2,700 annually seems small, but over 30 yrs it's $81,000

That will basically pay for 2 maybe 3 cars over that time period.

If a person doesn't have much in savings, then it would be a big help.
__________________
Fortune favors the prepared mind. ... Louis Pasteur
Sunset is online now   Reply With Quote
Old 11-30-2021, 12:54 PM   #9
Dryer sheet aficionado
 
Join Date: Jul 2018
Location: San Marcos
Posts: 43
This is fundamentally a finance question and without knowing your assets, income, age, SS at FRA, and real or projected expenses, it is not even possible to hazard a guess.
dak2018 is offline   Reply With Quote
Old 11-30-2021, 12:56 PM   #10
Full time employment: Posting here.
teetee's Avatar
 
Join Date: Jul 2019
Posts: 600
I also would check firecalc. Net worth in the context is important. If you have $5m NW, $2700/yr is not as important as if you only has $500k NW plus the 23k annual income during the retirement.

It also relate to your age and how healthy you are. You can do a lot of things in a year if you are able to.
teetee is offline   Reply With Quote
Old 11-30-2021, 01:01 PM   #11
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
SecondCor521's Avatar
 
Join Date: Jun 2006
Location: Boise
Posts: 6,147
A typical work year is about 2000 hours, so an additional $2,700 is $1.35 per hour per year. If I thought I were get 10 more years of increased pension payments, then the pension increase would be an additional $13.50 per hour. If you thought you'd get more than 10 years, multiply by whatever number you think is reasonable.

Given that most pensions are taxed as ordinary income, you would escape Social Security and Medicare taxes on that $13.50 an hour. You'd still probably have federal and state income taxes, and it could push some of your Social Security income into taxability depending on your tax situation.

It's also not quite worth that $13.50 an hour, because of inflation and the fact that you'll have to wait to receive the money. How you discount based on those two factors is personal.

Then it would come down to the marginal benefit versus the marginal cost. Marginal benefit would be based on how much I needed that $13.50 an hour. Marginal cost is how much I hated the job. That's a personal decision also.

Since the math is complicated here, I'd almost go on a gut level decision. Would I stay at work another year for $2700 a year for life? My gut would probably crunch the numbers as well as my brain would.
__________________
"At times the world can seem an unfriendly and sinister place, but believe us when we say there is much more good in it than bad. All you have to do is look hard enough, and what might seem to be a series of unfortunate events, may in fact be the first steps of a journey." Violet Baudelaire.
SecondCor521 is offline   Reply With Quote
Old 11-30-2021, 01:03 PM   #12
Full time employment: Posting here.
 
Join Date: Aug 2017
Posts: 699
I suppose you are all right. Working saves me $300 a month in health care too vs retiree health.

I have a tendency to lie to firecalc in order to build that buffer. Like I rounded down (slightly) the 401k, and ignored taxable, roth and savings. But did I ask for it for enough annual income, IDK.

SecondCor, very interesting point. My point of returns diminish at 58 (due to years of service cap) and stop entirely at 62 (which I am not contemplating) . I know most of you have much greater assets than me and many believe in delaying SS so I guess I am asking myself what I am doing wrong here. . .

It will be a year until I can vacation out, if it goes as planned.

I am much better at saving the money I have then spending it.
badatmath is offline   Reply With Quote
Is an extra year of w*rk worth $2700 annually?
Old 11-30-2021, 01:04 PM   #13
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 3,698
Is an extra year of w*rk worth $2700 annually?

When I made the decision nine years ago it was for only for about $1500/year. I chose no. You have to decide for your situation .
Dash man is offline   Reply With Quote
Old 11-30-2021, 01:19 PM   #14
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,554
Quote:
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.
Is the pension going to provide most of your retirement income? If so, then I think I probably would work the extra year, since you are running things tight enough that if something goes wrong ( say an unexpected increase in expenses) you could end up in a tight spot, and that extra money could significantly impact your quality of life.

If you’ve got a bunch of other savings and this is just suspenders when you already have a belt money, than I’d skip it.

Remember that it will always be financially better to keep working, but maximizing your money ends with you dying in the harness.
Hamlet is offline   Reply With Quote
Old 11-30-2021, 01:21 PM   #15
Thinks s/he gets paid by the post
 
Join Date: Jan 2006
Posts: 4,269
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.
aaronc879 is offline   Reply With Quote
Old 11-30-2021, 01:38 PM   #16
Dryer sheet aficionado
 
Join Date: May 2014
Posts: 37
May be I am missing something, but aren't you also losing a year's worth of earning by not working another year?
CuriousJoe is offline   Reply With Quote
Old 11-30-2021, 02:25 PM   #17
Recycles dryer sheets
 
Join Date: Mar 2014
Posts: 220
Quote:
Originally Posted by Dash man View Post
When I made the decision nine years ago it was for only for about $1,500/month. I chose no. You have to decide for your situation .

Shows you different thought processes……I am planning on working another year for about $10,000 per year increase, let some $18,000 a year. That’s a big difference. I’m impressed you did it, especially 9 years ago. That’s a lot (for me) to leave in the table. I could never use the word “only” for $1500.
PandaBear is online now   Reply With Quote
Old 11-30-2021, 02:29 PM   #18
Full time employment: Posting here.
 
Join Date: Aug 2017
Posts: 699
Quote:
Originally Posted by CuriousJoe View Post
May be I am missing something, but aren't you also losing a year's worth of earning by not working another year?
Yep. It is confusing. I put 40 years in fire calc too and chances of me living to 93 are less than 1% I'm sure given that no one in my family has made it anywhere close to that long.
badatmath is offline   Reply With Quote
Old 11-30-2021, 02:30 PM   #19
Thinks s/he gets paid by the post
Dash man's Avatar
 
Join Date: Mar 2013
Location: Limerick
Posts: 3,698
Quote:
Originally Posted by PandaBear View Post
Shows you different thought processes……I am planning on working another year for about $10,000 per year increase, let some $18,000 a year. That’s a big difference. I’m impressed you did it, especially 9 years ago. That’s a lot (for me) to leave in the table. I could never use the word “only” for $1500.

I really need to start double checking my typing! 🤪 It’s supposed to say $1,500/YEAR!
Dash man is offline   Reply With Quote
Old 11-30-2021, 02:33 PM   #20
Administrator
Gumby's Avatar
 
Join Date: Apr 2006
Posts: 18,084
Quote:
Originally Posted by CuriousJoe View Post
May be I am missing something, but aren't you also losing a year's worth of earning by not working another year?
Yes, you are, and you probably should put that in the equation. Also 1 less year to fund going forward.
__________________
Living an analog life in the Digital Age.
Gumby is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
Withdrawing: annually, quarterly? seraphim FIRE and Money 22 04-28-2013 06:55 AM
Monthly or Annually ripper1 FIRE and Money 11 11-07-2011 11:38 AM
How much would it cost annually to live simply in Middlesex County (Central) New Jers nico08 FIRE and Money 8 07-21-2011 09:58 AM
Retirement withdrawls- Monthly or Annually bizlady FIRE and Money 29 06-23-2009 05:08 AM
Mighty old marijuana stash~2700 years old!! mickeyd Other topics 14 12-02-2008 10:05 PM

» Quick Links

 
All times are GMT -6. The time now is 11:32 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2022, vBulletin Solutions, Inc.