Building the courage to take the plunge?...

[pb4uski]

Thanks for the encouragement..
My brain does not function is such a way that I could complete the task you describe in a few hours, I'd need about 10x that. In addition, the requirements of exceeding expectations in a demanding professional position, meeting my personal obligations and indulging my impulse for continuous dopamine bumps makes it extremely hard to complete tasks like you suggest or even keeping up on my laundry for that matter.

Also, my expenses do not work the same as others. If I take 3 months traveling and trekking in Pakistan, my expenses actually go down significantly from if I stay in the United States. If I take 3 months traveling around the USA staying mostly in hotels and buy/sell a 370z convertible to do so, my expenses shift in another direction. If I AirBnB my house it adds another complication.

I am not saying that the task cannot be done.. It's on my list along with a million other uncompleted tasks, if I could just keep track of my keys maybe I could find the time to get right after it.

In any respect, it is not going to get itself sorted in the time in which I have to make this decision.


~~~~~

Substitute your can't-do attitude with a can-do attitude!

Depending on how complicated your finances are you may be able to simplify it to get a reasonable ball-park estimate. For most people, what is not saved is spent. If this fits you, start with your 2024 takehome pay from your last paystub. Add to that any other significant income (might be none). Add your beginning of year checking account balance and subtract your end of year checking account balance. That is presumably what you spent unless you made specific transfers to taxable savings or vice versa in which case you can adjust. Shouldn't take more than 10 minutes.

 

[pb4uski]

It's actually around $260/yr or something w/dental. You are right, I tend not to be mentally ready for anything and stress out about any big decisions. I don't think this will change all much if I wait another year.

I'll try and take a good look a fireCALC when I get a chance. Thanks for the hints, they really help.


~~~~~

FWIW, our 2025 Medicare costs are $185 for Part B docs et al, $0 for Part D Rx, ~$200 for Medigap Plan G. So total premiums of ~$385/mo. Then we pay Medicare Part B deductible of $257 for the year and ~$500 for dental exams and vision exams. So normally, $5,377/year or $448/mo. If we need a crown or new glasses then that is additional.

$260/yr is unusually low but you already know that. I always considered these costs just part of the price of freedom.

From what you wrote you see stressed and a bit frazzled. You have enough. Working another year isn't going to make enough of a difference financially to make it worth it so I would advise you to retire sooner rather than later.

 

[glasswave]

Other tax deferred retirement account possibilities are 457 and 403b. Here is an IRS document describing the various types of plans. Types of retirement plans | Internal Revenue Service The tax treatment is generally the same for all of them, but there are some twists, like the mechanics of required minimum distributions, that vary by the type of plan, so you should try to find out precisely what it is.

What is the 20.5% income for the next 5 years? Is it some sort of pension or is it wages? In general, you only need to be concerned about reductions in your social security if you are less than full retirement age of 67, collecting social security and still receiving wage income of more than $23,400 per year (they take away $1 of social security for every $2 of wage income above that, but you get it back later). Notably, this only applies to wage income. You can collect a private pension and early social security at the same time (I've done it for the past 4 years).

Of course, whenever you have other income and get social security, your total income can cause up to 85% of your social security to be subject to taxation. This occurs whether you are claiming social security early or not.

When you turn 65 and go on Medicare, you will have to pay Part B and D premiums, which are currently $185 per month for Part B and about $46.50 per month for Part D, depending on the precise plan you choose. If you have a really high income (above $106k per year if single), you will be subject to IRMAA surcharges on the Part B and D charges. Then you'll want a Medicare Advantage plan (which would obviate the Part D premium if the plan includes drug coverage) or Medigap plan to cover coinsurance and deductibles. They vary in cost.

For tax planning for future years, I just use the current limits and brackets and assume that they will increase with inflation. Not everything related to taxes is inflation adjusted, but most of the common things are. Here is a quick and dirty list of tax numbers you should know for your planning.

Some important "trigger" income levels for 2025

CORRECTED TO POST #18 Similar to what I did for the last five years, here is a list of important “trigger” income levels for 2025. Numbers are actual AGI/MAGI (i.e. - before standard or itemized deductions) unless indicated as Taxable Income by an asterisk * which means you can add $30,000...

www.early-retirement.org

I am pretty sure the 20.5 is paid as income. I am less than 67, I turn 62 next month. The 20% goes until I turn 67. The insurance benefits I must pay for, cost $260 to $280 year for very good insurance to receive and they cut off when I turn 65.

