DayDreaming
Full time employment: Posting here.
- Joined
- Jan 19, 2008
- Messages
- 848
Hi, I'm looking for a sanity check to see if my thinking on this is correct:
I've been FIREed since 2008 and living off of my savings + a small income from a hobby of mine. Thanks to the market rebound, my total savings are greater now than they were in 2008.
I'll be 55 soon and can start collecting a non-COLA pension which would give me $43,556/year. Or I could get a lump sum of $703,293.
At 55 my pension is reduced. I could wait until age 60 to get the full pension value of $54,445/year (or $804,364 lump sum).
1st decision: I think should start collecting my pension at age 55 instead of 60. Even though it is reduced, collecting that money for 5 more years more than makes up for the reduced amount. Age 79 is the break even point if I figured that correctly, where I might have been better off if I had stared the pension at 60.
2nd decision: Since I'm doing fine living off my savings now, I really don't need the income from the pension right now. So if I delay taking it for a few more years, I have some tax advantages of having a pretty low income - bigger ACA subsidy, and reduced property tax. But passing up $43,556/year just to save a bit on taxes doesn't make too much sense to me. Seems I may as well take it, invest some, and start giving more to charity. Or start living large, although that's never been my style.
Basically, I'm in good shape financially and I know that's great problem to have - I'm just hesitant to start taking the pension at 55 because once I do that there's no going back and I just want to see if I'm missing anything here. Any comments or critiques are more than welcome.
I've been FIREed since 2008 and living off of my savings + a small income from a hobby of mine. Thanks to the market rebound, my total savings are greater now than they were in 2008.
I'll be 55 soon and can start collecting a non-COLA pension which would give me $43,556/year. Or I could get a lump sum of $703,293.
At 55 my pension is reduced. I could wait until age 60 to get the full pension value of $54,445/year (or $804,364 lump sum).
1st decision: I think should start collecting my pension at age 55 instead of 60. Even though it is reduced, collecting that money for 5 more years more than makes up for the reduced amount. Age 79 is the break even point if I figured that correctly, where I might have been better off if I had stared the pension at 60.
2nd decision: Since I'm doing fine living off my savings now, I really don't need the income from the pension right now. So if I delay taking it for a few more years, I have some tax advantages of having a pretty low income - bigger ACA subsidy, and reduced property tax. But passing up $43,556/year just to save a bit on taxes doesn't make too much sense to me. Seems I may as well take it, invest some, and start giving more to charity. Or start living large, although that's never been my style.
Basically, I'm in good shape financially and I know that's great problem to have - I'm just hesitant to start taking the pension at 55 because once I do that there's no going back and I just want to see if I'm missing anything here. Any comments or critiques are more than welcome.