Old and worn out

[Fishmasterdan]

Hello all.
32 years in construction this year. Body parts not working like they should any longer. I am ready to get out.
So I'm 50 and cant access retirement till I'm 55.
Plan is to be debt free by 55. Currently on track. Every thing is paid for except 5 years left on mortgage.
Not sure will have enough retirement funds to retire at 55. Currently there is right at 800k between a money market and a pension.
At 60 I will get a 800$ month union pension.
Then of course ss.

Is 1m enough? How many have retired on 1m and are comfortable??

 

[Fermion]

Probably need a little more information. Is it just you or do you have a spouse/kids? If spouse, are they working or/and do they have SS coming (or qualify for half of your SS)?

More important, what is your spending. If you spend $30k a year and qualify for a heavy ACA subsidy, you may be just fine to retire now. If you spend 100k, probably not.

 

[pb4uski]

+1 need more info... if your expenses are $40k a year then $1m is plenty when combined with SS but if your expenses are $100k a year then no way. (Ferminion beat me to the punch).

You say that you can't access retirement until you are 55... what types of retirement accounts do you have? traditional IRA? Roth IRA? 401k? others? If you have substantial money in a Roth IRA you can withdraw contributons at anytime... even if you are less than 59 1/2. With a traditional IRA you can use a SEPP to access money before 59 1/2. Since you said 55 I suspect that you are talking about a 401k.

Also, is your $800/month union pension separate from the $800k? I suspect so.

 

[38Chevy454]

Welcome to the forum. I think you are on the right path, but as others said there is more info needed to make a better decision. $1M is more than many retirees have. But it all depends on your budget and all of your income sources. Pension is great to have, that is becoming less common; so be thankful for having it. SS is one of the traditional three legged stool legs. Then of course remaining is your retirement savings. Those three sources need to provide your income for your budget.

 

[braumeister]

You should start by carefully going through this set of questions:

Some Important Questions to Answer Before Asking - Can I Retire?

 

[Midpack]

Plugging your numbers and assumptions in here https://firecalc.com would be a good place to start. What you have, your pension, what you can save, how you're invested, what you expect to spend, how long you expect to live, etc. That will give you your odds of success based on past history, up to you to decide if you want to hedge more or less for the future.

 

[Bamaman]

Your "Old and worn out" may not hold out, as you're really not that old. You don't say what your construction specialty is and what union you're a member of.

You probably have the skills to do part time work that may not be so physically demanding as working on a union construction job. And you may have the skills to retrain a little to do a job like home inspections.

People everywhere are looking for skilled craftsmen to do jobs--big and small. I'm trying to find a bricklayer today that does small jobs--like rebuilding a neighbor's brick mailbox my grandson knocked over. Real estate agents are also looking for handymen to make relatively minor repairs on houses for resale.

It might be a good time for you to just slow down a bit.

 

[Out-to-Lunch]

Welcome to E-R.org!

 

[Fermion]

Your "Old and worn out" may not hold out, as you're really not that old. You don't say what your construction specialty is and what union you're a member of.

I feel for the guy. I turned 51 and the process of building this ONE house has just about worn me out. I can't imagine 32 years of this.

 

[Fishmasterdan]

Probably need a little more information. Is it just you or do you have a spouse/kids? If spouse, are they working or/and do they have SS coming (or qualify for half of your SS)?

More important, what is your spending. If you spend $30k a year and qualify for a heavy ACA subsidy, you may be just fine to retire now. If you spend 100k, probably not.

Thanks for responding.
The wife is 9 years older so 59. But she has mostly been a stay at home career. Worked a few years but was mostly a stay at home Mom. Kids are done with college and I'm done paying on that. I saved for them to not have much college debt.
Actual expenses right now are 1900$ on the mortgage and roughly 2k a month on bills and food.
I haven't really sat down and figured out exact costs yet. But after the house is paid 50k a year would be more than enough.

 

[Fishmasterdan]

+1 need more info... if your expenses are $40k a year then $1m is plenty when combined with SS but if your expenses are $100k a year then no way. (Ferminion beat me to the punch).