My sister had indicated that Medicare with a Medicare supplemental private plan are costing her around $6-800/mo. At least that is what sticks in my head. $400 a month will be significant given I don't pay more than about $25 a month now.




~~~~~~

 

[glasswave]

pb4uski is a numbers guy, if he says you are good, you most likely are golden.

OP-- how much notice do you need to give? Most of the time, 2 weeks is plenty, some some need months.
Firecalc is really not that hard and does not take long to learn. Read each section in each tab and follow directions. I really encourage you to take a little bit of time in your day to run it.
Knowing your expenses is important, but you don't need the exact number to the penny. Look at your bank records/tax records, etc for the past year to give you an idea.

It looks like the company is giving you a greater incentive to retire now, with the insurance discount.
Having 20% of your salary for 5 years is a good hedge and will decrease the draw on your savings in the beginning of your retirement. And will take you to 67 to start SS.

A simple basic math of 4% of your $1,370,000 investments and cash= $54,800 for 30 years.
If you can pay expenses, taxes, and have little fun on that each year, you are fine. It does not include SS or your 20.5% salary for 5 years.
I think you are OK, but YOU have to feel OK about it.

Psychologically, it sounds like you are waffling.
Do Not worry about your colleagues. You don't have to tie up all loose ends before you leave. Really, they will be OK. Look at it this way, if you were fired today, what would they do? There is someone else who can do your job, believe me.
If something happened to you suddenly, they would still move forward.

Good luck in your decision making.
Lots of very knowledgeable folks here to answer questions.

I have to give notice now if I were to retire this year (06/30/2025), other wise I would need to work another year (until 06/30/2025).

The 20.5% has been the same for many, many years. Same with the health coverage. In 2022-2023 fiscal year they offered half a year's salary to retire early, plus the other benefits. They tend to do this every 5 to 7 years. That would put the next incentive at 2027-2028. I would be 65, but it could be 2029-30 and I'd be 67. I don't know if I could take advantage at that age. I can work up until I am 75, maybe quite a bit longer.

Yes, I stress out about these sorts of decisions. And yes, I do worry about my co-workers, but they'd all say go ahead if I asked them. It's tough on us as we have had several retirements in the last several years and lost an extremely talents individual. My department size has gone from 12 to 5 and this year back to 7. The workload remains unchanged or even higher. I owe a lot to these people. I have worked there for 35 years. This is a tumultuous time in my organization the last 2 years have been stressful on all of us.

Thanks for your kind words.


~~~~~

 

[pb4uski]

I thought that involuntary servitude was illegal. Assuming so, why can't you quit at anytime you want rather than only on 6/30/2025 or 6/30/2026?

 

[Gumby]

I am pretty sure the 20.5 is paid as income.
.....

The question is what kind of income. Is it W-2 income, with Medicare and social security withheld, or is it 1099R income?

 

[RetireBy90]

Yes, I stress out about these sorts of decisions. And yes, I do worry about my co-workers, but they'd all say go ahead if I asked them. It's tough on us as we have had several retirements in the last several years and lost an extremely talents individual. My department size has gone from 12 to 5 and this year back to 7. The workload remains unchanged or even higher. I owe a lot to these people. I have worked there for 35 years. This is a tumultuous time in my organization the last 2 years have been stressful on all of us.

Thanks for your kind words.


~~~~~

I was ready financially, but stayed one more year at the request of my boss. It was my decision, nobody else forced me but I enjoyed what I was doing and my work mates and boss. I told my boss in one more year it will be time for me so he understood and assigned any new projects that would take extended time to me and another so there would be nothing left hanging.
If you enjoy your work and team don’t feel bad about extending one year. My goal was to be financially ready by 60. It took a bit longer for me to accept I’m not 18 or 40 or 60 any more.

 

[glasswave]

I also, worry about having all my ducks in a row so my colleagues will not have the burden of scrapping up my loose ends. I'm sorry Glass I thought this above to and I'll guarantee you are very replaceable, and most companies really could give 2 turds about you especially when it comes to terminations if your name pops up your next period so just another stress your adding to your retirement day.

It not my organization that I have concern for, it's my colleagues. We have worked hard together and accomplished great things. I care for them deeply and they for me. But you are right, they would tell me, exactly what I would tell them, "Go for it! We'll miss you, but we'll be fine."

Thanks again for all your advice. I am building courage from your advice and that of others. Life is short.

 

[glasswave]

I thought that involuntary servitude was illegal. Assuming so, why can't you quit at anytime you want rather than only on 6/30/2025 or 6/30/2026?

There is a reason that Pro Basketball players don't often quit mid season.

I suppose I can just stop showing up at anytime. You are right. The can't jail me. Nor can they beat me.

That said, I wish to retire in good standing. I do not wish to forego the 20% of my salary I can get by retiring early and in good standing. There are other benefits as well, benefit that last throughout my living years.

Yes, the organization is going through a period of disruption and that has worn on me, but I still have no desire to simply send an eMail that says FU and bail on my commitments to the organization or those that I serve..


