Alcofribas
Dryer sheet wannabe
Hello,
I have been following the forum for a while now and finally decided to take the plunge and join. I am a 54-year-old single male in good health who recently met the qualifications for full pension benefits having taught 26 years at a state college. It has been my goal for much of my career to retire early once I met those pension qualifications and yet now than I finally have, I find myself strangely anxious at the prospect. I’ll dive into the details of my situation with the hope that some may be able to offer advice or encouragement.
I have always lived well below my means and have managed to save $1.1 million on a professor’s salary, which is currently about $100K. My townhome is paid off and I have no debt. My total expenses last year amounted to $22K. My college is offering me a buyout if I retire by the end of August, 2021. If I retire at that time my pension will be around $58K annually. The buyout offers a range of options from a lifetime annuity that would be a little over $3K annually to about $74K paid out over about five years. My pension is calculated based on the number of years of service and the average of my five highest salaries. I estimate that if I pass on the buyout package and work one more year my pension will be about where my monthly payments would be if I opted for the lifetime annuity. So, my monthly income would probably be nearly the same if I worked an extra year rather than taking the buyout. But that, of course, means another year of work.
I thought of two other considerations though. The pension is subject to periodic COL adjustments whereas the annuity would not be so the $3K a year would decline in importance over time with inflation relative to the pension. The other consideration is that I typically save around $50K a year so that extra year of work would add another $50K to my portfolio.
Other relevant circumstances and information include: My health insurance premiums will be covered by the state until I qualify for Medicare. I will not be eligible for Social Security. It is unlikely but not inconceivable that my very elderly parents may need some financial assistance at some point though I have a brother and sister that would help with that. I have traveled extensively but would like to take about four more international trips.
The biggest wildcard I see is that I would really like to relocate and that could take a substantial bite out of my nest egg. The area where I live has become too crowded and busy for me. I can’t stand going out in the traffic and so I sometimes feel like I’m imprisoned in my home. Ideally, I would like to move someplace where I could walk out my door and go hiking or maybe emigrate. I have considered Portugal for example. I have little doubt I could afford to retire if I stayed put but I am terrified that I would end up spending too much time sitting around the house because of my aversion to traffic and the fact that this area does not offer the kind of activities that I prefer.
I have been following the forum for a while now and finally decided to take the plunge and join. I am a 54-year-old single male in good health who recently met the qualifications for full pension benefits having taught 26 years at a state college. It has been my goal for much of my career to retire early once I met those pension qualifications and yet now than I finally have, I find myself strangely anxious at the prospect. I’ll dive into the details of my situation with the hope that some may be able to offer advice or encouragement.
I have always lived well below my means and have managed to save $1.1 million on a professor’s salary, which is currently about $100K. My townhome is paid off and I have no debt. My total expenses last year amounted to $22K. My college is offering me a buyout if I retire by the end of August, 2021. If I retire at that time my pension will be around $58K annually. The buyout offers a range of options from a lifetime annuity that would be a little over $3K annually to about $74K paid out over about five years. My pension is calculated based on the number of years of service and the average of my five highest salaries. I estimate that if I pass on the buyout package and work one more year my pension will be about where my monthly payments would be if I opted for the lifetime annuity. So, my monthly income would probably be nearly the same if I worked an extra year rather than taking the buyout. But that, of course, means another year of work.
I thought of two other considerations though. The pension is subject to periodic COL adjustments whereas the annuity would not be so the $3K a year would decline in importance over time with inflation relative to the pension. The other consideration is that I typically save around $50K a year so that extra year of work would add another $50K to my portfolio.
Other relevant circumstances and information include: My health insurance premiums will be covered by the state until I qualify for Medicare. I will not be eligible for Social Security. It is unlikely but not inconceivable that my very elderly parents may need some financial assistance at some point though I have a brother and sister that would help with that. I have traveled extensively but would like to take about four more international trips.
The biggest wildcard I see is that I would really like to relocate and that could take a substantial bite out of my nest egg. The area where I live has become too crowded and busy for me. I can’t stand going out in the traffic and so I sometimes feel like I’m imprisoned in my home. Ideally, I would like to move someplace where I could walk out my door and go hiking or maybe emigrate. I have considered Portugal for example. I have little doubt I could afford to retire if I stayed put but I am terrified that I would end up spending too much time sitting around the house because of my aversion to traffic and the fact that this area does not offer the kind of activities that I prefer.
