That's smart! Thanks for the idea.+1 but mine is $1,500/month. I set my federal tax withholdings from this one pension to cover our annual federal income tax bill so I don't have to make estimated payments and the remainder goes into checking.
That's smart! Thanks for the idea.+1 but mine is $1,500/month. I set my federal tax withholdings from this one pension to cover our annual federal income tax bill so I don't have to make estimated payments and the remainder goes into checking.
Yes and that detail has provided a tightrope for me to walk. I can stay in longer increase my pension increase my taxable income. The downside is DW's retirement is all in 401ks and 403bs. Should she survive me she's going to be facing a tremendous tax torpedo. I'm really going to stick to my guns so that we have a good 7 years between retirement and taking SS, expressly for the purpose of doing Roth conversions. My hope is to surf right at the edge of the 12% bracket.
What's interesting to me is how many of the respondents have a "small" pension (i.e. much less than their living expenses and a small fraction of their final salary). I'm in this boat as well with a corporate pension that pays around 22% of my final salary.
If I had a "small" pension equivalent to 22% of my final salary plus the amount of Social Security I'm eligible to receive right now, I'd have more income than I spend in a year, including taxes. Of course everybody's definition of a "small" pension or "mini-pension" differs, as does their final salary, or course. But I'm sure it's a lot more than the $100/month pensions which some people say they're getting. Although your pension may not be enough for most of us to live on by itself, I still wouldn't classify it as "small". It's certainly far better than the $0/month pension that 36.67% of us (as of this moment) are receiving.I think you put the dividing line in the wrong place. Early retirees with "mini-pensions" have most of the same concerns as those without. All the lessons about AA, SWR, SORR and all the other lovely investing acronyms we toss around here are equally relevant to these folks. The little bit of stable income certainly helps, but establishing, growing and spending from their nest eggs is a key component of their retirements too. Only those fully supported by pension income seem to be in a different category where these lessons don't really apply.
What's interesting to me is how many of the respondents have a "small" pension (i.e. much less than their living expenses and a small fraction of their final salary). I'm in this boat as well with a corporate pension that pays around 22% of my final salary. I suspect only gov't and military retirees receive what could be regarded as a "full" pension anymore.
I have a FERS pension that began in 2014 when I retired at the age of 52 under a discontinued service retirement (DSR). When I turned 56, I began receiving a FERS supplemental annuity which approximates (in my case) 1/2 of what OPM estimates my SS payments will be at the age of 62. DH is pensionless.
No pension. I've sometimes felt that there should be parallel forums for folks w/pensions and those without. When you have no pension, you only get one chance to get it right. The other important thing is that most Americans with government pensions and some with corporate & union pensions, is that they usually get subsidized and guaranteed health insurance along with their pension. Those of us with no pension in the USA often had to deal with the ACA and the high premiums in the years before Medicare begins, as well as occasional nail-biting when there have been attempts to end the ACA. I'm thankful that the ACA began its existence when I wanted to ER.
I'm always amazed when I talk with government employees, at how many are completely clueless about the fact that pensions have largely ceased to exist in the private sector. And don't get me started and say "well why didn't you get a government job?". I had been working for a megacorp for over 10 years when I went into work one morning and found a memo stating that the pension plan and retiree healthcare were ending immediately, except for those employees who were already vested (25+ years IIRC). I got some piddling "cash value" for my 10+ years which I rolled over to my IRA. Folks who were within a year or two of being vested were really screwed.
I know of one retired GS-15 federal employee whose CSRS COLA'd pension began in the low 6 figures, and this person was genuinely worried about being able to live on that!
As for those federal employees with less insanely generous FERS pensions, that COLA'd pension is probably still far better than 98% of other Americans' retirement incomes, but they also will get Social Security, so they should be sitting pretty.
The lack of a pension is one of the reasons I'm waiting until age 70 to start collecting Social Security. I want to maximize the monthly amount.
No pension. I've sometimes felt that there should be parallel forums for folks w/pensions and those without. When you have no pension, you only get one chance to get it right. The other important thing is that most Americans with government pensions and some with corporate & union pensions, is that they usually get subsidized and guaranteed health insurance along with their pension. Those of us with no pension in the USA often had to deal with the ACA and the high premiums in the years before Medicare begins, as well as occasional nail-biting when there have been attempts to end the ACA. I'm thankful that the ACA began its existence when I wanted to ER.
I'm always amazed when I talk with government employees, at how many are completely clueless about the fact that pensions have largely ceased to exist in the private sector. And don't get me started and say "well why didn't you get a government job?". I had been working for a megacorp for over 10 years when I went into work one morning and found a memo stating that the pension plan and retiree healthcare were ending immediately, except for those employees who were already vested (25+ years IIRC). I got some piddling "cash value" for my 10+ years which I rolled over to my IRA. Folks who were within a year or two of being vested were really screwed.
I know of one retired GS-15 federal employee whose CSRS COLA'd pension began in the low 6 figures, and this person was genuinely worried about being able to live on that!
As for those federal employees with less insanely generous FERS pensions, that COLA'd pension is probably still far better than 98% of other Americans' retirement incomes, but they also will get Social Security, so they should be sitting pretty.
The lack of a pension is one of the reasons I'm waiting until age 70 to start collecting Social Security. I want to maximize the monthly amount.
I think we can all live harmoniously in a single forum, but it is a good reminder that it is basic human nature to look at things through the lens of our own personal experience. When I post, I try to keep in mind that my situation may not be like yours, but I'm sure I'm not always successful. The best we can do is try to be aware of the fact and how it might affect any advice we may be giving.