You say that you can't access retirement until you are 55... what types of retirement accounts do you have? traditional IRA? Roth IRA? 401k? others? If you have substantial money in a Roth IRA you can withdraw contributons at anytime... even if you are less than 59 1/2. With a traditional IRA you can use a SEPP to access money before 59 1/2. Since you said 55 I suspect that you are talking about a 401k.

Also, is your $800/month union pension separate from the $800k? I suspect so.

Good morning.
One account is a trust fund that is at 300k I believe I can access this early
One account is a pension plan. The is at 500k. I believe this one says 55 before your eligible.
The 800 month is a union based pension that I'm not eligible for until 60. Its is based on years of service but you take a large reduction in benefits if start to claim under 65

Lots of stuff to think about. I am leaning toward trying to find a financial advisor.

 

[Fishmasterdan]

Your "Old and worn out" may not hold out, as you're really not that old. You don't say what your construction specialty is and what union you're a member of.

You probably have the skills to do part time work that may not be so physically demanding as working on a union construction job. And you may have the skills to retrain a little to do a job like home inspections.

People everywhere are looking for skilled craftsmen to do jobs--big and small. I'm trying to find a bricklayer today that does small jobs--like rebuilding a neighbor's brick mailbox my grandson knocked over. Real estate agents are also looking for handymen to make relatively minor repairs on houses for resale.

It might be a good time for you to just slow down a bit.

Ya I hear ya. Just scary to leave current job.

I get asked about every 6 months to leave my current job and go to another employer. So ya not hurting in that area. But knee surgery, back surgerys, now hips are going. Just tired of hurting non stop. Permanent limp, numb hands. Just trying to hold out till house is paid. I do sit behind a desk alot these days but I not always. I am an ibew member.

 

[skyking1]

Welcome union brother, I am an IUOE member. They gave the good advice and links above.

 

[4legsgood]

I concur with others, that you could find good paying pick up work.

I've hired a few two person handyman teams, one experienced, and the other learning and doing the physical stuff. I'm in Washington state, greater Seattle area, and for instance my nextdoor.com web site always has posts for people looking for electricians etc.

It is scary to give up a regular wage job with benefits. Maybe you could talk to your current employer and say you just can't do the physical part of the job anymore - offer to go for reduced wages and/or part time work and still keep a regular pay check.

I think you'll feel better about retiring when your house is paid off - that helped me make the decision to retire.

 

[W2R]

Actual expenses right now are 1900$ on the mortgage and roughly 2k a month on bills and food.
I haven't really sat down and figured out exact costs yet. [...]

Hi, and welcome! It's terrific that you started thinking about this five years before you can access retirement.

My suggestion is for you to record every single dollar that you spend, and what it was spent for, starting today.

That will give you a much better handle on what you need in retirement. I did that too, during a few years before retirement and learned a lot about my own spending. While recording my spending, I came across a few surprises! Anyway, I felt like it really helped me a whole lot, and also gave me the confidence that I needed to "step off that cliff", so to speak, into retirement.

 

[Fermion]

Lots of stuff to think about. I am leaning toward trying to find a financial advisor.

Lots of stuff to think about but by coming here you have at least managed a start. A financial advisor may steer you into things that cost you a lot of the money and returns you will need to live on. Personally I am a big fan of learning how to do this stuff myself. A lot like building the house and hiring out a plumber, only to discover they connect the vent line to the wrong side of the p-trap (this happens more than I thought it could possibly). Don't let a financial advisor steer you into some front loaded fund that benefits HIS retirement a lot more than yours!

 

[Fishmasterdan]

Hi, and welcome! It's terrific that you started thinking about this five years before you can access retirement.

My suggestion is for you to record every single dollar that you spend, and what it was spent for, starting today.

That will give you a much better handle on what you need in retirement. I did that too, during a few years before retirement and learned a lot about my own spending. While recording my spending, I came across a few surprises! Anyway, I felt like it really helped me a whole lot, and also gave me the confidence that I needed to "step off that cliff", so to speak, into retirement.