~~~~~

 

[glasswave]

The question is what kind of income. Is it W-2 income, with Medicare and social security withheld, or is it 1099R income?

Income. Wages salary and tips. w-2. withholding. All that stuff.


~~~~~

 

[UpQuark]

It doesn't sound like you need the money, so I'd say that extra year of freedom would be worth leaving this year.

Everyone's body ages differently, but when I was 62 (and still working) I went on a vacation carrying a backpack, walking a lot, and staying in inexpensive hostels and I didn't have any trouble physically. But, I retired at 65 (almost 66), and 6 months later my foot developed a problem, that got better then my knee had a problem, that got better and then I had a shoulder problem. And now at 68 (almost 69) although nothing is currently having a problem, I'm so much more aware of my body wearing out and having limited remaining years to travel and do physically active things. So if I could go back in time, I'd tell my 62 yr old self to retire as soon as financially able.

But, I do miss my coworkers and all the challenges and fun we had working together. OTOH, my teammates scattered within a few months after I left (due to horrid new manager).

If you do run into an economic depression scenario, remember it would probably cause your company to reduce or go out of business, so you likely would lose the job anyway, and if not, since you do have money, it would be a kindness to make your job available to all the other people who would be hit harder by the depression (looking on the bright side).

 

[Koolau]

It's okay to stay another year, but be certain that it is something you believe you NEED to do or you WANT to do.

Again, my gut tells me you don't need the money. Also, you've already conceded that your co-workers are okay with you leaving early. So it's pretty much what you want (stay or leave.)

And FIRECalc isn't that hard. It pretty much leads you through the important things. There are lots of bells and whistles you can come back to. Just the facts won't take much effort but YMMV.

Here is hoping you can wrap your head around the fact that you can (and perhaps should) leave now. If not, we'll see you back here in a year.

 

[glasswave]

I was ready financially, but stayed one more year at the request of my boss. It was my decision, nobody else forced me but I enjoyed what I was doing and my work mates and boss. I told my boss in one more year it will be time for me so he understood and assigned any new projects that would take extended time to me and another so there would be nothing left hanging.
If you enjoy your work and team don’t feel bad about extending one year. My goal was to be financially ready by 60. It took a bit longer for me to accept I’m not 18 or 40 or 60 any more.

Very good advice. And kudos for helping your organization with the transition.

I shared a little with one of my colleagues (in confidence) this morning. She was noticeably upset. I told her I was think about retirement and might prevail upon her for a letter. As I explained that I was taking a meeting with our benefits manager, she just blurted out, "You're not really retiring, are you," as if she was in a state of combined denial and disbelief. We have worked together for some 25-28 years.


~~~~~~

 

[2HOTinPHX]

Do you feel your company is stable enough that they will be able to honor the 20% pay and benefits offered? No sudden bankruptcy looking out there?

 

[Koolau]

Very good advice. And kudos for helping your organization with the transition.

I shared a little with one of my colleagues (in confidence) this morning. She was noticeably upset. I told her I was think about retirement and might prevail upon her for a letter. As I explained that I was taking a meeting with our benefits manager, she just blurted out, "You're not really retiring, are you," as if she was in a state of combined denial and disbelief. We have worked together for some 25-28 years.


~~~~~~

Well, it has to happen some time. Sooner or later one of you will leave - if not vertically, then horizontally. Vertical is much better!

 

[Ronstar]

If a person is going to retire, things not to worry about (IMO) include:

1. Coworkers feelings. They'll get along fine without you.
2. Income taxes. Don't fret over taxes. Just figure out what taxes will be in retirement while you're doing retirement planning, and account for them. Income taxes on retirement income will hit you whether you retire now or ten years from now.
3. Cost of Medicare. Again - the cost of medicare is going to hit you no matter when you retire.

So while it's good to assess these issues, these are generally issues that you have no control over.

Accurately compute future retirement expenses, retirement income, and nest egg at retirement.
If your projected retirement expenses exceed your projected retirement income, then you'll have to withdraw from your retirement nest egg to make ends meet. Common thought is if your nest egg is > 25 times your annual withdrawal, then you're good to go. It's that simple.

If the numbers work, then ask yourself "Do I really want to retire?" I get the impression that OP isn't sure.

 

[glasswave]

Well, it has to happen some time. Sooner or later one of you will leave - if not vertically, then horizontally. Vertical is much better!

Yes. We are pragmatic. It was not like we were sobbing in each other's arms. LOL.

Still, I have formed genuine friendships with my colleagues and we do care about each others well being. Yes, they'll be fine without me. Live long and prosper.

 

[glasswave]

If a person is going to retire, things not to worry about (IMO) include:

1. Coworkers feelings. They'll get along fine without you.
2. Income taxes. Don't fret over taxes. Just figure out what taxes will be in retirement while you're doing retirement planning, and account for them. Income taxes on retirement income will hit you whether you retire now or ten years from now.
3. Cost of Medicare. Again - the cost of medicare is going to hit you no matter when you retire.

So while it's good to assess these issues, these are generally issues that you have no control over.

Accurately compute future retirement expenses, retirement income, and nest egg at retirement.
If your projected retirement expenses exceed your projected retirement income, then you'll have to withdraw from your retirement nest egg to make ends meet. Common thought is if your nest egg is > 25 times your annual withdrawal, then you're good to go. It's that simple.

If the numbers work, then ask yourself "Do I really want to retire?" I get the impression that OP isn't sure.

Yes, my coworkers will be fine.
Some of my retirement planning is going to be happening while in retirement. That's OK.
Taxes will be OK. Transition to Medicare will be OK. I will be OK.
I am getting more and more sure. Met with our benefits manager today. It looks like I will meet with my supervisor early net week.


