Hi, I'm Taco. And I'm hanging on...

[Taco]

Hi all,

Long time reader. Love this community. I've learned a lot. I'd like to introduce myself and then ask your thoughts about my plan to hang on for 2 more years...

I'm 54. Divorced some years ago. Been with my significant other (who is 52) for quite a few years but we are not married (yet?). My youngest is about to graduate college / launch, so the kids are off the payroll.

My plan is to retire in 2 years.
My financial assets (i.e. not including house) are around $2 mil.
Owe 50K on house, which will be paid off next year. Value is around $600K.
Eligible for pension as well as a good retiree medical program that will take me to medicare at 65.

Between current assets and the pension, and current spending, pretty confident I could easily retire today. FireCalc gives me a thumbs up.

But about that pension... It has me hanging on.
There is a pretty hefty penalty for leaving prior to reaching "full" retirement. I would get around $40K leaving now. $50K a year from now. $60K two years from now, when fully vested.
Assuming a 30 year retirement, those 2 years means another $600K of income over those 30 years. Add in the difference between salary and pension for the extra 2 years, and it is really more like $850K - a lot to walk away from.

Mentally, I'm ready to stop working anytime, but at the same time work is fine. Not stressful. Working from home. I'll also have 10-11 weeks off each of the next 2 years. Not a bad gig!

And while I probably don't need the additional $, the extra guaranteed income is certainly appealing. It would put us more into Fat FIRE - we would have the extra $ to be more generous to both ourselves and to others. Which sounds fun!

So I could go today but, for now at least, I'm hanging on. Am I crazy?

Thanks,
Taco

p.s. My SO has a good job, no debt, and is saving aggressively. But she started the saving game much later in life so her assets are much smaller than mine.

 

[Tetto]

Hi all,

Long time reader. Love this community. I've learned a lot. I'd like to introduce myself and then ask your thoughts about my plan to hang on for 2 more years...

I'm 54. Divorced some years ago. Been with my significant other (who is 52) for quite a few years but we are not married (yet?). My youngest is about to graduate college / launch, so the kids are off the payroll.

My plan is to retire in 2 years.
My financial assets (i.e. not including house) are around $2 mil.
Owe 50K on house, which will be paid off next year. Value is around $600K.
Eligible for pension as well as a good retiree medical program that will take me to medicare at 65.

Between current assets and the pension, and current spending, pretty confident I could easily retire today. FireCalc gives me a thumbs up.

But about that pension... It has me hanging on.
There is a pretty hefty penalty for leaving prior to reaching "full" retirement. I would get around $40K leaving now. $50K a year from now. $60K two years from now, when fully vested.
Assuming a 30 year retirement, those 2 years means another $600K of income over those 30 years. Add in the difference between salary and pension for the extra 2 years, and it is really more like $850K - a lot to walk away from.

Mentally, I'm ready to stop working anytime, but at the same time work is fine. Not stressful. Working from home. I'll also have 10-11 weeks off each of the next 2 years. Not a bad gig!

And while I probably don't need the additional $, the extra guaranteed income is certainly appealing. It would put us more into Fat FIRE - we would have the extra $ to be more generous to both ourselves and to others. Which sounds fun!

So I could go today but, for now at least, I'm hanging on. Am I crazy?

Thanks,
Taco

p.s. My SO has a good job, no debt, and is saving aggressively. But she started the saving game much later in life so her assets are much smaller than mine.

For the pension, if it were me, i'd split the difference and stay OMY and walk with the 50K. $10G's isn't going to make all that much difference at that point, i believe.

 

[Out-to-Lunch]

Welcome to E-R.org!

Yeah, as time goes on, your assets and income sources tend to grow, and your future needs and the time you have left decrease. Only you can decide where they cross. I think Tetto makes a reasonable suggestion.

 

[Love This Community]

Welcome! I like Tetto’s suggestion. You might want to ask the question: what is the purpose of the additional money over next 30 years?
You could work 2 more years and give more to your heirs, charity etc., Only you can can answer this. If I were you, with 11 weeks vacation per year, low stress job, I would go on while figuring out what to do after I retire(I am sure you already have this figured out).

 

[Brianeboatman]

My question is this...

What do you plan to do with all your free time? Are you going to just sit on the couch and chill, or do you have plans to play pickleball every day.

For me, if I had something to retire to...I'd just immediately. If I didn't have a defined plan to retire to, I'd probably keep working just for something productive to do.

I hope that makes sense. Regardless, best wishes and congrats of saving so well, in spite of a divorce. Kudos!

 

[disneysteve]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

 

[Dtail]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

+1 and still relatively young.

 

[Gumby]

I'd have to agree on waiting for the full pension. You may scoff now at an extra $20k per year coming in the door, but that 50% bump up in your pension will help you have steadier hands when the market plunges for four weeks in a row, as it did to start this year. For me, having safe income coming in the door sufficient to cover my regular bills gives me precious peace of mind. And that allows me to feel more comfortable blowing the dough out of our portfolio on fancy travel.

 

[Golden sunsets]

I'd have to agree on waiting for the full pension. You may scoff now at an extra $20k per year coming in the door, but that 50% bump up in your pension will help you have steadier hands when the market plunges for four weeks in a row, as it did to start this year. For me, having safe income coming in the door sufficient to cover my regular bills gives me precious peace of mind. And that allows me to feel more comfortable blowing the dough out of our portfolio on fancy travel.

I concur. If you were stressed over the job, or not in good health, then I might advise differently. Speaking as one who oversaved and didn't hate my job (even loved it at times), the SWAN factor and extra security is priceless.

