Retire or work

[bjw1]

I've been lurking for awhile, but I thought I would ask for an opinion.

I'm 52 1/2. The earliest I can retire from my company is 55. I don't get full retirement benefits until 57 1/2. My retirement at 55 is around $2k/month, my retirement at 57 1/2 is $3k/month. Minimal additional gains after 57 1/2. With vacations, holidays, etc, I would have to work an additional 430 days to get from 55 to 57 1/2. I have ~$1.1MM at present. I need about $4k/month to maintain my present standard of living.

I think I could retire at 55 comfortably, but I ran a quick lifetime income calc on retiring at 57 1/2 and (if I live to age 88) the difference in lifetime income between 55 and 57 1/2 is $563,000. This means that each day I work from 55 to 57 1/2 is worth around $1300/day.

Should I work the extra 2 1/2 years (430 working days) to make the additional retirement dollars or retire at 55 and figure my life is worth more than $1300/day. (I have a pretty good family history, so living to age 88 is statisically probable).

 

[Cut-Throat]

I think you have thought out your options well enough.

Now you just need to make decision, based on:

1.) What would you spend the extra money on. If you're one those people that really don't enjoy spending money (unlike myself) then retire early.

2.) If the extra dough would provide a lifestyle that you want, and you deem it worth it - then work a little bit more.

3.) If you 'croak' at your desk or get laid off - it's a moot point!

 

[zcung]

I agree with Cut-Throat and would say that you just work until you don't want to any more.

 

[Dawg52]

Most of us have or had a similar decision to make. I'm retiring at just under 53 but I also have wondered if maybe I should work a couple of extra years to pad my retirement. I quickly get over those thoughts however.    

No way I can answer that for you. It just depends on how much you value the 2 1/2 year difference. Good luck!

 

[Nords]

Should I work the extra 2 1/2 years (430 working days) to make the additional retirement dollars or retire at 55 and figure my life is worth more than $1300/day.  (I have a pretty good family history, so living to age 88 is statisically probable).

Usually we get this question from people who are a couple migraines & a coronary away from being killed by workplace stress.  Or occasionally we hear from people who are so busy with their personal lives that they occasionally forget to go to work.

If you don't have any compelling reason to leave, you have 1300 pretty compelling reasons to show up every day.  It doesn't look like you could replicate these benefits with part-time work or other lifestyle changes.

So if you have no compelling reason to leave, it doesn't seem to hurt to stay.  Just keep an eye on the situation to make sure that things don't change too badly...

 

[bjw1]

Fortunately, this decision can be re-evaluated every day after age 55. Right now, greed has made my decision to go to 57 1/2, but I'm not spending the extra $ until they're made. Its comforting to know that I can say "take this job and shove it" at 55 or, work a few extra days an buy lot's of toys.

I was just wondering if many other people are faced with this kind of choice.

 

[Rich_by_the_Bay]

Should I work the extra 2 1/2 years (430 working days) to make the additional retirement dollars or retire at 55 and figure my life is worth more than $1300/day. (I have a pretty good family history, so living to age 88 is statisically probable).

Another way to look at is is the annual income at 57.5 is $12,000 more than at 55. To generate that amount through investments you would need an additional $300,000 using the 4% SWR rule. So waiting is in some ways like earning an additional $130,000 per year in addition to your regular salary, ignoring inflation issues. If it were me and the current job was OK and not truly abusive and out of control, I'd wait and enjoy knowing I could bolt any time if it got worse (my real problem is that I like my job, but that's a whole other discussion).

You're in pretty good shape financially. Sounds like you have to decide whether the trade off is worth it. As has been said many times, it's always better to wait from a financial perspective. Right down to your funeral some day.

 

[brewer12345]

You're in pretty good shape financially. Sounds like you have to decide whether the trade off is worth it. As has been said many times, it's always better to wait from a financial perspective. Right down to your funeral some day.

I think this is the bottom line. Extra money is always nice, and it sounds like you will be very well compensated for an extra couple years of work, but remember that you are selling your precious time.

DW and I were casually talking about a major frivolous purchase yesterday and she was sounding a little iffy, since in a few years our kids should be old enough to do without the fluffy thing. I told her "I could be run over by a bus within two years."