~~~~~~

 

[Ronstar]

Yes, my coworkers will be fine.
Some of my retirement planning is going to be happening while in retirement. That's OK.
Taxes will be OK. Transition to Medicare will be OK. I will be OK.
I am getting more and more sure. Met with our benefits manager today. It looks like I will meet with my supervisor early net week.


~~~~~~

Excellent! A lot of this daunting at first. If you are like most folks here, you'll be glad that you retired when you did. Or wish that you retired sooner.

Have a prosperous and fun journey!

 

[Al18]

It’s your call, but you may want to give somewhat vague answers when they ask what your last working day will be. They may want you to work part-time for awhile, especially if you’re in the middle of any large projects.

 

[Koolau]

Yes, my coworkers will be fine.
Some of my retirement planning is going to be happening while in retirement. That's OK.
Taxes will be OK. Transition to Medicare will be OK. I will be OK.
I am getting more and more sure. Met with our benefits manager today. It looks like I will meet with my supervisor early net week.


~~~~~~

Way to go! You'll get through this okay.

 

[glasswave]

It’s your call, but you may want to give somewhat vague answers when they ask what your last working day will be. They may want you to work part-time for awhile, especially if you’re in the middle of any large projects.

My last day on the payroll would be Jun 30. 2025. If I do not retire the next seamless transition with keeping all my early retirement benefits will be Jun 30th, 2026. I should be able to finish up the bulk of my obligations by Friday May 9th. Although several loose ends might remain, my time should be mostly my own beyond that date

When I retire, it is fairly safe to assume I will have a basically standing opportunity to earn from $3k up to about $27K as a freelance contractor for my current employer, depending how much I wish to work. Also, I will have finished about $3k to $5k in freelance work by June 30th of this year and it looks like some more opportunities are in the offing. I don't really seek outside freelance work and don't have plans to seek more freelance after retirement, still nonetheless, freelancing options tend to present themselves as a matter of course. Suffice it to say, I am not looking to replace a $100k+ change salary with $50k in freelance work. I may do a project here and there, but nothing big that involves hiring and managing several subcontractors. I am not looking to trade one job for another.



~~~~~

 

[glasswave]

Do you feel your company is stable enough that they will be able to honor the 20% pay and benefits offered? No sudden bankruptcy looking out there?

The organization is stable. While the opportunity for early retirement benefits might diminish for current workers, those who have already taken early retirement can be confident the deal they signed onto will be honored.



~~~~~

 

[Koolau]

My last day on the payroll would be Jun 30. 2025. If I do not retire the next seamless transition with keeping all my early retirement benefits will be Jun 30th, 2026. I should be able to finish up the bulk of my obligations by Friday May 9th. Although several loose ends might remain, my time should be mostly my own beyond that date

When I retire, it is fairly safe to assume I will have a basically standing opportunity to earn from $3k up to about $27K as a freelance contractor for my current employer, depending how much I wish to work. Also, I will have finished about $3k to $5k in freelance work by June 30th of this year and it looks like some more opportunities are in the offing. I don't really seek outside freelance work and don't have plans to seek more freelance after retirement, still nonetheless, freelancing options tend to present themselves as a matter of course. Suffice it to say, I am not looking to replace a $100k+ change salary with $50k in freelance work. I may do a project here and there, but nothing big that involves hiring and managing several subcontractors. I am not looking to trade one job for another.



~~~~~

It sounds like you are getting things sorted out in your mind about your future. Glad to hear it. You will be just fine.

 

[2HOTinPHX]

It is definitely scary to take the leap and turn off the paycheck. I remember it felt jumping out of a plane without a parachute. It was so overwhelming but once I gave notice there was a sense of relief. No more Sunday night dread is so worth it.
Perhaps some inspirational videos might help you?