 

[finnski1]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

+1

 

[captain3d]

And that extra two years will barely keep up with inflation at this rate

 

[ownyourfuture]

For the pension, if it were me, i'd split the difference and stay OMY and walk with the 50K. $10G's isn't going to make all that much difference at that point, i believe.

A+

 

[Taco]

Thanks all for the feedback.

I know mine is a common dilemma - when to walk away - and I have read with great interest other threads like "Wish you had gone sooner?".

I like the cartoon, that I think OldShooter posted, with the man walking by the graveyard with the tombstone that reads Time > $. It does make one think. But, getting so much for so little makes me think hanging on makes sense.

As disneysteve says, I can always bail if things turn bad. I also can see Gumby's point about the piece of mind that will come from the regular income. A big drop in the market will hurt less knowing I have the income coming in.

 

[skyking1]

+1 for disneysteve and Gumby's points. Steady income is da bomb. Being all in at 56 is bomb-diddy.

 

[CindyBlue]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

+1

 

[perez99]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

+1

 

[target2019]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

Time will fly quick enough. Wait two years and know you always have the option to walk away sooner.

 

[pacergal]

Welcome!
I agree with the majority,stay for two years for full pension.
A low stress job, good amount of time off, working remotely sounds like a promising plan.And knowing you would be fine if you left, makes the job even less stressful, no need to put up with anything!

 

[yakers]

Low stress remote job off 20% of the year and a SO still working? I'd probably hang on for the higher pension. And I'd do that with the knowledge that if at any point in the next 2 years, the situation changes and the job becomes more of a hassle, I'd be prepared to walk away even if it means leaving money on the table.

Agree. Once I became retirement eligible/financially independent work life radically changed. I called it 'jerk proofing' my work life, never again would I have to put up with a jerk boss which I had for 2 two year periods of my 35 year career. I had a job I really liked so I stayed a couple years more than I had to and would have stayed longer except some medical issues came up that prompted my retirement. But see if you life your work life after financial independence. Actual retirement is far less important than FI for you and SO.

 

[dadu007]

I envy all you people who love your job (which is low stress, to boot) and have a pension coming.
Me? 61 and in a high stress job that I hate...only 401K/investments and SS. I've never been in a job I "loved". Always missing the boat, joining companies only hear the staff say, "oh, you should have seen how great it was to work here back in the day". Just a life of surviving really... golden handcuffs at this point.
The only upside is that my wife is 7 years younger and loves her work/job. Trying to convince her we have the $$ to let me quit and have some peaceful years NOT working before I leave this mortal coil.
All this just for a little perspective, Taco. ;-)

 

[Taco]

I envy all you people who love your job (which is low stress, to boot) and have a pension coming.
Me? 61 and in a high stress job that I hate...only 401K/investments and SS. I've never been in a job I "loved". Always missing the boat, joining companies only hear the staff say, "oh, you should have seen how great it was to work here back in the day". Just a life of surviving really... golden handcuffs at this point.
The only upside is that my wife is 7 years younger and loves her work/job. Trying to convince her we have the $$ to let me quit and have some peaceful years NOT working before I leave this mortal coil.
A this just for a little perspective, Taco. ;-)

I am certainly very fortunate - have had a good job with a good employer. And pensions are getting rarer and rarer.
I hope your job situation improves - or at least it is not too long that the golden handcuffs keep you there.

 

[Palmtree]

Taco, I think only you can answer this question. You are planning on a 30 year retirement but no one, (besides God) knows how many day we have left on this earth. We all trade time (spent working) for money. Time that could be spent enjoying life on our own terms. At a certain point more money does not equal more happiness. The more money vs more time is a calculated gamble for sure. Only you can decide where that tipping point is.

 

[Janet from FIRE Planet]

Check to see if your pension has a Cost of Living Raise (COLA) every year. A COLA makes the pension more valuable to you in future. If inflation is only 3% your pension loses 30% after 10 years without COLA. If you develop a serious illness in next 2 years, think of getting married so SO can enjoy the pension. If you marry, perhaps give your kids the house and all other assets. With pension, & other assets it is important to discuss with your SO (& kids) with marriage & without marriage, what happens if you die before SO dies or what happens if SO dies before you die.

 

[zippy2020]

Janet has an excellent point re not only COLA but also marriage. As my spouse was a government agency union worker, his pension has a COLA that varies. In the recent low inflation years it was an average of 1.4%. Due to the recent rise in inflation, he was notified his increase for 2022 is 4.5%.

We have been retired for 10 yrs. The COLA makes a BIG difference. The CPI does not capture the fine details of inflation, and we found that what we spend on, about 50% has easily exceeded the "official" CPI, over the years.

Also, is your pension assignable? If it is, get married (and hopefully you both want to, LOL). I pointed out to my spouse that if he didn't retire early, and passed away (he already had a stroke at 50, and was 57 when we had this particular conversation) all I received was his 403(b) money, NOT his pension.

I was in the same situation as your SO; I had much less retirement savings and three very small pensions (a few hundred each). He had to be retired, then pass away, before I would receive his pension as a spouse.

Anyway, good time to be asking questions as you have time to research these things and get all your ducks in a row! Good luck and welcome to the forums!

 

[Taco]

Janet and Zippy - thanks for your feedback. The pension is unfortunately non-COLA.

You make good points regarding tying the knot. There would be a number of financial advantages. The pension does have a good surviving spouse option. For just a few percentage points reduction in the pension amount, you get 50% surviving spouse. I've not verified this, but I'm guessing her SS might be higher using my income rather than hers. And, the MFJ tax bracket would be more advantageous in a number of ways. Lots to consider!