 

[Nords]

Fortunately, this decision can be re-evaluated every day after age 55.
I was just wondering if many other people are faced with this kind of choice.

Several times a workday, and more frequently during meetings.

I think everyone faces this choice when they achieve a bare-bones FI and continue to pad the portfolio while waiting around for the opportune moment to retire early.

I told her "I could be run over by a bus within two years." 

What are you, some kinda marriage rookie with extra life insurance?!? Are you always teasing her with fantasies like this?

 

[kz]

If you think you'll have 30 yrs in retirement at age 57.5 I'd stay for the money. Of course I've always been the conservative type.

 

[Donzo]

I am right in your shoes - I have enough to retire now, but if I stick around 5 more years I get the bennies. The real difference is that my job is killing me--to much travel, stress and dealing with people that I don't trust or respect. In my case...I am re-thinking my plan of waiting till year end to add extra padding to the "buffer" let alone "doing the 5 years.

If you still derive some satisfaction from your job and enjoy the people your work with....there is a very nice carrot there for you. You have enough now if you are in NEED of an out - thats a great place to be!
How does your stomach feel on Monday morning?

 

[bjw1]

It's funny. A few years ago I hated every minute at work. Then I picked up on you guys and ran some firecalc numbers. When I realized that I'm working because I wanted to and not because I absolutely had to for survival, I developed an entirely different attitude.

While there is nothing on this earth more precious than my time, I do accept that I will need to sell some of it to make my life more comfortable. If I get run over by a truck at 58, I will have sold my precious commodity to cheap. If I live to 105, then it will have been a good deal.

 

[AltaRed]

Fortunately, this decision can be re-evaluated every day after age 55.  Right now, greed has made my decision to go to 57 1/2, but I'm not spending the extra $ until they're made.  Its comforting to know that I can say "take this job and shove it" at 55 or, work a few extra days an buy lot's of toys. 

I was just wondering if many other people are faced with this kind of choice.

Yes, I had a similar situation. Could have retired at 55 with a 25% discount to my DB pension, but would have ticked me off leaving that much on the table at that time. Work was a PITA in many ways primarily due to corporate crap and too many business trips overseas, but I knew I could leave/retire on 30 days notice and management knew that too. I developed a different attitude by not taking my work (mentally) home with me and worked only 9 hr days from then on, and sometimes only 8. So I stuck around until about 56.5 and I knew then that life was becoming too precious to keep trucking into the office. I retired the day I turned 57 and I don't regret it one bit (only retired 6 weeks so far though).

I think you will intuitively know when you turn 55 what you want to do. Your deal sounds pretty good to wait until 57, but only you will know if it is worth it. Take it a month at a time once you reach 55 and you will decide when it is time. Many of my co-worker friends retired at different times between 55 and 58 based on their readiness to retire versus adding to the pile.

 

[2B]

bjw1 --

Here's a thought. If it doesn't matter, why worry about it? If you have enough money to retire at an acceptable standard of living, you are working for extra spending money. If you slack off, you'll be amazed that no one notices. If you can lose your job and still survive, it's amazing how little stress you feel.

I'm in a job that has great flexibility on hours worked and will let me take off without pay. I'm doing what I like to do and can't see any stress. My biggest problem is getting enough vacations planned (current FIL issues may be finally resolved).

Once you've hit FI you can decide when your "job" interferes with what you want to do.

Become a slacker. Do more things for yourself.

 

[Beststash]

I retired at 53 for a lot of the same reasons that everyone has mentioned. I will have to admit, during the first couple of years I have thought that maybe I should have stayed a bit longer - but I quickly get over it.
The good side of retirement equals good and enough sleep, little stress, a sense of vacation (all of the time), a feeling of good will, a little bit of apprenhension concerning the cost of healthcare and a overwhelming feeling of "this rocks"!!!
If you are stressed at work - I would recommend taking about a month off (vacation) or even a leave of absence (if possible). It will take a while to wind down but it happens and it is very renewing!!!

 

[lazygood4nothinbum]

with all the talk about bird flu and recession and real estate crashing (oh my) i'd say stay at work. in fact, you gotta job for me?