You are 100% correct. But I am scared to actually know haha.. hot rods and race cars. Tough to give that stuff up.

 

[pb4uski]

..... I haven't really sat down and figured out exact costs yet. But after the house is paid 50k a year would be more than enough.

Well, there are really two issues here. First is whether you have enough to retire. Second is if you have sufficient penalty-free access to get you to 55 or 59-1/2.

For the first question, whether you have enough, you could back into what you could safely spend using FIRECalc using the Investigate tab.

You'll need to know what your SS numbers are and also input your pension and nestegg.

For your mortgage, easiest thing is to simply reduce your $800k nestegg by the amount of your mortgage (as if you paid your mortgage off... even though you are not planning to). A better but more complicated approach is to input your nestegg as $800k, then your $22,800 annual mortgage payments as off-chart spending starting in 2021 then offset by a $22,800 annual pension starting in the year that your mortgage ends.

I assumed that your $1,900/mo was just principal and interest... if the $1,900 includes property taxes and/or insurance then back those out and include them in your spending as those cost will continue after your mortgage is paid off.

 

[skyking1]

Regarding a financial advisor: They might help and might not. There is a bit of rolling the dice there.
On the other hand, if you just need to get some understanding of what you can do, the folks here can provide links and explanations galore.
The other angle is finding the right job and it is a worker's market out here. I would bet there is something out there that will lessen the beating you take on the job.

 

[MarieIG]

Welcome.

Don't rush to hire a financial planner. They take a large chunk of your money. You can learn a lot of this site, and the Bogleheads.

My hubby is retired Union. I insisted that he retire before me as his job was physically demanding, but he waited until he would not receive a reduction in his pension. (He also took a joint and survivor.)

In addition to your financial matters, I would suggest that you look at the physical aspects of your lifestyle, i.e. your diet and (gentle) exercise program, to see if there is anything you can do to improve yourself physically (as well as minimize the physical part of your job) now as opposed to waiting until you retire.

You are doing well in that your debt is under control, but there are a lot of moving parts.

 

[pb4uski]

....The 800 month is a union based pension that I'm not eligible for until 60. Its is based on years of service but you take a large reduction in benefits if start to claim under 65...

What happens with your pension if you stop working before you are 65 but delay starting to receive benefits until you are 65?

 

[Fishmasterdan]

All excellent advice. I had never thought of no advisor and especially that fact thier not to be trusted. Time to start educating myself.

 

[Fishmasterdan]

What happens with your pension if you stop working before you are 65 but delay starting to receive benefits until you are 65?

Nothing. From what I have been reading. Your pension is guaranteed and it's based on the dollar amount. If you stop working in the electrical field you can do with it what you want.
It reads you can withdraw all of it at 55 with a penalty, or take monthly payments there's tons of different options..
The money market account is basically if you leave the industry you can withdraw it all but pay taxes.

I don't know everything. I have read the rules several times but not sure best route to go. I was trying to set a dollar amount goal. Was thinking if i had 1m at 55 I'm out. But it seems pretty dang complicated at the first look so far.

 

[MarieIG]

Nothing. From what I have been reading. Your pension is guaranteed and it's based on the dollar amount. If you stop working in the electrical field you can do with it what you want.
It reads you can withdraw all of it at 55 with a penalty, or take monthly payments there's tons of different options..
The money market account is basically if you leave the industry you can withdraw it all but pay taxes.

I don't know everything. I have read the rules several times but not sure best route to go. I was trying to set a dollar amount goal. Was thinking if i had 1m at 55 I'm out. But it seems pretty dang complicated at the first look so far.

You have time to figure this out. A huge tax hit is a consideration. . . You may not want to withdraw, or you may have the option to do a direct roll-over into a low cost IRA.

 

[Walt34]

My suggestion is for you to record every single dollar that you spend, and what it was spent for, starting today.

What she said. It is revealing - more likely than not you'll discover a few holes in your monthly budget that money is leaking from faster than you think. And even if you don't want to know about them, it is better that you do know so you can make a conscious decision on whether to keep that spending in place, or just modify it some.