 

[Spanky]

bjw1,

It's entirely up to you. You need to determine what's more important -- time to do things that you want or extra income ($$) from working longer -- very, very, very simple.

Spanky

 

[rs0460a]

If you slack off, you'll be amazed that no one notices.  If you can lose your job and still survive, it's amazing how little stress you feel.

Absolutely agree!  Since I (and my DW) finally understand that we can retire "tomorrow", w*ork has not been an impact to our well-being.  Like I say, "I've never been paid so much to do so little!" 

- Ron

 

[MJ]

One of the reasons, I stayed as long as I did was because for the last 8 years, my VP boss was a non-employee consultant who brough in his own crew (made him a multi millionaire, lucky ba*tard). He was more interested in feeding them the more important (and stressful) work while I handled to easy legacy and canned financial modules. Most of my interaction with the forum was during the last year of my employment, my most productive year.
For me, it was an easy trap job to stay in. As luck would have it, when I was ready to leave in a few short months, they gave me the boot. I cried ( ) all the way to the bank with their surprising and nice severance package.

 

[bosco]

Interesting discussion

I am in a similar situation. I am 53. I presently qualify for about $31,000/year pension. If I finish out this year, it goes up to $40,000. If I work next season, more like $51,000. At that point, I would quit in November, 07. If I work another season, $57,000/yr. i'm not looking at it as lifetime difference, rather as what it will do for my standard of living right when I retire.

In my case, a "year" is a 6 or 7 month construction season.

But the downside is I spend that construction season, not just away from home but in a different country.

I have enough to quit now and have an adequate income, with other sources. I'm shooting for the this season and next (=$51,000/yr). For us, it is the difference between money for travel, motorcycles, etc. and good Belgian beer instead of Buttwiper.

The way I handle it is with the concept of a "doomsday countdown." Star Trek fans will know what I mean. If I have a really bad day, I can set the "auto self-destruct." I then have 30 days to rescind the countdown. If I don't, I give my notice. If I rescind the countdown at any point in that 30 day window, I keep working. I can start it again anytime if I need to.

I know it's silly, but it works for me. So far, I haven't started a countdown, but just knowing I can (and my wife agrees with the concept) makes it a lot easier to be here.

 

[kaudrey]

I have a longer time horizon but face complicated financial decisions as well. I'm 37 and want to retire at 52 in 15 years.

I work for the fed. gov't. If I retire at 52, I'll have 30 years in, and can get my full pension (1% x 30 x high 3) at 57 (deferred), BUT I am then not eligible for federal health benefits, because it's a deferred retirement. Can't get health bennies unless I stay until 57. I don't want to do that, but it's NOT an easy thing for me to deal with - having to get my own insurance. It's a huge cost I could avoid by staying longer. Plus, by having a deferred retirement, I have 5 years without any pension at all.

If I retire younger, I get a smaller pension based on the years of service, and can't collect until 60, so that's a consideration too, if I don't feel like staying around another 15 years.

Good luck either way! Sorry I rambled, sometimes a post just makes me think about things a lot.

 

[AltaRed]

kaudrey, I would suggest that you don't think that far out to 57 as that extra 5 years can cause disproportionate personal distress. You know you have an option at 52 so simply aim for 52. Once you reach that milestone, you can then make additional decisions.

I did a similar thing when about 50 yrs of age and our company getting bought out. I dreaded the thought of the new culture (or lack of it) but aimed for 55..rather than 60 for full pension. Then once I did reach 55, I felt quite a bit better about the situation and ended up staying until I turned 57. Things have a way of looking different when you reach a milestone that gives you flexibility.

 

[Leonidas]

What are you, some kinda marriage rookie with extra life insurance?!? Are you always teasing her with fantasies like this?

There is no sense in tempting a good women to turn bad. That's why I never told the Princess how much money the city, state and feds would throw her way if I bought it on the job.

 

[kaudrey]

Thanks AltaRed. My situation may change drastically in the next few years anyway, as my BF and I are thinking about marriage. If that happens, between our 2 incomes, we might jump ship in 10 years instead of 15!

We'll see. But you are right. I'm really NOT expecting to work until 57, I just have to plan around buying my own health insurance instead of getting the gov't bennies.